THE ROLES OF CO-OPERATIVES AND GOVERNMENT IN DISTRIBUTIVE TRADE
The Role of Co-operatives in Distributive Trade
A co-operative society is defined as a voluntary and business organisation 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 the consumers’ co-operative societies do engage in the distribution of products either directly from the manufacturer or wholesalers and sell to their members (consumers) at reduced prices. The role of co-operative societies include:
- Stock variety of goods: The consumers cooperative societies buy variety of goods from the manufacturer or wholesaler hence they are exposed to a wide range of goods.
- Sell in small quantity to members: The co-operative societies buy in reasonable quantity from wholesaler and sell in bits to the members.
- Grand credit facilities to members: The co-operative society can grant credit facilities to members so as to enable them enjoy goods without payment immediately.
- Give advice: The co-operative society also gives advice to their members (consumers) as well as the manufacturers/wholesalers.
- Bring products closer to members: They also ensure that products are brought to the door step of the consumers (members).
- Fight hoarding: They fight against hoarding by wholesalers and retailers by ensuring that they stock lots of the products for use by members (consumers).
- Stabilise prices: They also help in stabilising the prices of goods by selling them at affordable prices to members.
- 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).
- 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.”
The Role of Government in Distributive Trade
The government – whether at the 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. Examples of such agencies include:
- The Nigeria National Supply Company Limited (N.N.S.C). This agency was set up in 1972 to supplement private efforts in product distributions. It is now moribund.
- Marketing board. Several marketing boards for various products were set-up to enhance the marketing of products in the country.
- The River Basin Authorities were also set up to encourage large production and distribution of agricultural produce.
The role of government in the distribution of commodities include:
- Provision of transport system: This helps to move products from where they are produced to where they are needed either by road, rail, air, water, etc.
- Provision of storage facilities: Government also provides storage facilities to store certain products when they are in excess.
- Control of prices: Government agencies purchase goods in large quantities and sell them to the consumers directly at controlled prices.
- Price stabilisation: The agencies through the distributive activities are able to stabilise prices in order to check inflation.
- Prevention of artificial scarcity: When the agencies discover that some middlemen are hoarding some commodities, they release the products from strategic reserves thereby preventing artificial scarcity.
- Importation of essential commodities: When government agencies discover that certain commodities are scarce and their prices are going up, they can import such commodities in order to prevent scarcity and increase in their prices.
- Establishment of communication system: This helps to bring the producers and. the consumers together for easy distribution of commodities.