The Role of Co-Operatives and the Government in Distributive Trade

A co-operative society is defined as a voluntary business organization in which a group of individuals with common interest pool their resources together to promote the economic and welfare of their members in production, distribution and consumption of goods and services. The producers and consumers’ cooperative societies engage in the distribution of products either directly from the manufacturer or wholesalers and sell to their members/consumers at reduced prices.

The government on the other hand-whether federal, state or local level has a major role to play in the distribution of goods or commodities. Government is able to participate in the distribution of commodities through the establishment of distributive agencies. The role of the government is the distribution of commodities are the basic responsibilities a government should carry out such as: Provision of transport system, provision of storage facilities, control of prices, price stabilization, prevention of artificial scarcity, importation of essential commodities and establishment of communication system.

The role of co-operative societies are as follows:

1. Stock variety of goods: The consumers co-operative societies buy variety of goods from the manufacturer or wholesaler hence they are exposed to a wide range of goods.

2. Sell in small quantity to members: The co-operative societies buy in reasonable quantity from wholesaler and sell in bits to the members.

3. grant credit facilities to members: The co-operative society can grant facilities to members so as to enable them enjoy goods without payment immediately.

4. Give advice: The co-operative society also gives advice tot heir members (consumers) as well as the manufacturers/wholesalers.

5. Bring products closer to members: They also ensure that products are brought to the door step of the consumers (members).

6. Fight hoarding: They fight against hoarding by wholesalers and retainers by ensuring that they stock lots of the products for use by members (consumers).

7. Stabilize prices: They also help in stabilizing the prices of goods by selling them at affordable prices to members.

8. Elimination of middlemen: They can eliminate the activities of middlemen by buying their goods directly from manufacturers and selling them directly to the consumers (members).

9. Marketing of members’ products: They also assist their members in marketing their products (I.e producers’ cooperative society) by ensuring fair prices for their products.

African countries and other developing nations face the challenges of benefiting from the government’s role. Especially in countries where the government is corrupt. They enact policies and form agencies but do not function properly to achieve their goals. Take for instance, in Nigeria. The Nigerian National Supply Company Limited (N.N.S.C) was set up in 1972 to supplement private efforts in product distributions. It is now moribund and as good as not been created. Several marketing boards for various products were set up to enhance the marketing of products in the country and the River Basin Authorities were also set up to encourage large production and distribution of agricultural products. Are these agencies functioning now? If yes, Nigeria would have been lots better than its present state.

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