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MARKETING
AGRICULTURAL PRODUCTS THROUGH CONSUMERS COOPERATIVE SOCIETIES
CHAPTER ONE
INTRODUCTION
1.1
BACKGROUND OF THE STUDY
Recognizing
Nigeria’s tremendous Agricultural potentials, the government has accepted the
view that the country should resolve to make agriculture the main source of
living of the economy and to Enugu state.
Agricultural development has to with the increase of the agricultural
productivity to be able to generate substantial surpluses. The issues of
surpluses lead to the issue of marketing because when they engage in large
production, and then there will be surpluses left out.Most of our farmers are
illiterate and poor, for this reason, they are dependent on rural usurers for
capital at highest rate of interest during cultivation period and again they
are bound to sell their products to the middlemen as they do not have capacity
to sell to the consumers directly. As a result, they are not getting fair price
of their products. So, it is clearly understood that our farmers are becoming
poorer day by day due to the exploitation by the middlemen and usurers. Under
these circumstances, Cooperative Marketing can be the model of agricultural
Marketing for our farmers.
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.
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