Food and Fertilizer Technology Center - publications

Nov. 01, 2016

Improving marketing efficiency—the role of agricultural cooperatives

Improving marketing efficiency—the role of agricultural cooperatives

Agricultural marketing has recently experienced a shift, which has presented challenges for marketing efficiency as well as difficulties for small-scale farmers. There are some ways to tackle these situations. One is through the role of agricultural cooperatives, which have the ability to strengthen farmers’ bargaining power in the market place, while combining capital to enhance competitiveness.  

This seminar provided a forum for a variety of specialists to present the role of agricultural cooperatives in addressing food marketing efficiency in each participant’s respective country. The general discussion, which followed the presentations, gave the participants the opportunity to deliberate on the value of agricultural cooperatives in the pursuit of empowering small-scale farmers to compete with large scale consumption sites, thus securing higher profit for farmers.
Major findings and recommendations:

  • Enhance physical efficiency through accessibility to secondary marketing agencies and joint shipment groups;
  • Improve pricing efficiency and stability while minimizing transaction costs generated by opportunism;
  • Empower cooperatives to take on greater responsibility to reduce the role of intermediary middlemen and thus shorten the supply chain;
  • Strengthen education and training of cooperative member-owners and employees;
  • Improve policy and support in the area of software development to better integrate technology into agricultural marketing and distribution sites;
  • Diversify cooperative services to provide greater resources to cooperators while encouraging a higher degree of commodity farming, as seen in large developed countries;
  • Encourage the pooling of resources with special incentives for high quality products;
  • Build effective administrative structures with experienced, qualified leadership and management to enhance organization;
  • Focus on sustainability in the agricultural cooperative movement, including the responsibility to practice environmentally sound business; and
  • Encourage greater government involvement in the establishment, formation and development of agricultural cooperatives.

Improving marketing efficiency - the role of agricultural cooperatives

Held in Seoul, Korea, 14-18 September
No. of participating countries: 8 (Indonesia, Japan, Korea, Malaysia, Philippines, Taiwan, Thailand and Vietnam)
No. of papers presented: 13
No. of participants: 14 speakers from 8 countries 
Co-organizers: National Agricultural Cooperative Federation

List of papers

Resource papers

1.    The impact of agricultural cooperatives on agricultural marketing: Taiwan’s experience
    -    Cheng-Wei Chen
2.    Evaluation of marketing efficiency and development strategies of cooperatives’ food distribution Center
    -    Dong-Hwan Kim
3.    A new vision of growth for the beef industry and the expected roles of agricultural cooperatives in Hokkaido, Japan
    -    Hiroshi Takahashi
4.    Cooperative movement in the supply chain of agricultural produce: the way forward
    -    Rozhan Abu Dardak
5.    The role of agricultural cooperatives in improving agricultural products in Korea
    -    Sung-Ku Kwon
6.    The role of farmers’ owned enterprises to promote an efficient marketing of agricultural products in Indonesia
    -    Kurnia Suci Indraningsih
7.    Current situation and prospects of cooperatives in Vietnam’s agricultural sector
    -    Nguyen Thin Tan Loc
8.    The changing economic performance of Japan’s agricultural cooperatives
    -    Yoshihisa Godo
9.    Agricultural cooperatives’ pooling operations to improve marketing efficiency in Korea
    -    Chun-Kwon Yoo
10.    Improving marketing efficiency through agricultural cooperatives: successful cases in the Philippines
    -    Zenaida Sumalde
11.    Roles of cooperative movement as middlemen to increase the efficiency of agricultural marketing in Malaysia
    -    Syahrin bin Suhaimee
12.    Successful cases of agricultural cooperatives marketing activities for improving marketing efficiency in Thailand 
    -    Borworn Tanrattanaphong
13.    The functions of farmers’ association in improving the efficiency of agricultural products marketing—a case study of Taiwanese mangoes
    -    Mao-Hsiang Su

For further information, contact Dr. Chan-Ik Chun, FFTC agricultural economist

Director Huang stresses a point during the workshop discussion. The workshop became a sharing of experiences among the 14 speakers who come from 18 countries. Topics include the role of farmers’ owned enterprises, the cooperative movement in the supply chain of agricultural produce, successful cases of agri cooperatives marketing activities, among others.

In his welcome remarks, FFTC Director Yu-Tsai Huang emphasized the many changes that had happened to the cooperative movement and agricultural marketing. Concrete samples include the emergence of hypermarkets and the growing concern about food safety among consumers.

Speakers from eight countries (Indonesia, Japan, Korea, MalaTaiwan, Thailand and Vietnam) give the thumb-up sign in their official group pose.ysia, Philippines, 

Mr. Sung-Ki Ahn of Hessare (man pointing in pink shirt) marketing agency, explains to the seminar participants the operations of the fruits and vegetables packing plant during the educational trip.

The Hessare fruit secondary marketing association in Korea operates a modern packing plant where fruits and vegetables are packed before they are brought to the supermarkets. In Korea, the agricultural market, especially for fruits and vegetables, consists of a large number of small-scale farmers and small number of large-scale buyers.

Ginseng, one of Korea’s most popular homegrown agricultural produce is well-packed at Nonghyup’s Hanaro Club, in Yangjae-dong, Seoul. Resembling a large warehouse, the Hanaro Club is oftentimes referred to as Korea’s Costsco. 

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