Meaning and Definition of a Marketing Co-operative Society

Meaning

A marketing co-operative society is a voluntary association of producers — most commonly farmers and small agricultural producers — formed for the purpose of selling their produce collectively at the best possible price, by eliminating unnecessary middlemen and sharing the costs and benefits of marketing among all the members.

Instead of each member rushing to the market on their own and accepting whatever price a trader offers, the members pool their produce and hand it over to the society. The society then grades, stores, transports, and sells the pooled produce in bulk in the wider market, and passes the sale proceeds back to the members in proportion to what each contributed, after deducting only the actual expenses and a small margin. In this way, the profit that would otherwise have gone to the middleman stays with the producers themselves.

Marketing co-operative societies mainly deal in agricultural produce — foodgrains, cotton, sugarcane, oilseeds, fruits, vegetables, milk, and similar farm products — though the same idea is also used by small artisans and craftsmen to market handmade goods.

A simple definition

A marketing co-operative society may be defined as an association of producers who join together voluntarily to market their produce jointly, on the principle of self-help and mutual help, so as to secure a fair price by reducing the role of middlemen and by carrying out marketing functions collectively.

The problem it solves

An individual small producer faces several disadvantages in the market:

• Weak bargaining power — a single farmer with a small quantity cannot negotiate on price.
• Distress selling — needing quick cash and unable to store perishable produce, the farmer sells immediately, often when prices are lowest just after harvest. …