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Indian Economic Policy

Notes and important non-traditional crops are produced and sold in weekly markets and ‘hats’. Co-operative
marketing and distribution and banking are also linked with the regulated markets.
Co-Operative Marketing

Before l954, separate co-operative marketing societies were established as distinct from the co-operative
credit societies. Since 1954. however, multipurpose societies have been started with the purpose of
giving credit to the farmers and marketing their surplus produce.
The co-operative marketing society functions in the following manner : The members of the society
agree to sell their surplus produce to the society. As soon as they supply the produce to the society,
they get an advance to carry on with their agricultural operations. The society collects the produce of
all the members as also of the non-members of the village who are willing to sell their produce, often
process the produce and then disposes it of in the mandi. It does away with many of the middlemen.
If the current prices are not favourable and if it is anticipated that prices may rise in the future, the
society may decide to stock the commodity. As soon as the produce is sold, the society pays the
farmers the balance of the amount due to them. An important feature of the marketing society is that
it is managed by paid staff. Usually a society covers a number of villages so that it may be effective
and successful.
Advantages of Co-operative Marketing Societies
In some of the Western countries, co-operative marketing has been extremely successful. Denmark
has been well-known throughout the world for co-operative marketing of dairy products. Many
advantages are claimed for agricultural marketing on co-operatives basis. They are :
(a) The marketing society substitutes collective bargaining in place of individual bargaining. The
farmer by himself is weak but the marketing society is said to be strong.
(b) It advances loans to the farmers and enables them to wait for better prices. Besides, it lends to
them for their other needs. Thus, co-operative marketing societies can link credit, farming,
marketing and processing to the best advantage of the farmers.
(c) It can have its own storage and warehousing facilities, it can thus remove the damage to
agricultural produce through rats, ants, dampness etc.
(d) It can arrange to have quick and cheap transport and sometimes it can even have its own
transport.
(e) It can encourage the farmers to produce graded and standardised products and discourage
them from adulterating their produce.
(f) It can control the flow of supplies and thus influence the prices.
(g) It can eliminate many of the middlemen and thus remove their large-profit margins.
(h) Apart from selling the produce of the farmers it can supply them such essential goods as seeds,
fertilisers, implements etc. Thus the co-operative marketing society is probably the best method
to reorganise rural marketing and promote planned growth of our rural areas.
Development of Co-operative Marketing
There is great scope for the development of co-operative marketing societies. In the first place, there
is the necessity to co-ordinate better farming, finance and marketing. At present efforts are being
made to have one society which will perform all the three services for the farmers.
Secondly, the marketing societies increasingly undertake processing of agricultural goods. Several
agricultural goods can be more favourably marketed if they are processed before sale. Cotton can be
ginned and pressed; oilseeds can be crushed and oil may be sold; jute can be processed and baled;
and so on.
Thirdly, the co-operative marketing societies can attempt to sell agricultural goods to consumers
directly (wherever this is possible) and thus eliminate the middlemen and their commission.
Fourthly, the co-operative marketing societies should be made to grade their goods. The grading
facilities may be made available to them by the Government through the Agricultural Marketing

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