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Cooperatives enable farmers to own and control, on a democratic basis, business enterprises for procuring their supplies and services (inputs), and marketing their products (outputs).
Agricultural marketing covers the services involved in moving an agricultural product from the farm to the consumer. These services involve the planning, organizing, directing and handling of agricultural produce in such a way as to satisfy farmers, intermediaries and consumers.
The goal of a marketing cooperative is to benefit members by helping them increase their margins, maintain control of their product to point of sale, and secure a reliable and consistent market for their goods. Marketing cooperatives may negotiate sales contracts, including prices and terms, with buyers.
op can provide loans to farmers, supply information pertinent to agricultural production, sell inputs necessary to agricultural production, bargain on behalf of its members, provide transportation services, or market agricultural products for its members.
Cooperative marketing gives an idea of collective efforts to achieve specific objectives to carry out marketing strategy for agricultural products. The cooperative marketing arises due to the prevalence of many defects in the private and open marketing system.
Congress passed the Capper-Volstead Act in 1922, giving farmers and ranchers the legal right to join together in cooperative associations.
Cooperatives are considered useful mechanisms to manage risks for members in agriculture. Through cooperatives, farmers could pool their limited resources together to improve agricultural output and this will enhance socio-economic activities in the rural areas (Ebonyi and Jimoh, 2002).
The Capper-Volstead Act allows farmers to lawfully unite or network to collectively market their products.
Individual farmers cannot consistently and reliably control the price they receive for their agricultural products or the price they pay for the inputs needed to produce those goods. Thus, farmers often form cooperatives so that they can enhance their economic market power.
What is cooperative marketing? Cooperative marketing happens when multiple companies work together to produce a larger, valuable offering to customers. It uses the expanded resources of each business to reach a larger audience or a new audience.