Unit 1: Marketing Co-operatives
Marketing Co-operatives in India
Origin and Development of Marketing Co-operatives in India
Marketing co-operatives are organizations formed by farmers to market their agricultural produce collectively so that they get fair prices, avoid exploitation by middlemen, and reduce marketing costs.
Origin
- 1904: First Cooperative Societies Act introduced in India—mainly for credit co-operatives.
- 1912: Cooperative Societies Act expanded to include marketing and processing cooperatives.
- Post-Independence: Government promoted co-operatives to support farmers, especially small and marginal farmers.
- Five-Year Plans emphasized developing cooperative marketing networks for agricultural produce.
Development
- Formation of Primary Marketing Societies at village/taluka level.
- Development of State-Level Apex Societies for coordination.
- Introduction of regulated markets (mandis) to ensure transparent trade.
- Establishment of NAFED (National Agricultural Cooperative Marketing Federation of India) in 1958.
Need for Marketing Co-operatives
Farmers faced issues such as:
- Dependence on middlemen
- Price exploitation
- Lack of storage facilities
- Lack of market information
- Inability to bargain individually
Co-operatives solve this through collective marketing and bargaining power.
Structure of Co-operative Marketing System in India
Diagram – 3-Tier Cooperative Structure
Primary and Apex Co-operative Marketing Societies
A. Primary Co-operative Marketing Societies
These operate at the village/block level.
Constitution
- Minimum number of farmer-members
- Registered under the state cooperative societies act
- Democratic structure—one member, one vote
- Elected managing committee
Functions
- Collect agricultural produce from members
- Grading, sorting, and storing
- Sell produce in mandis or directly to buyers
- Provide inputs like seeds, fertilizers, and equipment
- Provide market information and guidance
- Generate better prices through collective bargaining
Real-life example: “Amul” began as a primary milk cooperative formed by farmers in Kaira district in Gujarat.
B. Apex Co-operative Marketing Societies
These operate at the state level and support primary marketing societies.
Constitution
- Federations of primary marketing cooperatives
- Registered at the state/national level
- Professional management + elected board
Functions
- Provide large-scale marketing linkages
- Export agricultural produce
- Offer warehousing, cold storage, transport
- Arrange finance through cooperative banks
- Provide training and technical support
- Negotiate contracts with big buyers and government agencies
Example:
- GUJCOMASOL (Gujarat State Cooperative Marketing Federation)
- HAFED (Haryana State Cooperative Supply and Marketing Federation)
Government Assistance to Co-operative Marketing
Government supports cooperatives by offering:
Financial Assistance
- Loans through NABARD
- Working capital financing
- Subsidies for storage, cold storage, and transport
Technical Assistance
- Training programs
- Market research support
- Modernization and digital marketing support
Policy Support
- Special schemes under Five-Year Plans
- Tax concessions
- Legal protection under the Cooperative Societies Act
Infrastructure Support
- Warehouse construction
- Cold storage facilities
- Transport & logistics development
NAFED – National Agricultural Cooperative Marketing Federation of India
Established: 1958
Headquarters: New Delhi
NAFED is the top national-level marketing cooperative responsible for agricultural marketing.
Objectives
- Promote cooperative marketing of agricultural produce
- Ensure fair prices to farmers
- Stabilize market prices
Functions of NAFED
- Procurement of pulses, oilseeds, and food grains under MSP
- Distribution of seeds, fertilizers, pesticides
- Export of agricultural commodities
- Market intervention operations
- Cold storage and warehouse development
- Price stabilization through buffer stock
- Promote contract farming and organic farming
Example: NAFED plays a major role in price stabilization of pulses during shortages.
Regulated Markets (Mandis)
Regulated markets were introduced to protect farmers from exploitation.
A regulated market is a marketplace where buying and selling are supervised by a market committee to ensure transparency, fairness, and standardization.
Objectives
- Eliminate middlemen
- Ensure fair and competitive prices
- Standard weights and measures
- Transparent auction procedures
- Reduce marketing costs
Features
- Market yards with proper infrastructure
- Storage and weighing facilities
- Auction platforms
- Price display boards
- Licenses for traders
- Market committees for governance
Example
-
APMC Mandis (Agricultural Produce Market Committees) in states like Maharashtra, Gujarat, and Karnataka.
Summary Table for Quick Revision
| Topic | Key Points |
|---|---|
| Origin | Cooperative Acts of 1904 & 1912; Govt. promotion post-independence |
| Primary Societies | Village level; collect produce; grading; storage; selling |
| Apex Societies | State level; export; finance; warehousing; coordination |
| Govt. Assistance | Finance, subsidies, training, policies |
| NAFED | National-level cooperative; MSP, exports, price stabilization |
| Regulated Markets | Transparent auctions; fair prices; APMC system |