MARKETING, AGRICULTURAL PRODUCE AND MARKETING.

AND
COOPERATIVE MARKETING IN TRADITIONAL RURAL AREAS
By Zvi Galor
www.coopgalor.com
1990
1. Introduction - What is marketing?
There exist today a wide variety of concepts of marketing and its nature.
The very definitions of marketing have also undergone considerable
development in the second half of the 2nd century, which is reflected in
the literature mentioned below. Today we encounter several basic
concepts of marketing and its nature. The five main marketing concepts
are listed below [1]: "The production approach - being a managerial orientation assuming that
customers would prefer products which are both accessible and affordable.
The main managerial function would then be the improvement of
production efficiency and of the distribution system. .
The product approach - being a managerial orientation assuming that
customers would prefer products of the highest quality for a given price.
The firm should accordingly devote its main resources to improvement of
product quality...
The sales approach - being a managerial orientation assuming that
customers would (or would not) acquire the firm's products, in proportion
to the efforts made by the firm to generate an interest in the product. The
firm should accordingly locate potential customers and try to convince
them, sometimes aggressively, that its products are something they
cannot do without...
The marketing approach - being a managerial orientation maintaining
that the key to the attainment of the firms objectives consists in the
determination of the needs and aspirations of the target market, and in
tailoring the organization so as to cater to consumers desires in a better
and more efficient manner than competing firms.
The marketing-social approach - being a managerial orientation which calls
for focusing upon the diagnosis of the needs of the target market and their
fulfillment; in parallel, public welfare should be upheld in the long term."
These approaches outline the general framework of theoretical and
practical thinking about marketing.
Let us now review the various
definitions of marketing as put forward in various studies over the last 3
years, in order to trace the development of this subject.
The first definition, in a study dating back to 1952 [2], refers to marketing
as a production-dependent activity. The definition states marketing is
1

the means by which you dispose of the output of a farm, of factories,

mines, quarries, forests, fisheries, hunting, oil, as well as everything
imported."
The following is added by way of explanation: From the
sellers
viewpoint, marketing is the ability of the marketing system to
transfer everything produced from the producer to the consumer, (with
minimum hindrances for the highest possible return and wages. On the
other hand, from the consumers viewpoint, marketing is simply the ability
to transfer goods in which he is interested, in the form and the manner he
desires, and at the lowest price to him. By making a synthesis of these
two viewpoints, it should be clear to us that marketing is in fact a series
of foregone decisions, based on a suitable market survey, as to what are
the goods one should produce or import, and in what quantities.
In fact, these definitions teach us the basic concept of marketing. Inside
any marketing system, we find the producer on the one hand, and the
consumer on the other hand; and in between them we find the
mechanism which causes the products and
services to pass from the
producer's side on to the consumers side.
First definition of our review referred to marketing as a system assuming
that the center of gravity is with the producer and his point of view.
Another definition which also dates back
to the fifties clarifies the
following for us: "Production means the concentration of raw materials in
one place, while marketing means that this parcel of finished products is
sent into farther and farther, far-flung regions" [3]. Another definition of
the same period which stresses the passage from the producer to the
consumer and also the importance of product-ion says the following: [4]
"Marketing in general may be defined as the whole process by which real
marketable surplus, belonging to the producers, reaches the consumers."
In the sixties we find a shift in perspective and the center of gravity of the
marketing definitions in the literature on the subject. Researchers now
find that the stress falls somewhere in the middle - between the producer
and the consumer.
The stress is now made on that mechanism which
enables goods and services to pass on from the producer to the consumer.
Ottenson and others [5] explained that: "The firm is the bridge of decisionmaking between the market it series and the sources from which it buys.
The buyers market constitutes the main source of income, whereas the
selling market is the main absorber of the firm's outlays." We further find
that in that decade of the 6's it was attempted to extend and refine the
concept of marketing, in which the firm occupies a central position, and
the following definition [6] tries to present a marketing model which
describes price relations between different points in geographical space,
different points in the time dimension, as well as between different
alternatives based on the same raw material:
"Prices in different geographical locations within the same country will
differ by no more than the cost of transportation from one point to
another, within one given marketing area. Prices will differ precisely by the
cost of transportation from the point of production to the marketing
location. Prices at one point in time will differ from prices at another point
in time, precisely by the storage costs2

The price of one product will differ from the price of another product
manufactured from the same raw material, by
the difference in
processing costs."
This concept also fits in with the discussion concerning the marketing of
agricultural products and the role of
the cooperative in this set-up.
Indeed, a definition of marketing with preference to the agricultural
system again stresses the importance of this marketing system as a link
between producer and consumer [7]:
"The performance of business activities directed towards, and incidental
to, the flow of goods and services from producer to consumer or user."
During the 80's the center of gravity of marketing definitions shifted from
its former midway position between the producer and the consumer, to
the side of the consumer. The consumer and society are the main issues
nowadays, and the manner of satisfying their needs. Successful marketing
is that which accounts for the consumer and its environment, as this is
outlined by the following definition [8]:
"Consumer satisfaction with social responsibility has been regarded as the
center around which all marketing activities should revolve".
Again we find that as opposed to the past concept of marketing, which
stressed the sale of products, the approach nowadays lays emphasis on
the satisfaction of consumer needs.

Figure 1

2. Agricultural Marketing
Now that we know what marketing is, and how the various approaches
have developed in understanding this process, let us examine and learn

what agricultural marketing is. Let us try to find out, if what holds for
marketing in general also hold for agricultural marketing, and for
marketing in traditional rural areas in developing countries. It is fairly
clear that when we consider
a marketing method suitable for
a
traditional agricultural society, it will have to be adapted to the pattern of
the traditional society for which the said program is intended (9)
Traditional rural areas are distinguished by a subsistence economy. In such
villages the production unit is the family, which produces the food for its
own consumption, and for the payment of rent or tax, at the equivalent
monetary value. Surplus is offered for sale only after a particularly plentiful
cultivation season. The family unit considered as a production unit, is
quite small and such units operate separately.
This situation makes it
difficult to concentrate the produce for efficient marketing. In certain
areas the vast majority of the population is not at all used to thinking in
terms of commerce and barter trading. Another characteristic of these
areas lies in the fact that many of the traditional peasants would be
prepared to switch over to the cultivation of market crops, provided a price
system is set up which gives them an incentive (10).
The traditional peasant in developing countries sells his produce at the
time and for the price, which are the least advantageous for him. He sells
in order to pay his debts, but the cycle is repeated, and he becomes
involved in new debts. In developing countries, the peasants sell a
"forced" surplus. The peasant is forced to sell a sizeable part of his
produce, sometimes much more than he would have sold if he had had the
choice.
In fact, the surplus marketed in the developing countries is
determined as follows: If we work out the total produce of the peasant,
deduct from this the familys own consumption, plus payments he makes
by handing over produce, as well as the payment of various debts, usually
to money-lenders, we finally obtain the amount left to the peasant for
marketing (11).
Maynard and Beckman in their study [12] list the main functions of
agricultural marketing. These include purchasing, sales, transportation,
storage, sorting and grading, financing, added risk, and marketing
information. Purchase and sale involve change of ownership. A thing sold
is also bought, and anything bought is also sold. Transportation involves
the
transfer from a place of surplus to a place of shortage this is the
geographical dimension, while storage involves the transfer from a period
of surplus to a period of shortage - the time dimension.
Mathur in his study of 1971 further extends the stages involved in
agricultural marketing [13]. He argues that marketing starts at the
peasant's field and includes the following: collecting produce surplus from
individual peasants, transportation to a nearby depot, sorting and grading,
stocking up, processing, storage, packing, transportation to consumer
centers, contact between producer and consumer, and sale to the
consumer.

Most of the operations of the potential marketing require capital, and are
carried out at a high risk. The agricultural produce
is
usually
transported in bulk. Storage and transportation are very costly. The
produce is seasonal, whereas the demand for it continues all year round.
The traditional peasant is a small marketing unit.
Hence produce
collection is complicated and expensive. Agricultural marketing involves
losses, damage, and quality impairment during storage and transportation.
It is difficult for the traditional Peasant to undertake the marketing
operations, and therefore most of these operations are carried out by
middlemen.
The obstacles in traditional marketing are the following: The marketing
circle is long and archaic. The marketing circle: stages through which the
products pass. Starting with the producer, and on until they reach the
consumer. Within the framework of a traditional market, the stages which
the products go through are extremely long and weighed down by a
plethora of middlemen.
The infrastructure of transportation is archaic, the roads are bad or do not
exist at all, producers are a long way from the market, and consequently
transportation costs are very high. The fact that there is no planning in the
production and the irregularity in supplying the market, causes either a
surplus or a seasonal scarcity of products on the market Imported products
compete with the local production. Lack of sorting, processing and of
warehouses and lack of organization of producers and consumers.
Mathur goes on to classify the traditional markets. In the first place, we
have the primary market. This market is at the village level. The market
does not function every day, but at fixed intervals of a few days. The
market usually serves an area of about 1 km radius.
Next we have the secondary market. This already operates day by day,
and the action is wholesale. The market is regional, located in the central
area of the region, close to arterial roads, and it embraces a wider radius
of activities.
The final market is the one in which the produce passes directly to the
consumer, or goes on to be processed, or to be prepared for transportation
to markets abroad. An example is a market located close to a harbor.
One must distinguish between the traditional market and the market
which functions regularly every day and also includes warehouses and
wholesale services, of private or state owners hip (15).
The local traditional market is usually maintained in areas where
transportation is almost impossible for the
rural population with its
limited means. And the goods and services are intended for local
consumption. The local market is usually located in a market place. This
is a site in which the goods offered change from season to season. Such
local market form a network, in which one market is linked to another
5

through the passage of goods, services and people. The local market is a
meeting place of occasional sellers, who set up at random in sales shacks,
and come together at fixed time intervals at that fixed site. This is where
goods and services are distributed between the villagers, who act both as
buyers and sellers (16).
Who are the market operators? - In the first place, we have the itinerant
village trader. He is the main operator in the primary market. Sometimes
he himself is the producer. In other cases, he is the one who transports
goods to and from the secondary markets. He attends to the storage and
sees first hand reaction to of the agricultural produce. In some cases, he
hands out advances on account of the produce, and thus finances the
peasants. The second type of trader forms the link between the village
level and the secondary market level. He sells produce on a commission
basis, which he collects both from the seller as well as from the buyer. He
often finances the village level, and thus forces the peasants to sell
through him.
The third type of traders are those who represent more serious purchasing
outfits. They operate on a commission basis. They take care of cleaning
up the produce, as well as processing it weighing, packing and dispatch to
centers of transportation.' these people have a large amount of capital at
their disposal and finance their business independently [17].
One further factor worthy of mention is the price of marketing, which
includes all the subsidiary expenses of the marketing process.
These
expenses usually give rise to the difference between the consumer price
and what the producer gets paid. The reasons for this are many. Farms
are widely dispersed and production units are too small. There is no
uniformity in the quality of the produce. Transportation is difficult, and
marketing information is faulty.
There is insufficient capital for the
processing and storage, and financing costs are high. Other factors which
raise the cost of agricultural marketing are e many and "'ed levies, the
failure to sort the produce which detracts from the return to the grower,
inefficient sales procedures, neglecting to weigh the produce, and delayed
payment to the grower. There are too many middlemen, and no regulation
of the distribution among markets [18].
The mechanism of market prices: This is composed of the following: The
price of a product is determined by the supply and demand in the market.
The supply represents the quantity of products offered the same day on a
certain regional market. The demand represents the willingness to buy
the same products by the consumers, the same day on the market. The
price of the product on the market is not the price that the producer
receives. The following expenses will be deducted from the price paid by
the consumer:
(a) Transportation costs - distance, the means of transportation, kind
of product transferred and its processing are factors which determine the
cost of transportation.
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As the distance in transportation becomes shorter and the quantity for

transfer increases, so the cost of transportation, which comprises part of
the cost price of the product, diminishes considerably.
(b) Processing: presentation of the product must be enticing, in unit
packing, thus allowing direct consumption to the consumer.
(c) Sales: Cash sales are convenient to the producer. Credit sales are also
convenient as they increase the range of customers; however, the risk of
unpaid debts and the interest involved in credit terms, may lead to these
sales being written off as Bad Debts.
(d) Storage of the surpluses during times when demand is higher than
supply. The cost of storage is influenced by the following factors:
- Construction costs
- Maintenance and depreciation (labor & financing expenses)
- Volume of products produced, due consideration being taken of the
storage capacity.
- Special conditions for storage of various products (perishable
food, liquids, etc.).
- Average, burglary and losses.
(e) We can add also factors that have an impact on demand. The more
plentiful the products offered to the market, the harder it will be for the
consumer to take a decision, viz. in regard to:
- Advertising
- Presentation of the product
- Trademark.
(f) To sum up: the selling price of a product is determined by the law of
supply and demand. The price the producer receives is lower than the
selling price. The price of the product sold implies the evidence of all the
abovementioned factors, as well as the profit of the middlemen,
wholesalers and retailers.
3.

The Problems of Marketing

We deal here with the principles of marketing, and assume that what is
right for marketing in general also holds good for agricultural marketing.
In order to test this assumption, it is a good idea to examine an additional
component of the marketing system, which is the firm. The firm is the
decision-making bridge between the marketing it serves and the sources it
buys from. The firms expenses arise when it raises and receives capital,
labor, and other resources needed for production, while on the other hand
it provides a supply, for which it assumes there is a demand, in the market
it has chosen to serve [20].
The firms main problem is how to manage its resources in such manner
as
to maintain an optimum
relationship
between expenditure and
income. In other words, the firm must implement an efficient conversion

of resources so as to provide a supply answering an existing demand. The

firm should decide what to offer, and how to pick the suitable market in
which to offer its supply. The combination of all the variables of which the
firm decides to make use constitutes what we call "the marketing mix."
The firm management must find out and establish its optimum marketing
mix. The component parts are many: how much of our resources are we
going to invest in production; how much should be devote to product
development and future planning, and how much to present production;
how much should be spent on publicity; the advertising budget must be
divided between the different forms of media, between various products,
between areas of distribution, between methods of distribution, and
between potential customers.
The firm must decide what is going to be the final price of the product, the
amount of discounts granted to middlemen, what are going to be the sales
areas, and the type and number of intermediary agencies.
Other considerations facing the firm include the types of packaging, the
trade name, possibilities of obtaining credit, repair service for products
sold, product warranty, subjects which should figure in publicity, promotion
frequency, messages communicated, gadgets for salesmen, points of sale,
and gifts to customers.
To sum up, the firm's marketing task is to combine all the variables of the
marketing mix into an effective marketing program.
A good program
should take into account all the components for each and every product.
Every variable of the marketing mix is interchangeable with another. For
instance, if we can grant a reduction in the price of a product, perhaps we
can do with less promotion outlay. Similarly, the placement of more
salesmen could perhaps be an alternative to an increase in the sales
promotion budget.
The firm knows that all the marketing mix components are expensive, and
the main question is how much of each variable it is worthwhile to apply,
and how much money to spend on each of them. The firm faces the
traditional problem of choice, in view of financing limitations, out of an
almost infinite number of possible combinations of the variables.
On certain of these variables the firm has no control, though it does
exercise an influence on them, such as the market and the demand it
represents, who the competitors are within this market, what the various
sales channels in this market are, the firms employees, and the
technology, which affects the use of the firms products. There are also
such variables, which are entirely beyond the sphere of influence of the
firm, such as cyclical price fluctuations, and the change of seasons, the
general level of employment, the legal framework, the socialenvironmental
framework, and
the
structure
of
social
establishments. The people responsible for marketing within the firm may
find themselves in conflict with other factors within the system, such as
restrictions of advertising
budget, forbidden marketing channels, and
imposed minimum and maximum prices.
8

The firms main task is to put together the marketing mix of instruments
so as to achieve the maximum profit. The firm will discover that it has
achieved the maximum profit by applying the marginal profit approach. It
will put the optimum mix to the test, which should show that there is no
longer any improvement in net profit, neither upon a change in one of the
components of the mix, nor with a new combination at a higher rate of
expenditures.
In order to achieve such a high "level optimum, it is necessary to have a
clear estimate of the relationship between the cost and income for each of
the mixed variables, severally as well as jointly, with the other variables, in
order to gauge in what measure they serve the firm's purposes. One
needs to equalize the marginal net profit for every single one of the mixed
components, so that if the last dollar invested in publicity yields a further
marginal profit of $50, whereas the last dollar invested in personal sales
yields only $25, then if $1 is taken out of personal sales and invested in
publicity, it will certainly increase the net income of the firm.
We wish to reach a point at which the net return to the firm upon
variations in price, quality, product form and design, sales promotion,
distribution, and all the other components of the mix, will be the same.
The firm's marketing program should be not just balanced, it must be
balanced at the highest profitability level, and then we have the optimum
mix [21].
4. Constraints of Agricultural Marketing
Most small farmers do not possess suitable marketing means, and this is
the main handicap to increased production. Many of the farmers feel -that
they run -too high a risk of no-t being able to sell their produce at a fair
price. The traditional farmers need above all is to have faith in the
marketing system. It is possible to conclude, and we shall return to this
point further on, that one of the main ways of improving the farmers
productivity, does not consist merely in improving the inputs and the
production methods. It is important to secure a reliable market, a suitable
price, and a system by way of which the farmer can market his produce,
and at the same time receive the highest possible share of the price paid
by the consumer for that produce. [22]
When the farmer sets about marketing his produce, he faces many
constraints. Overcoming them will help us in restoring his self-confidence,
and will help him to develop. The first group of constraints is those due to
physical conditions. The primary condition is the general infrastructure,
which includes insufficient means of transportation, bad roads, and
undeveloped markets.
A further factor is the absence of agreed
standards. There are no agreed standard rates and measures, and in most
places the scales used are biased to the detriment of the farmer. The next
factor is the means of storage.
Insufficient storage space, and faulty
facilities give rise to losses. The lack of storage facilities prevents the
9

farmer from keeping over his produce until the season when its price rises,
resulting in loss of income.
Handling does not exist, or is in very
bad repair. Transport methods are outdated, and packing and containers
unsuitable. The points of unloading, loading and supply are unsuitable.
The supply inputs are unsatisfactory to the farmer. These are not provided
in the quantities requested, neither when they are needed, nor again are
they of the kinds and qualities required. The constraints of agricultural
marketing, which hamper the traditional farmer, also include components,
which are more specifically related to marketing.
Commercial efficiency is hardly accorded any attention, particularly by
government and semi-government institutions, and sometimes
also in
cooperative societies set up by the government. The farmer has a very
slim bargaining edge, and this fact is exploited by the private traders. The
traditional farmer has no financial means. Further constraints he faces are
related to the marketing price and the pricing policy. In many cases, the
price paid to the farmer leaves him no profit at all.
The input prices are too high in relation to the marketing prices. The price
fluctuations are excessive, and this in addition to high and unjustified
marketing levies as well as import taxes and exports taxes. The system of
payment and the manner of payment to the farmer is also significant usually the farmer receives payment too late, at too low a rate, not in
cash, and occasionally only part of the sum due.
This factor is bound up with the next factor, which is credit. Credit to
farmers is virtually non-existent.
When it does exist, it is insufficient.
When it is granted, the price for it is too high. Marketing information is an
important factor, which in most cases is not at the farmer's disposal.
Information concerning prices, markets and other data, is faulty and
deficient.
Information concerning supply and demand in markets at
various places is almost non-existent, which prevents the farmer from
rationally regulating the supply of his produce.
The government agrarian policy affects the farmer in a major way. Many
governments have a general policy of food imports, or received food
products through foreign aid, which reach that country at prices far below
the prices required by the farmer in return for his produce. Unrealistic
exchange rate policy results in unprofitable exports, and gives rise to
cheap imports, which compete with the local producer. Many governments
do not carry out a real agrarian reform policy, which could help out the
farmers. The small farmer finds himself in a vicious circle. Companies
and marketing organizations have no economic interest in providing
marketing services to a far ranging and non-uniform farmer population,
scattered in remote and hard to reach places. Without such services, the
small farmers will not take on the risk of stepping up production beyond
their proper consumption.
5.

Cooperative Marketing

10

A marketing cooperative is set up in order to market and sell the surplus

produce of its members, being such a surplus, as they cannot consume
themselves. Marketing cooperatives generally sell agricultural produce,
but there are also those, which sell fish produce or handicrafts [23].
There are also
other definitions of cooperative marketing. Margaret
Digby defines a marketing cooperative as a system in which a group of
farmers join together in order to carry out part or all of the processes
involved in bringing the produce from the producer to the consumer. The
Bank of India defines a marketing cooperative as a society of farmers,
organized for the purpose of helping the members to market their
produce, so as to obtain higher profits than is possible by way of private
marketing [24].
The reasons for the establishment of such cooperatives are:
When there is a surplus in production over the consumption.
In order to save expenses for middlemen who benefit from the producer in
various fields, such as: bad weight, very low prices and loans at high rates
of interest.
When the system in force is archaic, it does not meet the requirements at
all, involves many middlemen or compensates very weakly for the
producer's work. Thus, a marketing cooperative must offer its members a
more efficient service than that in force, so that its members obtain a
greater profit from their work.
When establishing a marketing cooperative, it is indispensable to study
various aspects and problems:
What products shall we produce and sell on the market? Whet, experience
in regard to production? What species are marketable every season,
quantities and qualities that are preferred? What are the perishable items
that can be stored and under what conditions? What is the present
marketing system?
What system of payment is practiced for the
producers? Is any advance payments allowed just after the crop, or will
payments be effected only after the sale of the products? What is the best
marketing circle of the production? Does the product undergo a process
for its improvement? To have a sound knowledge of the medium of the
improvement.
Financing Problems: One producer expects to get his money upon
immediate sale of his products. Another producer wishes to receive a
down payment. Whereas, the cooperative is paid only after the sale of its
products. Sometimes, it is even necessary to store the crop for many
months before it can be sold. It is also possible that the output will be sold
at a distant market, which entails transportation costs-, or, sometimes, the
retailer will delay payment of his bill. All these factors produce a clash of
interests
between the needs of the producer and the existing
possibilities of the cooperative. Therefore, working capital is indispensable

11

to meet the requirements and to comply, at least partially, with the

interests of all.
Possibilities: An important working capital to farmers. Financing on
short-terms by a bank. Financing by a cooperative bank. Establishment of
a financing enterprise where the members of the cooperative are also the
shareholders. Such a financing enterprise will be established by the
marketing cooperative. It is the most advantageous and cooperative
solution. Cheap credit is allocated to the farmer provided he sells all his
output through the cooperative.
When the cooperative has determined the exact quantities, which it will be
able to sell, it is in its own interest to make agreements for sates in
advance. A sound sale crowns the producer's work. This is the reason
why the establishment of a cooperative is a necessity to the farmer. The
cooperative prevents unhealthy competition between its members, sorts
out the products conscientiously and directs the supply towards the
demand.
The cooperative has to cope with all the abovementioned problems when
selling its production. Other problems also arise, such as: A small supply
of different products; thereby small quantities for sate. The production of
vegetables and poultry must be sold several times each week. As the
agricultural cooperatives are far away from the market, transportation
costs go up. Bad roads and high transportation costs further increase the
cost price of the product. [25]
The marketing cooperative was created in order -to push up the selling
price as much as possible and to increase the return to the members -For
their output [26]. The cooperative offers its members an improved
bargaining position in regard to services such as transportation, and is
capable of affecting a better sale.
The better the service the more
members will be keen to join the cooperative. More members in the
cooperative will enable a reduction in the price for various services, as well
as in running costs. The cooperative makes it possible to maintain
services such as storage, bulk transport, extended credit, markets survey,
cooperative education, which the single farmer is generally unable to
achieve [27].
Marketing cooperatives in developing countries encounter many
difficulties.
G. Hyden describes some of them [28].
Many of the
marketing cooperative in Tanzania was set up by local politicians who were
influential at the national level. The main argument was that cooperatives
would minimize exploitation. The cooperatives were set up without any
feasibility study or field survey, and as a result they fell into considerable
monetary dependence on external organizations, such as marketing
organizations or financial institutions. Since the cooperatives were set up
to suit external decrees (the politicians), the marketing cooperatives'
fields of activity neither accorded nor covered, either functionally or
regionally, the needs of the productive units at work in the rural areas.
12

The cooperatives were troubled by grave management problems, and in

parallel by lack of skilled manpower.
In Bangladesh a very extended system of agricultural cooperatives
was organized [29]. The marketing cooperatives, which are of the third
level, are concerned with four main activities - the marketing of
agricultural produce of all kinds, the
marketing of semi-industrial
products (handicrafts), marketing of fisheries produce, and marketing of
dairy products.
Agricultural villages form the base of this structure, whereby every fifteen
villagers make up a secondary level unit. All secondary level cooperatives
are organized into a third level cooperative. Though these cooperatives
have made significant achievements, they are also faced with weighty
problems. The first problem is credit. The farmer would like to sell his
produce for cash, and this requires the cooperative to have command of
considerable liquid resources, for which it must obviously pay dearly. One
of the solutions to this problem is, of course, to sell the farmers' produce
on a commission basis [30]. But as is the case in India, so in Bangladesh,
the cardinal problem of the marketing cooperative is the lack of any link
between marketing and credit [31]. Further problems in Bangladesh are
the great distances between the cooperative branches and the farmers in
the villages. The management of those cooperatives is not professional,
and many of the societies are in fact reduced to waiting for things to
happen [32].
At the other end of the scale we have examples of marketing cooperatives,
which have been successful. In Jordan, the olive marketing cooperatives
have changed the farmers methods of cultivation.
The farmer was
obliged to pick the olives carefully and in a selective manner, so as not to
harm them. The olives were transported directly to the oil press, without
interim storage. The farmer could step up production, but he was required
to supply better quality and cleaner produce. The produce was graded
into various quality levels, and this grading also increased the demand on
the part of the consumers.
The cooperative
also
succeeded in
influencing prices.
The cooperative led to an increase of the return to
the farmer by 1% over the market price, with customers being on the look
out for the cooperatives olive oil, as they were confident of its quality (33).
The carob marketing societies in Cyprus have also been successful, and
so have other marketing societies. Among the reasons for this success
we may note the fact that the farmer was more exploited in the past. The
marketing cooperative, on account of its size advantage, has attained
lower marketing costs than the private traders, on top of the high level of
management [34].
Another example is the agricultural marketing system in Algeria. This
system, which had been influenced by the socialist dogmas, which placed
the State above all. Is an example of severe failure in everything that

13

concerns marketing? The system has tailed in all that concerns transfer of
information, packing, transport and storage [35].
6. Models of Marketing Cooperatives
Marketing is the process that an agricultural product goes through on its
way from the producer to the consumer.
Traditional marketing involves several intermediary stages within this
process. The result is, of course, that the consumer pays an exorbitant
price and the producer receives a very low price for his production.
Naturally, it is in the interests of both producer and consumer that the
number of steps in the marketing process be reduced as much as possible.
The result: the producer will earn more and the consumer will pay less.
The first form of marketing is the traditional marketing circle I he peasant
sells his production at a local market which is held in his village every 5 or
6 days - this is the first stage. The intermediary who buys this production
transports it. Usually on overloaded small open trucks covered with a
tarpaulin, to a regional market. Another intermediary will buy these goods
and transport them to an urban market. The production will then be sold
and distributed at the neighborhood markets where the retailers will come
to get their supplies for sale to the consumers. This way agricultural
produce has undergone too many stages from producer to consumer. All
intermediaries have benefited -From this process, but not the producer
nor the consumer.
The solution to this state of affairs: a marketing cooperative owned by the
producers. This cooperative's aims are to reduce to a minimum the
number of marketing stages between producer and consumer. In Israel,
the Tnuva cooperative is a marketing cooperative belonging to all
moshavim and kibbutzim, and today has the fourth largest turnover
among Israeli enterprises. Tnuva has organized a national network, which
takes upon itself the collection, transportation, storage, processing and
sale of approximately 75% of agricultural output earmarked for the local
market in Israel.
The setting up of Tnuva has reduced the number of
steps in the marketing circle, but not enough. Agricultural produce leaves
the farm, passes through "Tnuva" and is then sold in the local market and
in various small shops.
Another alternative reduces the number of steps even more.
This
alternative involves direct contact between the
marketing cooperative
owned by the farmers and the consumer cooperative owned by the
consumers. Thus, the sale of agricultural products takes place from one
cooperative to another, and in principle, the profitability for the producer
increases while the purchase price for the consumer decreases. This
situation, though far removed from the traditional marketing circle, does
not go far enough.
It is still necessary to try to eliminate superfluous
steps in the marketing circle. Two solutions have been found:
The first consists of consumer sale centers, belonging to the marketing
cooperative, an example of which is Tnuva in Israel. These sale centers
14

link producers directly to consumers.

The second solution consists in
supply centers for agricultural produce, which are owned by the consumer
cooperatives, the latter belonging to the consumers. In this example the
consumers have organized themselves in order to acquire their consumer
goods directly from the producers.
The last marketing method, which we shall discuss, concerns the
organizations which belong to the farmers and the government and which
deal with the export of agricultural products [36].
The last stage in our model is the stage at which selling takes place
directly from the producer to the consumer. This is the preferable stage
because it produces the best results of all, both as far as the producer is
concerned, as well as for the consumer.
An example of this is direct
selling outlets, which have been set up by moshavim and kibbutzim at
roadsides all over the country, which sell their produce directly to the
public. This solution is beset with problems and is not always possible of
implementation - but this is the solution we strive for.
Figure 2.

15

7. A Marketing Cooperative in Israel - The Tnuva Case Study

16

Agricultural marketing cooperatives throughout the world are mostly

concerned with the marketing of agricultural produce of individual
producers who run their farms on their own. These farmers cooperate
mostly for the sake of marketing their produce. Tnuva, the biggest
marketing cooperative in Israel, is a cooperative of the second degree,
which markets the agricultural produce of its members, which are the
primary cooperatives [37].
Tnuva was founded in 1926, when
the
agricultural produce marketing division was detached
from Hamashbir
Hamerkazi. Hamashbir Hamerkazi served as the central cooperative for
the supply of basic provisions, and belonged, as it still does today, to the
moshavim and to the kibbutzim.
It must be stressed that Tnuva was
founded, like other marketing cooperatives, from below, and not by decree
of government or other authorities, from above. Membership in Tnuva was
and remains to this day open to any Moshav and kibbutz, or to any other
agricultural cooperative in Israel. The member joining is not required to
invest money in buying a share, but has to fulfill other obligations. A
Tnuva member is required to market all his agricultural produce through
the cooperative, without exception, for the following two reasons: In order
to prevent competition with other Tnuva members, and in order to tighten
the link between credit and marketing [38].
Tnuva members participate in the cooperative central executive councils,
sending one, two or three representatives to the cooperative general
assembly. The number of representatives is determined according to the
farmer membership in each primary cooperative (Moshav or Kibbutz) and
is independent of the monetary production volume, or the quantity of
produce marketed.
There were two important operational guidelines in Tnuva.
As already
mentioned, all the output of Tnuva members must be marketed through
the cooperative.
The member settlement must pay Tnuva a fixed
commission, which may occasionally be quite high, compared to other
marketing networks [39].
This commission is deducted as a certain
percentage of the marketed produce. Tnuva in fact operates as a nonprofit organization. The entire marketing return is passed on to the farmer,
less the commission, which is calculated for each type of produce
separately, in order to cover the direct expenses and the cooperative
financing expenses. Since its founding to this very day, Tnuva policy has
been directed at two main goals.
The first was to sell all agricultural
produce of the cooperative members. The second was to safeguard the
consumers interests.
The first goal is attained when the cooperative sells the produce
transferred to it. Tnuva has always endeavored, as a general policy, to
obtain the maximum return for the produce of the farmer member [40].
In addition to the abovementioned commission, Tnuva further deducted a
very low commission, usually much less than 1%, from each sale affected.
Tnuva named this deduction, "member's contribution towards the
purchase of Tnuva shares" [41]. The money thus collected was intended

17

for investment in the cooperative. We have here two Phenomena

investment in the cooperative. We have here two significant phenomena:
- Tnuva has accumulated a property (equity) which was financed by a
percentage it deducted from the sates of each member, but was actually
totally anonymous, and the member had no way of knowing, or perhaps
had no desire to be able to know whom those shares belonged to. The
member did not know, and could not know the worth of those shares for
which he had paid. The shares conferred on him no rights whatever, and
in fact after many years an enormous equity was amassed at Tnuva, which
was not linked to the member in any form whatever, except perhaps in the
abstract.
- In spite of the fact that it is the primary cooperatives that are the Tnuva
members, not the individual people, the above monies are deducted from
the individual. Tnuva forms a direct link with the member of the primary
cooperative, not with the primary cooperative as a unit.
The farmer
member became acquainted with Tnuva directly in everything regarding
the sates organization, the marketing, prices, and deductions, but so far as
the democratic system of the second-degree cooperative was concerned,
he was quite definitely out of touch. Representatives at the Tnuva
institutions were usually delegated at the executive level of the
cooperative to which he belonged. The individual member had very little
say in this in practical terms.
The second interest mentioned - safeguarding the rights of the consumers
was a principle, which was to guide Tnuvas business activity throughout
its existence. Tnuva attempted to minimize the marketing stages, and
bring the producer closer to the consumer. This was evident during the
30's and 40s in the establishment of dozens of retail sales branches of
Tnuva throughout the country, in the cities and townships [42], as well as
during the 80's, when the largest supermarket network in Israel was
founded. Tnuva deals with the various aspects agricultural marketing,
such as the processing of marketing produce, sorting and grading, quality
control and packaging
[43].
One of the main problems with which Tnuva is confronted is the price
problem. Tnuva sells its produce at market prices, particularly as regards
fruits and vegetables, as well as any other product not under government
control. On the other hand, the size of the cooperative (Tnuva is the
fourth largest company in Israel) enables it also to regulate the prices
of agricultural produce and thus to be of service to the consumers as well
[44]. Tnuva's price policy, and the fact that Tnuva is a cooperative, has
generally helped to reduce the gap between the price received by the
producer and the price paid by the consumer. The argument in Israel in
the past was that this gap is relatively small, on account of the marketing
being done by cooperative. We may perhaps add that Israel's limited
geographical extent, in consequence of which transportation distances are
short, certainly also contributes in this respect. Verlinski lists a number of
18

measures by which the gap may be reduced [45], such as maintaining a

higher quality, grading and packaging, maximum efficiency in wholesale
transportation, as well as suitable retail packages, and centralized retail
marketing, which enables increased turnover and the reduction of costs as
well as improved service.
How can we in practice estimate the price of a product from the producer
up to the consumer? This path is quite long and has been described as
follows [46]:
Rice passes the farmer's gates on its way out. The dispatched rice has not
yet been threshed and cleaned up. To the price of the rice at the farm
gate we must add the cost of transport to the village collection depot, as
well as additional expenses such as sacks, etc. This gives us the price of
the rice at the village collection depot.
To this price we must add the
transport costs to the rice station, the cost of weight toss due to the drying
of the rice, the storage cost which depends on how long is it going to be
stored, material losses of waste and damage, general expenses of the
rural station, as well as the profit
made by the people who run this
station.
Rice transported to the rice station for threshing will undergo a
price increase by the costs of threshing, storage, additional drying,
transport to the wholesaler, packing costs, general expenses and the profit
of the threshing station. This is the price of the rice when it is passed on
the wholesaler. To this price we must add the average storage costs at the
wholesaler, waste and material losses, cost of transport to the retailer,
general expenses of the wholesaler and his profit. The retailer will add to
this price his general expenses as well as the profit he hopes to receive
and thus we finally reach the consumer price. This chapter concerning
Tnuva may be concluded with a quotation from Nahum Verlinski, one of
the first directors of Tnuva, who wrote in the 6's [47]:
The marketing of agricultural produce is the final stage of the producer's
work and is the factor, which dictates his activities throughout the year.
The farmers success or failure in marketing his produce decides the
success of all his work. Marketing is thus a matter of primary importance
to the farmers, and it is therefore not surprising therefore that all over the
world farmers have tried for years to gain control of a function so vital to
their existence, by organizing themselves into cooperatives to direct and
expand the sale of their produce.
Without the benefits of co-operative marketing, the farmers remain
dependent on commercial distributors, who are in a position to dictate
conditions.
Cooperative marketing also benefits the consumers, by
imposing responsibility on the producers for supplying their produce,
helping them to handle their produce efficiently and regulating its flow to
different parts of the country.

19

Another important aim of cooperative marketing is to promote the longterm interests of its members. One of the most important factors in this is
to relate prices to quality.
Israel farmers have realized the value of cooperative marketing years ago
and their degree of organization is high. Cooperative marketing covers
80% of local sales and an even higher proportion of agricultural exports.
The young states of Asia and Africa are based very largely on agriculture,
and cooperative marketing of their produce is therefore important to make
them independent of commercial interests, and to assist their
development in every aspect."
8. The Production, Marketing and Export Boards
One of the most important marketing institutions, and one which exists in
the vast majority of the world's countries, are the production and
marketing boards. This
is a central marketing organization serving a
specific industry (a specific product), which is intended to achieve a higher
efficiency and orderly marketing. The board is defined as an essential
organization, influenced and directed by the producers, set up by the
authorities, with the purpose of intervening in the various stages of
marketing [48].
Most production boards in developing countries are involved with the
producers' interests. The first boards, which were set up towards the end
of the 20's, sprung up as a result of the farmers struggle to increase their
own bargaining power and that of the cooperatives representing them, in
the confrontation with competitive intermediary outfits.
The overall trend was one of technological advance on the part of the
small farmers, who consequently reached a state of production surplus,
and thus became more than ever dependent on the various intermediary
outfits. The farmers set up marketing cooperatives in order to protect
their interests. Those cooperatives were successful, and thus contributed
to the stabilization of marketing conditions. This situation was beneficial
also for farmers who were unwilling to join the cooperatives.
The
preservation of members' loyalty became a major problem of marketing
cooperatives. The cooperatives accordingly turned to the government,
requesting that it form production and marketing boards vested with the
power of enforcement [49].
The marketing boards have a monopoly on the marketing of a product or a
number of products. The board buys goods from the farmers through
authorized agents at an agreed price, at official stations, and carries out
the grading.
The board organizes the necessary transportation. A
monopolistic
board may
undertake a variety of functions including
overseas publicity, research of new strains, the
improvement
of
cultivation methods and transportation techniques, etc.
The non-

20

existence of competitors reduces marketing risks, reduces prices as well,

and indirectly also reduces credit prices.
Storage enables a better correspondence to be obtained between supply
and demand, and it is also always possible to deal with surplus produce. A
monopolistic Board can divide the total supply between different markets
so as to secure a higher mean price than could be obtained by fixing one
standard price for all markets. Moreover, the ability to pay the farmer an
average price over a long time period makes it possible to restrain
fluctuations in the farmers' income, and to exploit efficiently resources in
the production process. The board has a better access to marketing
information and consumer tendencies [50].
For example, in New Zealand, oranges are all marketed through production
and marketing boards. The function of such boards is to acquire the entire
local citrus crop and fix a price for 96 it. The board according to grading
of the marketed fruit fixes the prices. 14 days after the fruit is received,
the board must inform the grower of its grading, and have the price to be
paid. Payments to the grower are made on a monthly basis. The board
expenses are covered by deducting a certain percentage from the value of
the entire quantity marketed by each producer [51].
Production boards in developing countries are government oriented. Most
of them have been initiated by the government and are ruled by it. These
are boards, which act as tax collecting organizations, or as foreign
currency controllers, and do very little in the way of marketing [52]. In
Senegal, for example, the peanut marketing cooperative was practically a
state monopoly for marketing of agricultural produce. These were set up
in such a way as to ensure political control, and in parallel to excise as
much as possible from the farmers' income. The total income from peanut
exports from Senegal was divided into three parts, which were the return
to the producer, various deductions and marketing expenses, and the
upshot was that the producer did not get the maximum return [53].
It must be stressed that monopolistic production boards in developing
countries, which were intended to be of benefit to the producers as well as
to the state, have in fact inflicted severe damage on the national economy
of their respective countries. We know of great many examples, and one
of the famous ones comes from Ghana, one of the largest coffee and
cocoa producers in the world. Ghana has suffered from a distorted policy
in regard to the production and marketing councils. A sizeable part of the
annual coffee and cocoa produce (some say as much as one-third) was
smuggled into the neighboring countries and exported from them. The
result was a decrease in foreign currency income to Ghana, and an
increase in W this income to the neighboring states. In conversations with
people from Ghana, one hears it argued that the farmers are in fact to
blame for this. None would entertain the notion, at least not officially, that
perhaps the government policy is to
blame, in that it enforced an
unrealistic exchange rate, relatively low prices, delayed payments, and the
result was very low profitability to the farmer. Such policy leaves no

21

choice for the farmer, but to smuggle his produce somewhere else. Where
he can obtain for it the highest return.
In other developing countries we encounter an inefficient internal
marketing system, inadequate transportation, produce collection, sorting
and packing and no immediate payment to the farmer, all leading up to
the farmer eventually selling his 99 produce to private middlemen, instead
of to the government marketing organizations. The farmer manages to
get his income. I| but the entire system of guided agricultural credit is
damaged, because it is unable to collect cultivation credits which were
extended to the farmers.
The researchers Izraeli and others suggested models of the development
of production and marketing boards [54]. The model presents a system of
marketing institutions, which starts with the situation in which we find
independent producers, who market their produce on their own and make
their own decisions. Each of them has the authority to decide by himself
and for himself. So far as he is concerned, his authority is quite extensive,
his surroundings, however, he has very little authority. The alternatives
are limited because his resources are limited, and he is subject to both
horizontal and vertical competition. Next we pass to a situation in which a
growing number of farmers cooperate in order to increase their power
relative to non-member producers. A framework of formal relationship is
set up to that end between the members, and a cooperative comes thus
into being. Each of the producers gives up a part of his autonomy, and
areas of joint operation are formed, whereby it is agreed that in these
areas the general decision must overrule the decisions of the individuals.
In this way the struggle of producers with one another is replaced by the
struggle of producers of one sector with other sectors.
Further formation of establishments amongst the producers, including
eventually other sectors, gives rise to new organizations, in which the
producers cooperate with the government, with the various intermediary
outfits, with the cultivation specialists, and also with representatives of the
consumers. Statutory recognition provides the impetus for the formation
of the marketing boards. These belong at first to one productive sector.
The process goes on, however, and gives rise to inter-sectorial production
and marketing councils. When these councils are formed, people are still
worried about the possibility that weak sectors, such as the consumers, or
society at large, are going to get hurt. In the final stage, production
councils are established which have a social interest, with the government
participating, and in which
national
welfare priorities are brought
forward. In Israel, this approach has been adapted in the establishment of
various production, marketing and export councils, whereby 50% of their
directorates are allotted to representatives of the various sectors, and the
remaining authority is in the hands of government, through
representatives of various public sectors.
9. The Planning of Marketing in Traditional Rural Areas

22

The third world countries consist mostly of rural areas, and the percentage
of the population living in rural areas is typically between 70 and 90
percent. The villagers are mostly farmers, but this is subsistence farming,
and cultivation, produce, credit and marketing are done after the
traditional fashion. The framework of society is traditional, as compared to
Western society, which is mostly urban.
One of the main goats of third-world countries is development [55]. Many
development efforts were made over the last 30 years, but not always with
satisfactory results. One of the main goats of these countries was the
development
of agriculture, the improvement of the level of food
production, both for internal use and for export, and the improvement of
the farmers standard of living. The agricultural development in general
largely revolves around four main points. At the center we have the
agricultural production processes. Production becomes possible when we
supply to the farmer suitable credit, the possibility of obtaining cheap
supplies of inputs, and the possibility of marketing his produce in a
manner satisfactory to him.
In the traditional system, production is
carried out by age-outdated methods, credit is expensive, and interest is
usurious. Inputs are expensive and scarce, and marketing exploitative and
controlled by middlemen [56]. The efforts of developing the agriculture in
traditional rural areas revolve in fact around these four points. It turns out,
that when the deed is done property, a cooperative can indeed give a true
and satisfactory answer to the problem of development of traditional rural
areas.

9.1 Productions and Marketing

We have seen in the first chapter that marketing which used in the past to
be production oriented, is today a system, which focuses on the diagnosis
of the requirements of the targeted market and the means by which these
requirements may be supplied. One may wonder if the traditional farmer,
producing his traditional goods, within the fabric of a system, which does
not allow much leeway or irregularity, would be capable of adopting the
marketing orientation of our times.
In other words, when we build a
marketing program, when we plan the marketing of the traditional farmer,
or even of an agricultural cooperative which is set up within a traditional
village, should be construct a program based on production as it is, or on
planned and improved production, which would endeavor to define the
optimum distribution of the target and increasing quantities turned out by
improved production. On the other hand, we can come to the traditional
farmer and tell him: We are going to focus on establishing the market
requirements; and based on the market requirements, we are going to
lay out a production program for you which wilt answer those
requirements.
The dilemma presented above is very important. Modern marketing
literature is in fact concerned with the presentation of solutions according
23

to the second formula. Is this formula applicable in the framework of a

rural traditional society? Two examples from Israel may perhaps provide an
answer to this question. The first example relates to the grapes of a
Moshav called Lachish. This Moshav was founded towards the end of the
end of the fifties in the Lachish region. The Moshav is based on mixed
farming, but one of the main production branches is grapes for eating.
The terrain is flat highlands, with soil suitable for vine growing.
The
Moshav employed specialists in the cultivation of vines, and succeeded
in acclimatizing a new strain of edible grapes, which belongs to the
Sultanina family - these are grapes without pits. The new strain proved to
be resistant. And it gave very high yields per unit areas. It had introduced
to the Israeli market. The problem was how to market the Moshav Lachish
grape. In other words, the starting point was that here the production was
already a fact of life and now the output should to be marketed. It was
known to the marketing planners at the Lachish grape had some singular
qualities it ripens in the season in which the competition Is relatively
slight, and the supply may be as high as one-fifth of the total consumption
of edible grapes in Israel The program consisted in a publicity campaign,
or a marketing program, which stressed the quality of the Lachish grapes,
and especially the fact that they had no pits. The grapes were packed in
small transparent uniform plastic containers. They were given a trade
name, and the Moshav hired a marketing specialist who took care of the
produce sales throughout the various markets in Israel. This campaign has
been very successful [57]. Here we have an example in which a
procluct1ve agricultural system sets up for itself a marketing apparatus, to
assist it in selling its produce.
A somewhat similar story may be gleaned from interviews published 1n
various newspapers, with Shimshon Wolner, the manager of the Ramat
Hagolan vineyards. Many wine-grape vines were planted in the Golan
Heights towards the end of the 70s. The volcanic soil of the Golan Hieghts
favored the wine-bearing grapes. At the beginning of the 80-s there were
In Israel quite a few vineyards, which controlled the wine market and
offered to the consumer public a variety of wines at relatively very low
prices, and of course the quality was not very high. The Moshavlm and
kibbutzim of the Golan Heights understood that they must establish a
vineyard of their own, otherwise they would not be able sell all their
produce, and the return would also be very low. Such vineyards were duly
and the wine manufactured. Shimshon Wolner applied a very clever
marketing policy. He sold wine, admittedly of good quality, but at prices
that were four or five times as high as prices, then, current in the market.
The quantity marketed was small at first, and he sold them mostly to
hotels, tourists and prestige restaurants. In parallel he started a
systematic campaign to spread around, as it were surreptitiously, the
name of this precious quality wine which was virtually unobtainable. The
result of this campaign was extraordinary. The wine quantities marketed
grew from year to year, and the demand for these wines increased in
parallel, frequently exceeding the supply offered on the market, and
certainly at a much higher return to the producers.

24

Here we have an example demonstrating how a given agricultural

production forms the framework from which a marketing program is
derived, which if successful establishes also the success of the farmer. It
should be noted that had a market survey been performed at the time, the
current data would have indicated that the market was saturated with
wine, with large stockpiles. The successful program of the Golan vineyards
created new types of demand, which had not existed before, and this
made for great success. In view of all this, we ask ourselves once more:
How should we construct a marketing program for traditional rural areas.
We shall try to answer this question in the following chapters.
9.2 The Financial Structure of a Marketing Cooperative
The financial structure of a marketing cooperative is basically similar to
the financial structure of any other cooperative [59]. The basic conception
is that the purpose of the marketing cooperative is one only - to offer the
members the best service that the cooperative can give. Any other goal
set before it, any goal such as profit making, or even the distribution of
surplus, is unjustified, and in the long run would lead to || failure of the
marketing cooperative in its function as a cooperative. What is the best
service to the member? - The marketing cooperative is the organ, which
sells the members produce, and hands him over the highest obtainable
return. What is the structure of such a cooperative? - On the one hand, we
have the producer/member who passes his produce on to the cooperative.
The cooperative serves in fact as an agency, which keeps the produce for
some time, and then passes it on to the consumer.
The cooperative
receives financial income, which is the return paid by the consumers to the
cooperative for the agricultural produce marketed. In fact, according to
our above definition, the cooperative should pass on all monies it receives
to the farmer, deducting precisely the sum required by the cooperative in
order to exist and go on selling.
What are those expenses made up of? In the first place, we have the
direct operational expenses. These are the expenses involved in running
the cooperative.
They include wages, current expenses, maintenance,
insurance, marketing losses, and any other expense necessary for the
upkeep of the system. In addition, we have to deduct from the return also
the indirect expenses, the
price of financing the founding
of
the
cooperative. Many cooperatives all over the world recover the price of
investment in the cooperative by deducting a certain commission from any
sale by the cooperative. This gives rise to very serious problems. Take for
example a cooperative dairy, which must market the produce of two
members. Suppose, for the sake of argument, that in this cooperative
there are just those two members. The cooperative has a dairy, which
takes care of the conveyance of milk produced by the two members. A
certain sum has been invested in -the dairy, which enables each member
to market as much as he produces. The dairy price is deducted and is
gradually returned within five years. Out of every liter of milk passing
through the dairy, a certain sum is deducted, in order to return the
investment. In our example, over five years, one farmer markets 1.000
25

liters a day. While the other farmer only markets 100 liters a day. The
result is that in effect one member contributes to the return of the
investment ten times as much as the other member. When after five
years, the entire investment has been repaid, and the members are now
free of indirect expenses, since these have all been paid off, the second
member may step up his milk production, let us say to 500 liters a day.
And then make use of a facility the investment in which has been largely
paid by the first member. This is flagrant injustice.
In my opinion, the financing expenses of the cooperative must be entirely
disassociated from the operating costs. The financing expenses must be
paid by all members equally, or equitably, but definitely in a manner
totally disassociated from the operating system of the cooperative. That
process, in which a fixed commission is imposed on the member's
produce, which also covers the indirect expenses of the cooperative, is
wrong. When it is applied in a marketing cooperative, which includes
many members, by way of deduction of commission, or, by investments
out of surplus, we in fact create two kinds of equity. The one is small, it
belongs to the members, who may have paid for a minimum membership
share, while the other is enormous in extent, and cannot be attributed to
any member. The result is a feeling on the part of the members that they
are cut off from the cooperative, and sometimes they become indifferent
to what goes on there.
The price of service given by the cooperative must therefore only include
the direct expenses, plus a certain safety margin, intended to cover
unexpected expenses over certain time periods. This sum is in fact the
surplus of the cooperative. This sum belongs entirely and absolutely to
the members, and must be split up between them in proportion to the use
they make of the cooperative services.
In fact, a good marketing
cooperative will deduct from members the lowest possible sums as
coverage of unexpected expenses, and will hasten to return them as soon
as possible, in order not to let them be devalued by inflation.
9.2.1

Management of the Marketing Cooperative

The marketing cooperative manager should be employed on the basis of

the formula of wages proportionate to productivity. The cooperative
manager should receive some kind of low basic salary, and on top of it a
fixed remuneration, which is to work out according to his success in
marketing the cooperative products. He should receive a certain small
payment, which must be worked out in each case separately of course,
against every volume unit or weight unit which is passed through and
successfully marketed by the cooperative. The interest of the manager,
which will provide an -incentive for him - do his job well, is of course the
desire to earn more money. Good management of the cooperative would
be expressed in increased sales of products brought to the cooperative.
The more he sells, the more money he makes. The more he succeeds in
reducing the cooperative expenses, the more competitive the price he will
be able to offer on the market. In this way both parties are going to
26

benefit. The members will have a cooperative, which sells their produce
well, increases their income and has a manager who makes a lot of
money, but manages the cooperative efficiently, and is not distracted by
thoughts of how to embezzle its funds.
9.2.2

Marketing Cooperatives in Developing Countries

In most of the world's countries there is little understanding of what a

cooperative really is.
In many countries, a cooperative is commonly
regarded as something set up in order to provide profit and income. Such
cooperatives do not serve their members at all. Managers who look for
ways of showing a profit, raise the operating expenses of the cooperative,
and thus injure the members, as well as the consumer public.
The
cooperative becomes a place in which you can employ family relatives,
without regard for the cost of such action to the cooperative. Most
cooperative members are unable to monitor and control the activities,
which go on, suffer from bad management and from corruption of the
organizations which run the cooperatives.
Many cooperatives are founded by decree of high authority, and not by the
members themselves. The cooperatives serve as an excellent financing
instrument in the framework of the so-called economy of affection and the
political clan [60]. For various politicians, and only seldom provide
efficient service to their members.

Figure 3.

27

9.3

Marketing Planning

Let us restate our problem. We are discussing a traditional| village, in

which there lives a community subsisting by traditional agriculture. We
wish to develop this village. Our task is to prepare the village a program,
which enables it to develop.
The peasant who lives in this village is
engaged in agriculture, grows traditional crops, cultivates his field in the
traditional way and obtains low yields. His annual income is low. His daily
output is very low indeed, and so is the production output per unit area of
the plot he cultivates together with his family.
The first phase of our program will consist in preparing for the peasant a
farm plan, which will increase his income, raise his productivity, and
reduce the extent of disguised underemployment in which he lives. The
farm plan takes into account such factors as the free working days
throughout the year of the farmer and his family members, the cultivated
plot at his disposal, the crops he is able to grow, how many working days
are required for each type of crop, and what is the financial return per
working day for each type of crop. Based on all these data the peasant
prepares an optimum plan, which will enable him to keep himself and his
family members employed to the maximum possible extent throughout
the year, as well as to grow crops which will give him a higher financial
return, to cultivate a larger plot, and to obtain a higher income per
working day.

28

It is obvious that this situation is what every peasant desires, especially in

the traditional village, but such a situation does not exist in isolation. Any
change at the production stage depends by close reciprocal link on the
three factors mentioned above - credit, inputs supplies, and marketing.
In the traditional system, the marketing was usually done by a series of
middlemen, who left very little return in the peasant's hands and in his
pockets. In a development system one must give the peasant an answer,
which will let him market his produce, and receive the maximum return.
One of the efficient ways of doing this when it is properly executed is the
cooperative way. In order to produce, the peasant needs suitable credit to
acquire the necessary inputs. The peasant also needs a channel through
which to market his produce with the maximum efficiency.
9.3.1. Present and Expected Production Plan
The first body of data we have to assemble, of course, is the production
plan, which is being applied at present, and how the produce is being
marketed. In an investigation conducted in a rural area in Benin, it was
found that only 35% of the produce has been sold, and the remainder was
consumed by the peasant and his family [61]. Certainly, we must know,
after learning the farming plan presented by the peasant, what are his
production expectations. Another component, which we have to work into
the plan, is the survey of the market capacity for absorbing what we are
about -to produce. In -the first, place we examine what -this market
receives, and then how could 1-t absorb what. We are about to produce.
The next step in our marketing plan would be the marketing cooperative.
It is the cooperative, which has to come into contact with the peasant,
when the produce is ready for sale.
From this moment on, the
cooperative is responsible for the produce, its marketing and sale. The
cooperative should check if the agricultural produce can be stored and for
how long. In many developing countries the peasants sell their produce
immediately after the harvest, when the market is glutted and the prices
are low, because they need the money to repay their debts. After a few
months, in the off-season when supply becomes shorter on the market,
the prices go up. A traditional peasant who lacks any storage capability is
the loser, while the trader makes a profit.
9.3.2. Processing of Agricultural Produce
The second component of the marketing plan is the processing of
agricultural produce.
Would it be possible to process the agricultural
produce? - Taking an example from Israel, we find that in the past the
Moshav farmer used to sell his turkey alive, by weight, to the trader. Later
on, cooperative slaughter houses were set up in which the fowls were
slaughtered, and marketed as clean frozen meat. The next development
was processing. Instead of selling the turkeys whole, they were sold in
parts, cut up and with the choice cuts separately packed, as well as in a
variety of processed meat products. All these processes raised the return
to the farmer. In the developing countries it is possible to process the

29

cassava into gari or into tapioca, just to mention things being done
already, and then to get for them a higher price.
9.3.3. Packaging
The third component is a suitable packaging for a suitable product. A
proper, standardized package of standard weight and suitable quality will
bring a higher return to the farmer. A| description of the sale of corn in
Benin [62], which resembles the manner of doing this in other African
countries, relates how the trader is the one who brings the empty sacks to
the peasant, after threshing, to fill them up. The sack is supposed to
weigh 100 kg when full, and here the trader applies various tricks to get
more corn into the same number of sacks, to the peasants loss. Even
when the quantity sold is measured out, the buyer makes use of all kinds
of methods to change the standard measure to his advantage, and the
peasant comes out the loser again.
9.3.4. Transportation and Delivery
The next component of the marketing plant is transportation. The ability of
the cooperative to transport its produce on its own is generally considered
a great advantage. The cooperative can choose the most suitable means
of transportation, the transportation capacity employed as well as the
direction of transportation according to its needs and capabilities. We find
that many cooperatives in developing countries assume that the
development of the transportation function within the cooperative
framework means that the cooperative must purchase the vehicles, but
this is incorrect. It turns out that the purchase of a truck by the
cooperative is done
without conducting
the necessary economical
examination.
It is generally the case that the truck capacity is not put
to full use most of the year, except at harvest time. And then it is often
insufficient. An additional problem is truck maintenance. In most cases
the cooperative hires a driver, and such drivers receive a very low pay in
most countries of the world.
This driver will in most cases lack an
incentive to do his work. The driver s job carries a heavy responsibility.
The vast majority of roads in rural areas are in very bad repair.
Responsible driving on the part of the driver will prolong the life of the
truck. A driver, who receives insufficient wages, will not care at all if the
truck is going from bad to worse, and will not maintain it properly. The
cooperative might save a little on the driver s wages, but stands to lose a
fortune when the truck if finally wrecked. We find in many countries
throughout the world so called cemeteries of trucks and mechanical
equipment, and in most cases this is a result of a policy offering no
incentive and no suitable remuneration to the managerial and operational
personnel. Such a driver should be paid by the mileage driven, and in
accordance with the capacity transported, driver knows that a well kept
truck in good mechanical condition will enable him to transport more and
earn more. The cooperative must adopt in principle a policy of acquiring
transportation services at the cheapest possible outlay, either by acquiring

30

a truck, or by renting the transportation capacity, which exists in the

vicinity.
9.3.5. Trade Name
Trade names sell agricultural products.
In Israel we are familiar with
"Lachish" grapes, "Golan wines, or "Hatzeva" watermelons. These are
trade names of agricultural produce coming from specific regions, or
specific moshavim. It turns out that a trade name is a good promoter of
sale of agricultural produce especially in markets saturated with the same
produce. Carmel is a trade name of Israeli agricultural produce on the
European markets, which helps the Israeli farmer to obtain higher returns
for his produce. Israeli persimmons were introduced to the European
market under the trade name "Pri-Sharon and with great success. At
Elsmeer, the Netherlands, the flower exchange clock-indicators assign
higher prices to flowers sent in by a certain grower than to flowers from
another source, and sometimes the flowers are bought even before the
clock-indicators are set, and of course, at a higher price. All these are
examples, which demonstrate the importance of the trade name for sales
of agricultural produce.

9.3.6. Marketing Contracts

The Israeli export system of agricultural produce functions by means of
marketing contracts. The organs responsible for agricultural exports sign
marketing contracts with the farmers. The signing of supply contracts of
sorted and graded agricultural produce, on pre-determined dates, and
at set quantities, enables these marketing organs to plan their marketing
campaign in the export market with very high efficiency. On the other
hand, the farmer knows that once he has signed the contracts, his risk is
very
considerably alleviated.
He can turn his power, attention and
energy to production, knowing that a great deal of his troubles has been
settled. He knows that he has to devote himself to his work in order to
succeed. Now he can immerse himself more in his professional activities.
The signing of the contract enables the farmer to obtain advance
payments for cultivation. This kind of credit is usually cheaper, and it is
repaid upon the marketing of the produce.
9.3.7. Credit to the Farmer
As mentioned above, the farmer can only produce when he receives credit.
In the traditional system he used to get credit from the local moneylender.
Such money generally costs very much and the farmer is damaged as a
rule.
Development enterprises in third world countries have set
themselves a goal of providing suitable credit to farmers participating in
various projects in general and cooperatives in particular. For example,
the coffee growers of the Ivory Coast receive a credit from the national
agricultural development bank in this country. This credit is intended to
31

enable the farmer to pass the agricultural season without resorting to the
services of moneylenders.
The credit is intended to cultivate the
plantations. The problem used to be the repayment of this credit. The
Ivory Coast Government, operating through its bank, or through other
organizations, did not provide an efficient marketing system for the coffee,
which should have started with the farmer and ended at the export harbor.
Some stages were left out, which the farmer had to undertake on his own,
but the farmer was not organized to do this, or organized by inefficient
outfits. The farmers eventually found the answer themselves. They sold
the coffee, for cash, at their plantation gates, to private traders. In this
way, they managed to obtain for their produce the highest return possible
so far as they were concerned. The Ivory Coast Government, in adopting a
policy of extending credit without linking it tightly with marketing, and
without offering to the farmer efficient marketing solutions accessible and
satisfactory to him, was left practically without any means of recovering
this credit, which had to be considered lost credit [62]. A similar situation
exists also in other West-African countries.
An additional problem is the result of the lack of understanding by policy
makers of the subject of agricultural credit, in all its aspects. The farmer
receives advances and cultivation loans, which help him to pass the
agricultural season without resorting to the services of moneylenders.
This is the basic assumption of the makers of credit policy in various
places in the world.
However, the farmer has family, children and a wife. He must feed them
and provide for them also in the months in which plantations bear no crop.
And his cash flow is negative. All those project managers have foreseen
no problem here, and have not taken care to provide the farmer with
short-term subsistence advances. The farmer must find a financial source
to that end, and naturally he turns to the source, which is always at his
disposal, the moneylender. At harvest time, when the crop is ready for
sale, the very first name on the list, and the most pressing for repayment
is the money lender, which in most cases is also the marketing
middleman, and he is the one who receives the produce for sale, not the
project nor the cooperative. Again, the cooperative does not sell the
produce so that it has almost no possibility of recovering the credit
extended.
9.3.8. Terms of Payment
When does the marketing cooperative pay the cooperative member for his
produce, and what prices should be paid? - In the cooperative operational
system we have in fact a conflict of opposites. On the one hand the
members wish to obtain for their produce the highest possible price, paid
in cash if possible. On the other hand, the cooperative must first sell the
produce to obtain money for the member, and to that end it must compete
on the market so as to obtain the best possible results. A method of
payment, which is practiced by many marketing cooperatives, is the
commission method. The return is passed on to the producer, following
the sate, and after the deduction of the commission which consists of a
32

certain percentage of the total sale value, and which is intended to cover
the cooperative expenses. This method has advantages, because it does
not involve the cooperative in any risk, and it enables the cooperative to
specialize. The method has also some drawbacks. It does not answer to
the wishes of the small farmer, who prefers to sell his produce to the
cooperative and to receive cash
payment in return.
It is difficult for
marketing cooperatives to compete with the private traders, who pay
cash. Therefore, many marketing cooperatives have resorted to the same
method, that is, they buy from the farmer at the full price, and pay cash.
This method is applied in the case of small farmers in traditional rural
areas [63]. Cooperatives generally prefer to be an organ that transfers
quantities for sate. The cooperative assures a steady supply, acceptance,
payment and making out of invoices [64].
It is most difficult for marketing cooperatives to sell on a commission basis
fresh vegetables and fruits produce, and indeed in many countries the
percentage of marketing cooperatives in this field, including Israel, is
relatively low.
Another problem bound up with this subject is that of minimum prices.
The minimum prices assured to the farmer, mostly the traditional "Farmer,
help to overcome his apprehension concerning unexpected turns for the
worse. On the other hand, minimum prices lead in cases of a market
dumped with the agricultural produce in question to a financial burden on
the cooperative, which is sometimes unbearable. It is important for the
cooperative to receive support on that issue from an external organization,
such as the Government, that will ensure it, and thus offer it security in
cases it is forced to pay. A cooperative unable to withstand this financial
burden, and which does not turn for support to an external organization, is
liable to find itself in a difficult crisis, which will ultimately injure the
members, and lead to a failure of the cooperative.
9.3.9. Financial Structure of the Marketing Cooperative as a Part
of the Marketing Plan.
The marketing plan must also include an appropriate financial structure
of the cooperative.
The
fourth
international cooperative principle
states that part of the cooperative surplus may be employed to finance
future investments in the cooperative. This is a fundamentally misleading
principle, which causes the distortion of the cooperative capital structure
[65]. This principle results in the formation in the cooperative of two
kinds of equity. This is also the case with Tnuva in Israel. This is an
unhealthy situation, which leads to disassociation between the members
and the cooperative.
Moreover, the cooperative and its management, knowing that the sources
for future investments are going to be found in the surplus, and not
directly be provided by the members, will do all they can to build up the
surplus, by paying less to the members in return for their produce. A

33

lower pay to the member gives rise to dissatisfaction of the member as a

result of which he may turn to private marketing.
The financial structure of the cooperative must be made up of investment
capital, which is divided equally or equitably among the members. The
shares of all the members add up to the sum total of investments in the
cooperative. Every increase in the cooperative investments must be
divided entirely between the members, and not be taken out of the
surplus. Such policy will lead to a direct and deeper financial involvement
of the member in the cooperative, and as a result the member will care
more about what goes on in his cooperative.
The cooperatives direct expenses must be divided among all members,
according to the member's degree of participation in the cooperative
business, that is, according to the quantity of produce he markets through
the cooperative. This policy, which removes from the marketing price the
burden of financing expenses, in effect reduces the marketing price, and
creates an incentive for members to market more and more through their
cooperative.
Indeed, the more the member markets through the
cooperative, the greater the reduction in price of each unit marketed. The
member must bear the financing costs, which are a constant factortherefore, the more he markets, and the less financing costs per unit
marketed.
Such a policy achieves more Justice amongst the members, encourages
members to take part in the doings of their cooperative, and raises their
commitment to the success of their cooperative. It shou1d be added and
stressed, that the cooperative must be run by the formula of remuneration
according results obtained, in order to secure for the member the
maximum return he deserves.
9.3.10 Cash Flow
This is an important part in every marketing plan. We have to know what is
our financia1 status in the cooperative. We have to know if our operation is
profitable or are we losing money. We have to plan our actions ahead of
time, and we have to maintain a system of controls, which would allow us
to check ourselves at each step during the year.
A marketing cooperative must prepare for itself a system of cash flow,
which should include all the elements making up the financial structure of
the cooperative. This system must include an estimate of cash flow for
each and every member of the cooperative, based on expected production
during the year. Another component are the departments of the marketing
cooperative.
To this we must add the various financing cost, and the
general expenses of the cooperative. The cash flow system should be laid
out in tables, which will display in full details various activities of the
cooperative, month by month, and on a seasonal and annual level.
9-3-11- Cooperative Educations and Instruction (Extension)
34

Setting up marketing cooperative in traditional rural areas is a very

difficult operation. The difficulties are many and varied but in front of them
all on the scale of difficulties we have the most important factor, which is
the member himself.
The cooperative is the member, and depends on its members for its
existence. When the members do not understand and do not know what
the cooperative is, what are its function, what it is capable of giving to the
member, and what one may not expect from it there is no chance for the
existence of this with this cooperative. Side by side with this, we must
remember that we would like to introduce a variety of components in the
cooperative, as described in the foregoing. The vast majority of these
components represent processes of modernization and innovation, and
they are designed for members who are in fact traditional peasants, who
live in traditional villages.
The failure of many development programs in developing countries was
due to the fact that they have not made within their framework the
necessary provision for appropriate
Instruction programs, programs designed to modify the behavior of the
traditional peasant, and to prepare him to accept, understand and apply
-the transition to more modern agriculture. A
suitable instruction
program, which would include
the components of the activity of the
changing agent, that is, the agricultural extension officer, who works in
direct contact with the traditional peasant inside his village.
The
instruction programs should include the chapters concerning the
introduction of production programs, extension of credit, provision of
inputs, and marketing planning.
The culmination of
the instruction
program should be the introduction of the cooperative, as a possible
and beneficial solution for the traditional peasant, a solution that if
properly carried out, will secure the maximum possible return to the
traditional peasant.
The instruction program should focus, within the framework of the
marketing plan, on making people realize the importance of marketing
information. Marketing information is a powerful instrument, both in the
hands of a farmer who is about to draw up his annual production plan, and
in the hands of the cooperative manager, who is about to decide on his
marketing policy for each and every separate product passing through the
cooperative.
10. Conclusion
Our central problem here was how to set up marketing cooperative in a
traditional village, located in the traditional rural areas of the developing
countries all over the world. Let us remember that the marketing system
is generally a system intended to pass on the produce of the producer in
the most efficient manner on to the consumers. The marketing system in
traditional rural areas is a system, which exploits as far as it cans both the
producer and the consumer. This system pays to the producer the very
35

lowest price it can, while to the consumer it sells at the very highest prices
it can obtain. The system includes a great many intermediary stages, and
each stage in the system takes its toll. In the traditional system we are
familiar with farmers going out and waiting at the roadside with their
produce for customers to come and buy whatever they need directly. We
have here a situation in which the farmer sells directly to the consumer,
without any middlemen. Both parties benefit. In Israel we are familiar
with the phenomenon of sates stores being opened by kibbutzim and
moshavim at the roadside, where they sell their produce directly to a
consumer passing by. This is another case of direct sale from the producer
to the consumer without intermediate stages.
The goal of the marketing cooperative in traditional rural areas is to do
whatever it can in order to reduce the number of stages to the necessary
minimum. The cooperative must endeavor to have its produce sold to
consumers with less and less middlemen intervening, and if it makes it this
will be a measure of its great success.
References:
1) Hornik, Jacob: Marketing Management: Systems, Theories and
Strategies
Everyman's University Press. Tel Aviv 1985 Vol. I P.P. 31-36
2) Maynard. H.H. and Beckman, T.N.: Principles of Marketing
The Ronald Press Company - New York Fifth Edition - 1952 P. 26
3) Locley. C.L. and Dirksen. C.J.: Cases in Marketing
Allyn and Bacon Inc. N.Y. (4th Printing) 1956 P.3
4) Chaturvedi, J.N.: The Theory of Marketing in Underdeveloped Countries
Kitab Mahal Publishers. Allahabad. 1959. P.3
5) Ottenson, F.S. Panchar, W.G. and Patterson, J.M.: Marketing the Firms
Viewpoint
The Macmillan Company, N.Y. 1966 P.82
6) Definition of R.A. King introduced in footnotes on page 85 in: Ruttan,
V.W. "Agricultural Product and Factor Markets in Southeast Asia" in:
Anschel. K.R. and A1 (EO): Agricultural Cooperatives and Markets in
Developing Countries
Praeger special studies in international economy and development
New York 1969.
7) Mathur. B.S.: Cooperation in India
Sahitya Bhawan. Agra-3 1971 P. 344
8)
Agrawal, G.R.: Institutions for marketing by women
asspecial
groups' problems and required improvements.
Centre for economic development
and administration, Tribhuvan
University, Kirtipur, Katmandu 1984, P.I
9) Abbot, J.C.: Marketing Problems and Improvement Programs
F.A.O. Marketing Guide No. 1. Rome 3rd Printing 1966 P.42
10) Ibid. P. 45-46
11) Chaturvedi. ibid. P.P. 6-9
12) Maynard. Ibid P.37
13) Mathur. Ibid, P.345
36

14) Galor Zvi:

"Introduction to Cooperation"
International Institute for
Development, Cooperation and Labour
Studies (Afro-Asian Institute). Tel Aviv 1982 Ch. IV.
15) Forman. S. and Riegelhaupt "Market Place and Marketing System:
Towards a Theory of Peasant Economic Integration"
Joint reprint series No. 36. School of African and Asian studies and
Institute of Development Studies at the University of Sussex. Taken
from Comparative Studies in Society and History Vol XII No. 2 April 1970
P. 114.
16) ibid. P.P. 189-193
17) Mathur, ibid, P. 346
18) ibid. P.P. 347-348. See also: Agrawal. ibid. P.P. 18-19,
Abbot, ibid. P.P. 50-115, and Wall David: "The International Banana
Market"
Journal of Economic Studies Vol III NO. 3-4 Dec 1968 P.P. 54-61
19) Galor. Z. (1982). ibid
20) Ottenson. ibid. P.P. 82-86
21)
For another discussion on Marketing Mix see: Matcom (ILO):
Marketing of Agricultural Produce
International Labour Organisation. Geneva 1982, Topic 3
22)
International Federation of Agriculture Producers: Improving
Marketing and Farm Inputs Supply in Developing Countries: A Plan of
Action for Farmers' Organizations Farm Leaders' Seminar, Bonn, Federal
Republic of Germany. April 1986. P.P. 3-4
23) Galor, Z (1982), ibid. ibid
24) Definitions brought by Mathur. ibid P.P. 349-350
25) Galor. Z (1982), ibid. ibid.
26) Hardis. I.W.: "Cooperative Theory and Market Implications:
A selected review". P. 49 In: Anschel, ibid.
27) Whetham. E.M.: "A Comparison of Marketing Structures Agriculture
Produce In
Developing Countries". P.P. 26-27
In Digby. M. and Mccready, K.J. (Ed): Book of Agriculture Cooperatives 1970
Basil Blackwell, Oxford. 1970
28) Hyden. G: "The struggle for success -in cooperation: Kabuku Noan-i
UJamaa Cooperative Society. Tanzania". P.P. 212-213
In Webster. F.H. (Ed): Year Book of Agricultural Cooperation, 1977
Parchment. Oxford, 1977
29)
Andreou. P. et Islam, M.M.: "La
commercialisation
coop
Bangladesh".
Revue des etudes cooperatives No. 199 Paris 1980 P.P. 111-115!
30)
Patel, M.S.: Cooperative Marketing in India
Review of International Coopearation. Vol. 69, No. 2 1976. P. 52.
31. Galor Z. "Towards the Cooperative Development Traditional Rural
Areas". IIDCLS. Tel Aviv 1985
32) Further discussion on problems in marketing cooperatives, see:
- - Callar. D: The Social and Cultural Factors Involved in Production by
Small Farmers in Wedza Communal Area, Zimbabwe, of Maize and Its
Marketing.
Unesco. Paris. RRD 17. Dec 1982 P. 61

37

- Vinyor. T.R.: Les facteurs socioculturels qui orientent la production

et
la commercialisation de certaines denrees alimentaires par les
petits fermiers dans les petits fermiers dans la Republique populaire du
Benin
Unesco, Paris. RRD16. Aout 1982 P.P. 64-69 i
- Semana. A.R.: The social and cultural factors involved in small scale
farmers food crop production and marketing in Malawi
Unesco. Paris. RRD 20. August 1983. P. 15
- Macbailey. F.E.: The social and cultural factors involved in production
by small farmers in Cameroun of plantain and cassava and their
marketing
Unesco, Paris, RRD 21, Sept. 1983 P. 41 1983 P. 41
33) Tayeh. A.K.: "Cooperative Olive Oil Processing and Marketing in
Jordan". P.P. 67-68
In: Digby. M. (Ed): Year Book of Agricultural Cooperatives 1969
Basil Blacwell. Oxforrd1969.
34) Andrew, P.: "The Cooperative Marketing of Carobs in
Cyprus". P. 233
In: Webster. F.H. (Ed): Year Book of Agricultural Cooperatives 1976
Oxford, 1976
See also:
Paris, A: "Une enquete sur les cooperatives Cypriotes de
commercialisation des agrumes et autres fruits de tables"
Revue des Etudes Cooperatives Paris. NO. 183. 1976. P.P. 45-54
35) Granier, J.C.: "La Commercialisation des fruits et legumes en Algerie:
Revue des Etudes Cooperatives Paris, No. 194 1978. P.P. 69-88
36) Galor, Z. (1985), ibid
37) Preuss, W.: Cooperation in Israel and the World
Rubin Mass. Jerusalem, 1960, P. 235
38) Verlinsky. N.: "Tnuva. The Cooperative Marketing Society for
Cooperative Produce"
Afro-Asian Institute (N.D. - Around the Sixties) PP. 4-5
39) Vitels, H.:
A History of the Cooperative Movement In Israel Book
Six: Central Agricultural Cooperative
Valentine Mitchel, London. 1970 P. 339
40) Verlinsky. ibid. P. 6
41) Vitels. ibid. P. 293
42) ibid. P. 344
43) Verlinsky. ibid. P.P. 11-12
44) Preuss. ibid. P. 237
45) Verlinski. ibid P.P. 13-14
46) Farm's Leaders Seminar: ibid. P. 16
47) Verlinsky. ibid. P. 18
48) Izraeli, D. and a1.:"Marketing Boards and Societal Marketing:
In: Journal of Rural Cooperation Vol IV NO. 2 1976. P. 105
49) ibid, P. 107
50) Whetham. ibid. P.P. 27-28
51) McGhie, A. T. S. : "Recent Development In Producer Market-ing
Legislation in New Zealand" P. 159
In: Year Book of Agricultural Cooperative, 1964 Basil Blackwell. Oxford.
1964
38

52) Izraeli, ibid. P.108

53) Storm, R.:
"Government-Cooperative Groundnut Marketing in
Senegal and Gambia"
Journal of Rural Cooperation Vol. V No. 1. 1977. P. 30
54) Izraeli. ibid P. 110
55) Galor Z.: "Man and Development" Published by IIDCLS. Tel Aviv. 1986.
56) Galor, 1986. ibid.
57) Interview with Asa Oren, member of Moshav Lachish. 1988
59) Galor, Z. "Interest and Surplus in the Cooperative". To be published in
International Cooperative Review December. 1989
60) Galor. 1986. ibid.
61) Vinyor. ibid. P. 68
62) ibid. P. 69
63) Interview with Mr. Kouassi from the B.N.D.A. of Ivory Coast. done in
Israel. 1988
64) Mathur. ibid. PP. 366-367
65) Fualdes, J: "Les commercants et leurs cooperatives"
Revue des Etudes Cooperative Mutualistes et Associ ati ves.
Paris, No. 22 1987, P. 19
66) Galor. 1989, ibid.

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