MARKETING AGRICULTURAL PRODUCTS THROUGH CONSUMERS COOPERATIVE SOCIETIES

By

Author

Presented To

Department of Economics

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Throughout human history some activities have always been undertaken by groups rather than individuals, simply because this was a better and more economic way of doing things. Consumers cooperative is a method of working together with others having the same or similar needs or problems. It is a method of pooling resources and human endeavour, acting in an organized, disciplined manner. Consumer’s cooperative can engage in marketing of Agricultural product through the collaborative efforts of two or more companies working together in advertising and promotional efforts to reach the same goal. This is sometimes referred to as co-op advertising, but is also not limited to the advertising arena alone. Typically this is seen when a manufacturer supports the efforts of a retailer, but can also be used by multiple businesses looking to pool their resources to defray costs for advertising and promotion (DiBona, 2010). Informal network of financial markets participants include money lenders, rotating savings collectors, mutual assistance groups, Self-Help Groups (SHGS) etc. the Self-Help groups have long been in existence in Nigeria as informal or semi-formal associations known in different tribes as Isusu in Igbo, Adashe in Hausa, Ajo in Yoruba, Yak‟kishar in Ngas, Bam and Oku in Tiv and Kalabari Ijaw respectively, etc. These associations becomes formal institutions of credit if they are registered as cooperative societies (Mohammed, 2011). They are sub-set of the formal institutions (when registered) which cover a wide spectrum of economic activities including farming, fishing, petty trading, arts and crafts, local processing and the likes that serve as source of livelihood of millions of Nigerians living both in rural and urban areas. Of recent, Cooperative Societies have increased significantly in terms of number, membership and activities across the country. They provide a veritable source for funds mobilization and participatory credit administration in Nigeria. They are organized to mobilize savings and to channel financial resources to individual needs, largely for consumption. The Cooperative Societies are said to supplement the efforts of the formal financial institutions by mobilizing and channeling financial resources to the deficit areas (especially to the low and medium) income earners in Nigeria in both rural and urban centres. Their role in economic life of the Nigerian economy cannot be over emphasized. There is no doubt that cooperatives, which have their primary goals centred on social and economic aspect of their members and by extension the society as a whole can be employed for this purpose. Cooperatives, although established conventionally to cater strictly for the wellbeing of members have been discovered to be a veritable tool for economic progress and improved standard of living in the ever changing world.

Farmers are illiterate and poor for that reason they do not have capacity to run farming activities effectively and efficiently. As farmers, do not have educational qualifications and financial ability to store their products and the transport them to the market place for better price. As a result, they are bound to sell their products to the middlemen at lower price which is below their production cost in maximum cases. Under these circumstances, consumer’s co-operative marketing strategy can solve this problem.

1.2 STATLEMENT OF PROBLEM

Agricultural products marketing efficiency has been bedeviled by both external and internal market related factors. These factors are also peculiar to agricultural product marketing in Enugu state and Udi local government Area in particular. The markets have served the economy well in the past but currently inadequate in the face of growing demand for products due to population growth and changing of dietary demand patterns. There is the inadequacy of transport service in rural areas. The Rural feeder roads are in a very bad condition. The entire rural communities rely mainly on human transport before they will talk of conveying their produce.

There is the problem of marketing information because the required data required are not available and even those that are available is not being managed properly to generate the required information to support decision making by the producers, consumers, government officials and other market participants.

There are no official or organized ways of transmitting price information in Nigerian’s agricultural markets; therefore there is no mechanism for coordinating production activities of the millions of farmers with the demand of millions of individual, corporate and institutional consumers. The paucity of data and information also limit forecasting planning farm management and marketing practices.

Another problem associated with the poor marketing for agricultural produce in Nigeria is the existence of an inefficient and inadequate storage system. As a result there is a substantial waste at the farm level and the poor storage system also contributes to price fluctuations in the agricultural markets whereby produce prices are low during harvest time’s adversely affecting farmer incomes. At times the price fluctuations are magnified by speculative activities in the face of scarcity of market information all in favour of marketers only further aggravating the poor economic position of farmers.

Another related problem is that of poor storage system in the low level of agricultural produce.

There is also the limited nature of raw agricultural produce processing limits how this potentially flourishing agro-business can contribute to enhancing the economics value of food, improving farmers income by providing additional outlets for their produce, particularly in the harvest seasons when prices tend to be low, generating employment, enhancing the storage of food and other produce, and reducing dependence on imported processed food and other agro-industrial products.

In addition to problems associated with inadequacy of agricultural facilities for agricultural produce, there is a such as irradiation and freeze dying to reduce rotting in particular and spoilage in general and thereby increasing effective agricultural supplies in the country.

Another economic problem associated with agricultural marketing in Nigeria, Enugu state to be precise has to do with the absence of standardization of products in the market place. Standardized system of grading and measurement, which enhances marketing efficiency, is not a feature of agricultural markets in Nigeria. Grades are determined arbitrarily by sizes, colour or smell. Measures come in various types of metal and plastic bowls, dishes, tins basket and calabashes.  The use of weighing scales is limited which explains why prices are determined by haggling between sellers and buyers. In addition, sorting and packaging activities are not carried out further reducing the ability of using a sound marketing system to boost farmers’ income and ensure adequate protection of consumers in the country.

Agricultural produce supply and price instabilities characterized the Nigerian agricultural markets. By the nature of agricultural production in Nigeria and the limitation imposed by the marketing problems highlighted previously, farmers generally adjust current productions according to prevailing prices in the immediate past period or season. When the price of commodity is lower than expected in a particular season due to period to over supply into the market, farmers will cut back on production and supply less into the market the next period. This subsequent short supply in the next time leads to supply and price gyrations which follow a cobweb-like pattern which may be explosive depending on how elastic the supply side of the commodity market is. In summary agricultural processing and marketing have problems associated with them which include:

- Poor storage of the agricultural products which leads to its rottenness.

- Poor market information system.

- Low market demand of value-added products by the consumers.

- Limited purchasing power of consumers.

- Stiff competition between the firms, in terms of location, quality of food and prices.

1.3 OBJECTIVES OF THE STUDY

The following are the objectives of the study:

1. To analyze the present marketing system of Agricultural products in Udi Local Government Area of Enugu state.

2. To investigate whether consumer’s co-operative Societies have a role to play in marketing Agricultural products in Udi Local Government Area of Enugu state.

3. To find out the problems of marketing Agricultural products in Udi Local Government Area of Enugu state.

4.  To suggest ways for improving agricultural product marketing through consumer’s cooperative societies in Udi Local Government Area of Enugu state.

1.4 RESEARCH QUESTION   

1. How is the present marketing system of Agricultural products in Udi Local Government Area of Enugu state?

2. Do consumer’s co-operative Societies have a role to play in marketing Agricultural products in Udi Local Government Area of Enugu state?

3. What are the problems of marketing Agricultural products in Udi Local Government Area of Enugu state?

4.  What are the ways for improving agricultural product marketing through consumer’s cooperative societies in Udi Local Government Area of Enugu state?

1.5 RESEARCH HYPOTHESIS

From the research questions, the following hypotheses were formulated:

H0: The present marketing system of Agricultural products in Udi Local Government Area of Enugu state is bad.

H1: The present marketing system of Agricultural products in Udi Local Government Area of Enugu state is good.

H0: Consumer’s co-operative Societies have no role to play in marketing Agricultural products in Udi Local Government Area of Enugu state.

H2: Consumer’s co-operative Societies have a role to play in marketing Agricultural products in Udi Local Government Area of Enugu state.

H0: The problems of marketing Agricultural products in Udi Local Government Area of Enugu state are not lack of storage facilities, poor market information system and low market demand of value-added products by the consumers.

H3: The problems of marketing Agricultural products in Udi Local Government Area of Enugu state are lack of storage facilities, poor market information system and low market demand of value-added products by the consumers.

1.6 SIGNIFICANCE OF THE STUDY

It is important to point out that during the completion of this project, it will be of immense significance to the following

RESEARCHERS:  Other researchers on this topic or similar topic will find this work helpful as it will form a base of review of related literature and also a stepping-stone for future researchers.

ECONOMY: This work will help to improve the national output and thereby increase the national income.  This is because of improvement in the efficiency and effectiveness of the operations as well as the overall success of the state, which will be achieved through adequate processing and marketing.

LAW MAKERS: The law makers will implement policies that will enhance the production and marketing of agricultural products in Nigeria, The standard of corporations will be increased as a result of the knowledge acquired from this research work.

1.7 SCOPE OF THE STUDY

The study is on “Marketing agricultural products through consumer cooperatives  societies in Enugu state”. The scope of the study will be restricted to Udi Local Government Area of Enugu state.

1.8 LIMITATIONS OF THE STUDY

The following constraints faced the researcher and limited his efforts in elaborating the research work. 

FINANCE: The researcher is a full time student and has been discouraged from traveling to or visiting all Udi Local Government Area and its Environs to collect data for her study due to lack of fund, she has therefore chosen very few households because of proximity and ease of contact to the community.

TIME:  There is a limited time for this project work. It would have been desired for a longer time to exhaust the topic and extend the coverage but it is not possible.

PRESSURE OF ACADEMIC WORK:  The researcher have been hindered by pressure of academic work from achieving the extensive research this work should have deserved.

1.9 DEFINITION OF TERMS

Marketing:  This means to advertise or promote something in

Other for the consumers to benefit from.

Agriculture:This is the science or practice of farming i.e.

Cultivating of the soil or rearing of animals.