Financial Banking Institutions in India

Co-operative marketing

For the economic development of rural India, co-operative marketing is a very important tool. Co-ordinator marketing gives an idea for collective efforts.

Thus, specific objectives can be carried out for agricultural products. Co-Operative marketing arises because of the presence of defects. It can be in private as well as the open marketing system.

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Co-operative Marketing

Co-operative Marketing

It was first termed in European countries. It is defined as an organization or a form of organization that consists of people voluntarily participating.

Along with the other human beings to promote the economic activities among the group. There are many benefits of co-operative marketing in India.

Many of these benefits can be associated more with farmers than other people. Below are the benefits listed in particular order.

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Benefits of the Co-operative Marketing

  • Direct contacts with final buyers
  • Increase in the bargaining strength
  • Credit provision
  • Storage opportunities
  • Market information
  • Transport
  • Standardizing and grading
  • Influencing the market prizes

Direct Contacts with Final Buyers

The final buyers are directly dealt with through this system. It removes the intermediaries between the farmers and the final buyers.

This eliminates the exploiters and thus ensuring the fair price to both the parties. Here the consumers and producers both are benefitted.

Increase in the Bargaining Strength

If the farmers are united and join each other to form a cooperative society than they will be able to increase their own bargaining strength. They will be able to set their own fair prices.

This will prevent the losses for the farmers. This is done because the farmers are marketing their products through a single agency.

Credit Provision

The co-operative marketing societies that are formed provides the credit required by the necessary farmers.

Thus, it will prevent the farmers from their selling their products straightway after harvesting it. So, this will ensure better returns for the farmers.

Storage Opportunities

Usually, the co-operative marketing systems have their own large facilities.

So, the farmers can store their harvest in these facilities and wait for the better prices.

Furthermore, this reduces the danger for the crops against the rains and thefts and rodents.

Market Information

The market data can be obtained by the system.

Thus, it can help the system understand the demand and supply of the market.

Furthermore, any related information for the market can be obtained on a regular basis. So, the producers can plan their activities based on this data.


The transportation facilities can be available at a cheaper and easier way. Thus, the cost and hard work to transport the products can be reduced.

Standardizing and grading

To standardize a product is easier for the agencies rather than an individual person.

Thus, the marketing systems can help the farmers by standardizing the products.

For this, they can seek help from government agencies. They can also evolve within themselves and create their own trading arrangements.

Influencing the Market Prizes  

Earlier the merchants and intermediaries used to determine the market prices of the products. While the farmers were mere spectators and helpless to determine the prices.

Thus, they had to accept whatever prices that were offered to them.

But this has been changed by the co-operative societies. They have changed the entire complexion of the pricing system.

Practice Questions on Co-operative Marketing

Q. In 1915, the first marketing co-operative was organized in the Bombay province in _____

A. Thane                 B. Hubli                   C. Ahmedabad                   D. Madgaon

Answer: B. Hubli

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