Cooperative Marketing Management of IFFCO

 

Dr. Sheeja Varkey¹*, Dr. G. R. Sahu²

¹Assistant Professor, ST. Thomas College, Bhilai

 

ABSTRACT:

When some people join hands to solve some common difficulties, they are said to be working in cooperation. It may be defined as that form of organization in which some people combine for some common economic purposes. Cooperative marketing are formed voluntarily. A cooperative market works on some fundamental principles. First, members join it of their own sweet will. Secondly, all the members are treated as equals. Thirdly, cooperative markets work according to democratic constitution. Four, they are meant to bring members closer to each other. For these reasons such societies are started in small localities so that all the members of a particular locality may know each other well. Lastly cooperation teaches economy.  Cooperative marketing helps the farmers in getting credit at a low rate of interest. Moreover, the members work very economically as they know that the gain of the society will be their own gain. 

              

 

INTRODUCTION:

Management includes elected officials as Chairperson and members of the Board of Directors. These persons are elected as per rules, provisions of the byelaws and Cooperative Societies Acts and Rules of the State.

 

Primary cooperatives are the birthplace of the cooperative leadership. Leadership is the most vital component of cooperative management. Its quality decides the nature and future of the cooperatives. It provides vision, initiative, motive, force and the needed dynamism. With strong, dedicated, selfless and promising leadership, the very concept of cooperatives gets strengthened, while with weak, casual, selfish leadership it is weakened.

 

Cooperative leadership is built through the process of election. It is an expression of the free will of the electorate, namely, the members of cooperativeness. Freedom of decision making to select their representatives for the management of the affairs of their organization is most important. Except the competence of an individual, no other consideration should be allowed to influence the choice.

 

This so elected leadership is interested in the policy making of the institution, cooperative organization and these policies are determined in the meeting of the Board of Directors. Mostly, there are 2 or 3 sub committees for implementation of the decisions. There are Working Committee and Administrative Committee. In these committees, 2 to 3 elected Directors and Government nominees are the members, Chief Executive of the Organization. 

 

The leadership is imposed from outside, more particularly at higher levels. In many cases, the persons are those who have no roots in the organization, any where that occupy leadership positions. They have neither the understanding nor sense of belonging to the cooperatives. The influence which politics exerts over the cooperatives has further degenerated the cooperative leadership. The old tribe of cooperative leadership has completely vanished. The present leadership is often charges for tis vested interests.

 

For this, government has put up certain restrictions for the terms of the office bearers of the board of Directors. For election, a person can’t be an office bearer of district level organization, state level organization or national level organization; and due to this, the government has limited the role of leadership, and greater opportunity is being given to officials, as the cooperative is playing very important role.

 

REVIEW OF LITERATURE: 

The cooperative movement was started in the year 1904 when the Cooperative societies Act was enacted. The main objective of the Act was to encourage thrift, self-help and cooperation among agriculturist, artisans and persons of limited means. The main purpose of the movement was to overcome the acute rural indebtedness and to free the farmers from the clutches of the money lenders.

 

The Cooperative Movement in the country is mostly rural based. The Government emphasizes on institutionalization of distribution of inputs has given sufficient impetus to the cooperative movement. The major thrust of the cooperatives in the agricultural sector is towards supporting agricultural production through a provision of inputs for increased production and post harvest facilities to protect the interests of the farming community.

 

A Cooperative Society is organized by the people having common economic needs are willing to associate to work jointly to meet those needs.

 

The Cooperative marketing environment of India keeps on changing therefore there is a need to create awareness among farmers through special promotional activities. It must be organized by manufacturing company according to need of farmer like fertilisers companies agronomists share their knowledge and experience in events like haats, field days, harvest festivals, farmers conferences, crop seminars, kisan melas, agro exhibitions, dealer training programmes, village adoption programmes, crop demonstrations, soil testing, fertiliser recommendation programmes and meeting at agro service centres. The author emphasised identifying promotional needs, up gradation of fertilizer sales point, focusing low fertilizer consumption area, intensive involvement of dealers in  promotional programme, strengthening soil testing laboratories, Promoting IPNS, adopting farming system approach and developing IT Infrastructure. Razzak et al. (2004) in their article outlined use the recommended fertilizer, in recommended dose and at recommended time essential for getting maximum advantages, determined difficulty faced by farmers in Pakistan in the procurement of fertilizer . The author suggested policy measures to enhance the productivity in the farm land through farmer’s education, price reduction, improved storage and transportation facilities, improved administrative facilities etc.

 

OBJECTIVE OF THE STUDY:

1.    To study the role of consumer cooperatives in the public distribution of Durg.

2.    To investigate the nature and working of cooperative in Durg.

3.    To identify the problem facing the consumer cooperatives operational, managerial and financial.

4.    To make recommendations based on the findings of the study.

 

HYPOTHESIS:

1.    Despite their existence over decades, the cooperatives n Durg district of Chhattisgarh state in comparison to other rich districts have not come up to the level of expectations in rendering services to the consumers.

2.    Orderly developed consumer cooperatives will be a potential source of strength to provide the necessary input to the farmers when needed.

 

METHODOLOGY:

The study is based on the empirical research which depends on secondary data and analysis, some surveys and observation. The secondary data is collected from review of past researches and other reports.

1.    Data related to agriculture and cooperative were obtained from the Government of Chhattisgarh Publication Division

2.    The interference based upon the results as yielded by primary and secondary data etc.

Number of Outlets

At national level during the year 2003-04, out of total 2,82,468 sale points, cooperating outlets were 63995 representing a meager 23% of the total number of outlets. Since 1990, the number of cooperative outlets including other institutional agencies were 80040 which has restricted upto 63995 as on 31.03.2004 and in the same period private sale centers have increased from 2,31,170 to 2,82,468 resulting in increased share of 77% of the total number of outlets. Out of total 2821 sale points running in Chhattisgarh, the number of Cooperative Outlets including other institutional agencies were 1624 (56.6% of the total) and in private sector, their number 1197 (42.4%) of the total. The district wise sale points are given in the table below.

 

 

 

Table- District wise Sales Outlets Running in Cooperative and Private Sectors in Chhattisgarh (2003-04)

	Name of the District	Coop erative	Agro	Private	Total
1.	Raipur	287	9	252	548
2.	Mahasamund	98	2	65	165
3.	Dhamtari	64	2	130	196
4.	Durg	197	7	218	422
5.	Rajnandgaon	161	3	52	216
6.	Kawardha	76	1	16	93
7.	Bilaspur	167	7	128	302
8.	Janjgir	131	15	93	239
9.	Korba	0	0	13	13
10.	Raigarh	114	5	72	191
11.	Jaspur Nagar	21	2	7	30
12.	Sarguja	94	0	105	199
13.	Korea	23	1	18	42
14.	Kanker	55	2	20	77
15.	Jagdalpur	79	1	8	88
16.	Dantewada	0	0	0	0
Total	Chhattisgarh	1567	57	1197	2821

 

Source – Fertilizer and Agriculture Statistics, Western Region (2003-04)

 

 

 

 

Distribution of Fertilizer in interior Areas

With the introduction of Block level delivery scheme and increasing competition between Fertilizer manufacturers and imposters, private outlets have effectively penetrated into interior areas. It, therefore, cannot be said any more that only cooperative outlets are functioning in interior and remote areas. Even in states like Assam and Manipur, the share of cooperative Fertilizer distribution is restricted between 11-25% only.

 

 

 

Fertilizer Distributors Share in Cooperative

The present share of cooperatives in Fertilizer distribution has gradually declined from 60% in 1977 to 20% in 2003-04. It is clear that cooperatives have not been able to keep pace with the increase in Fertilizer consumption. One of the main reasons for this declining share is the unsatisfactory recycling of agriculture credit, poor management of cooperative societies and lack of professional training to the key persons it is also a matter of regret that cooperatives are not playing the expected role particularly in backward states like Assam, Bihar, Orissa and Rajasthan.

 

Table-Fertilizers Consumption and Share of Cooperatives

Source-IFFCO Office, Durg

 

 

Table- All India Shares of Cooperatives in Distribution of Total Fertilizers 1990-91 to 2001-02

 

 

 

Fertilizer Statistics 2003-04 FAI P.-1-74

The state wise share of cooperatives in distribution of total fertilizers from 1990-91 and 1995-96 to 2001-02 has been given in percent basis. It is clear that the maximum percent used for the distribution of fertilizer is the Himachal Pradesh and the lowest percent is Andhra Pradesh. The data of State wise shares of cooperative are tabulated below : 

 

 

Table- State wise share of cooperatives in distribution of total fertilizers  From 1990-91 and 1995-96 to 2001-02

State	1990-91	1995-96	1996-97	1997-98	1998-99	99-2000	2001-01	2001-02
Andhra Pradesh	9.88	12.28	9.10	6.61	5.93	6.45	8.28	2.61
Assam	33.33	16.33	5.36	-	6.41	10.85	2.13	11.76
Bihar	21.98	1.53	11.83	8.36	9.50	11.42	14.74	15.41
Jharkhand	-	-	-	-	-	-	-	-
Goa	14.28	57.14	66.67	50.00	42.86	12.50	17.06	40.00
Gujarat	73.65	68.92	65.60	64.40	65.10	59.50	57.15	54.97
Haryana	27.12	28.87	32.33	28.71	27.77	26.52	26.66	23.37
Himachal Pradesh	100.0	96.97	100.00	100.00	97.44	89.74	88.73	97.50
Jammu and Kashmir	100.00	84.31	65.12	1.64	-	-	-	37.14
Karantaka	22.41	14.51	19.13	15.78	15.93	15.43	14.98	12.33
Kerala	39.18	38.92	-	38.81	42.54	36.79	43.88	29.94
Madhya Pradesh	25.75	84.62	77.29	68.66	65.82	68.54	65.89	57.12
Chhattisgarh	-	-	-	-	-	-	-	-
Maharashtra	40.59	35.30	42.14	33.67	34.68	38.97	38.01	11.90
Manipur	61.54	8.33	15.38	7.69	5.88	-	-	-
Meghalaya	66.67	100.00	100.00	100.00	100.00	80.00	77.72	75.00
Orissa	43.16	40.51	31.08	35.40	38.13	34.41	33.21	25.87
Punjab	30.14	39.27	40.31	44.06	32.58	34.79	67.29	34.04
Rajasthan	40.62	12.44	26.82	27.78	6.94	20.00	22.56	21.55
Tamil Nadu	31.26	26.62	25.16	35.10	25.45	21.92	22.12	19.02
Uttar Pradesh	35.64	39.54	51.97	26.80	31.08	23.68	61.04	63.68
Uttaranchal	-	-	-	-	-	-	-	-
West Bengal	29.10	14.27	19.42	23.26	23.01	20.34	21.84	19.95
UTs/Others	7.62	9.41	7.69	1.89	2.47	1.02	6.94	-
All India	31.65	32.24	35.99	30.91	29.02	27.65	36.17	35.00

Source- National Cooperative Development corporation New Delhi.

 

 

Role of Cooperative in Agricultural Development in Chhattisgarh

One of the most effective ways for promoting agricultural development is through the reorganization of agricultural produce markets. Farm output may be produced for domestic consumption, for example, vegetables, fruits, milk etc., or it may be produced for widespread distribution in internal market, for example, paddy, wheat, pulses, sugarcane etc. the term cooperative marketing includes a number of services namely

 

i)     Purchase of the produce from the farmer and its scale to the consumer

ii)   Processing of the produce including drying, milling or preserving

iii) Grading and packaging

iv)  Storage

v)   Transport

vi)  Capacity to deal in by products

 

The general objectives of cooperative marketing are :

i)            Securing best possible market price for the farm products. Joint sales decisions eliminate the competition amongst members and ensure them better prices through pooling together of their bargaining power.

ii)           Producing in the cost of marketing. Marketing costs include cost of transportation, storage and package etc., which are reduced under marketing cooperatives due to bulk selling. Lower the market cost, higher is the return secured by the farmers and vice-versa.

iii)         To act as a powerful check upon the monopolistic power employee by the private traders.

iv)         To help the farmers from the exploiting forces viz., middlemen, manipulation in weights and measures, unjust assessment of the quality of the crops etc.

v)           Protection of consumer’s interests by the removal of unnecessary wastage and reduction in the marketing costs.

 

The first Cooperative Marketing Society in India was set up in 1904 at Hubli. At the Government’s initiative, in plan after plan, marketing societies have improved their position, both quantitatively and qualitatively. The cooperative marketing structure in India is mostly two-thirds, except in states like Andhra Pradesh. The general structure consists of primary marketing societies at the village level and state Cooperative Marketing Federations at the state level. At the national level, we have the National Cooperative Marketing Federation.

 

The Apex Organization of the Agricultural Marketing Cooperatives is the National Agricultural Cooperative Marketing Federation of India Limited (NAFED). NAFED undertakes marketing of primary and processed agricultural commodities like oilseeds, cotton, pulses, tribal produce, fresh and processed vegetables and fruits, onion, potato, poultry and agricultural inputs etc. with its network of four regional offices and 32 branches located in the country. NAFED is a nodal agency designed by the Government of India for undertaking price support operations in agricultural commodities and also market intervention operation in such commodities. Under the guidance of NAFED, most of the state cooperative marketing federations have set up technical and promotional cells, which offer the services of refrigeration, engineering, oil and fruit processing experts, marketing specialists, cost accountants etc.

 

Role of Cooperative in Agricultural Development

In India, cooperative movement was originally aimed at to extend and develop facilities of rural credit. The Cooperative Societies Act 1904 provided for the organization of rural credit cooperatives by the cultivators-borrowers to tackle the problem of rural indebtness which was the main cause for their economic backwardness. These cooperatives were to provide credit to the cultivators at reasonable rate of interest.

 

The national leadership of Agricultural Credit Review Committee (ACRC) Report was presented for implementation at different levels-Primary Agricultural Cooperative Society (PACS), District Central Cooperative Bank (DCCB), State Cooperative Bank (SCB), Registrar of Cooperative Societies (RCS), state Secretaries In-charge of Cooperation, Different State and National Cooperative Federations and other concerned organizations NABARD and its Regional Offices, different cooperative Training Colleges in the country and concerned ministries and departments of govern of India.

 

One of the most important recommendations of the ACRC report was relating to the need for evolving Business Development Plants (BDP) for each and every Primary agricultural Cooperative Society in the country as a necessary measure to revitalize the cooperative structure from the grass-root upward. Training programme to sensitize the faculty members of different Cooperative Training Colleges located all over the country and through them sensitizing sufficient number of district Cooperative Credit Banks (DCCB) person have been initiated. It was expected that in the financial year 1991-92 each DCCB in the country would be able to work out business development plans for atleast one Primary Agriculture Cooperative Society in each development block located in the district. In the case of blocks where less than 30% arable area is under assured means of irrigation, the PACS chosen for evolving a BDP (Business Development Plan) may be one lying in the micro watershed project area under the National Watershed Development Project for raid fed areas (NWDPRA).

 

An essential component of the business development plans would be adequate deposit mobilization by the Primary Agriculture Cooperative Societies that would be able to attract an equivalent amount of institutional finance for the purpose of implanting the business development plan. It is expected that a business development plan of PACS would be implemented over a period of 3 to 4 years during which time the society would be expected to become commercially viable. It would be reasonable to expect that the entire operation of revitalizing approximately 70000 PACS in the country that needs revitalization would be able to implement the business development plans evolved with the help of their respective DCCCB personnel by the end of the decade.

 

An action programme, not extending over more than five years, should be drawn up for each PACS. All PACS that have not reached a loaning business of rupees One million should be taken up for specific attention. The programme of development for each PACS should deal with increasing loan business, enlarging its package of profitable noncredit activities, augmentation of resources (deposits) and reduction in over-dues.

 

Development of Cooperative in Chhattisgarh

Before the formation of new Chhattisgarh, the cooperative movement flourished in the different parts side by side with the country.

 

 

 

Prathmik Krishi Sakh Samity

The agricultural credit societies are working as Society Vrihtakar Samity and Krishi Sewa Samity. In 1960-61 the share capital of these societies was 309.46 lakh rupees which became 1618.50 lakh in 1970-71. The share capital became 473. 75 lakh. In 2003-04 their number became 7891 and the share capital became Rs. 205.25 Crores.

 

Cooperative Banks

There are seven cooperative banks functioning in Chhattsgarh State. Out of them Raigarh Central Cooperative Bank is directly controlled by Apex Bank, Raipur. There are 1334 Primary Agricultural Societies working in village level.              

 

Cooperatives in Extension and Sales Promotion

Today Cooperatives have a reach to almost 100 percent (99.5%) villages in India and have one-third share in distribution of Fertilizers. However, the extension education programmes of Fertilizer promotion are either organized by Fertilizer providing cooperative, i.e. IFFCO/KRIBHCO exclusively or in collaboration with these organizations. National Cooperative union of India (NCUI) have projected for extension of education but there is specific need for Fertilizer extension and sales promotion and sufficient use through PACS to fulfill the basic objectives of cooperative movement.

 

Fertilizer Extensions and Sales promotions by Cooperatives

Presently three types of cooperative educational programmes are conducted in the country :

1.   General Cooperative Education             Programme for agricultural cooperatives implemented by state cooperative unions.

2.   Sector Specific Cooperative Education Programmes covering industrial cooperatives, handloom, handicrafts, dairy, fisheries, women, urban credit consumer, housing, marketing cooperatives etc.

3.   Specific Cooperation Projects based on area development approach.

 

The State Cooperatives/Unions/Federations in various states organized 560 programmes/courses and farmers camps on agricultural development during the year 2003-04. These programmes were attended by 20907 farmers. Besides dairy development, horticultural development plant protection, vegetable development, course on Fertilizer development were also organized.

 

 

FINDINGS:

In a developing state like Chhattisgarh, the state has a necessary role to play promoting the cooperative movement so as to take it in its turn to play its part in supporting the programmes of development related to farm section as well as allied sectors also. Price support operations are prime face important as a part of agricultural and allied sector production strategy. If the farmers are assumed of a remunerative price for their produce, they will be motivated to increase production. If price support system is strengthen, cooperatives can gain desired momentum in creation of agro-based industries, processing units and other small industrial units on the basis of potential and resources available in rural area of the state

 

SUGGESTIONS:

1.    IFFCO is already covering almost the entire country with respect to sales.

2.    In cooperative political and administrative interference will be there but let it be restricted to educating cooperative staff only. Enough working autonomy should be given to village societies to decide and operate their day-to-day business.

3.    Let the village society directly deal with the Fertilizer manufacturers by sidetracking apex, district level and tehsil/block level cooperatives.

4.    Timely and committed supply of Fertilizers should be ensured by IFFCO and marketing channels.

 

CONCLUSIONS:

Fertilizer is key input for attaining food security of this country. Subsidy burden is being reduced or contained by implementing norms of international standard in NPS. The fertilizer industry requires to reduce production cost as well as marketing costs and to maintain high degree of efficiency for gaining competitive edge. The second green revolution has to come by true transfer of technology of farmer’s field, which not only increase productivity but it will also enable to maintain and improve soil health for sustainable agriculture. This task is very difficult due to second generation problems, namely, deficiency of secondary and micro nutrients declining response of fertilizer use, incidences on new pests, lowering down of ground water etc. come up in agriculture.

1.    IFFCO is already covering almost the entire country with respect to sales.

2.    IFFCO has been known for its promotional and educational programmes since its inception. Fertilizer use efficiency and balanced fertilization have been the planks of IFFCO’s promotional programme.

3.    IFFCO will continue to channelize its entire production through cooperatives only.

4.    Pricing is a very sensitive element of the market mix. Currently the Government of India has statutorily controlled the price of urea.

5.    The training and HRD functions for in-house and cooperative system will continue to be organized. Employees are retiring in a bulk incoming years. IFFCO will recruit, transfer and upgrade the skills of its employees in a phased manner.

6.    As a matter of policy, IFFCO has always allowed competitive terms and conditions to its marketers like state level Apex Cooperative Marketing Federations and the Societies.

7.    IFFCO spends quite a sizeable amount for the benefit of farmers and development of cooperatives. The amount must always be increased as both farmers and cooperatives have been soul of the Organizations.

 

ACKNOWLEDGEMENT:

Author thanks to Dr. G.D. Sao, Principal, Govt. VYT PG Autonomous College, Durg for his constant encouragement and appreciable help. and also, to Mr. Sudhir Saxena, Field Officer, IFFCO, Durg for his Generous help made available to me from time to time in extending literature facilities available with his department.

 

My present paper work is carried out from my thesis (A Study of Marketing Process and Implementation of Indian Farmers Fertilizer Cooperative Limited with Special Reference to Durg District of Chhattisgarh) which was done in session 2005. 

 

REFERENCE:

1.     A report on Agricultural Services and Promotional Activities, 2003-04 of IFFCO.

2.     Annual Report 2003-04 of National Cooperative Union of India.

3.     Bandey, Shabir Hassan. Application of Probability in Decision Making.

4.     Bhasin M.L. Indian Marketing. The Case Studies, 1990

5.     Chhabra, T.N. and Grover, S.K. Marketing Management, Dhanpat and Company, 2003.

6.     Fertilizer Statistics 2003-04. The Fertilizer Association of India, New Delhi.

7.     Goel, B.B. Management of Marketing Cooperative.

8.     Indian Cooperative Movement : A profile developed National Resource Center of National Cooperative Union of India.

9.     Pathak Vimal. Chhattisgarh

10.   Shekhar, S.A. Marketing Management, 1995.

11.   Dr. Sapna Sharma, Assistant Professor, Additional Head, Dept. of Commerce, ST. Thomas College, Bhilai.

12.   Dr. Rincey Bijo Abraham, Assistant Professor, Dept. of Commerce, ST. Thomas College, Bhilai.