Creation and marketing activity problems of service cooperatives in agri-culture


The problems of creation and effective functioning of service cooperatives in agriculture are analyzed. Formation of their microeconomic goals, which are determined by the presence of many centers of optimization, are shown. The inadequate coherence between these goals and the directions of state financial support was the most important factor in deterring of formation servicing co-operation in Ukraine. The mistakenness of common points of view regarding the absolute competitive advantages of agroholdings in comparison with service cooperatives is substantiated. Service cooperatives can provide formation as large commodity parties as agroholdings without excessive consolidation of economic entities. In addition, service cooperatives may avoid competition by implementing marketing strategy focused on satisfying needs of consumers of individual narrow market segments.  The main argument is the ability to overcome the monopolization of the market by separate structures and ensure market price generation. General tendencies of agricultural development are determined by the prices which are formed by separate monopoly structure without cooperatives. Price is the main element of the market mechanism of production regulation. It is a benchmark that defines the directions of marketing activity of agricultural enterprise. There are lots of tendencies that should be expected in such condition. These are huge companies, which form their own distribution channels. They independently deliver products to consumers, passing the existing intermediary structures which monopolized market. They prefer production of products for export, as monopolistic tendencies in pricing are largely overcomed in foreign markets and prices for agricultural products are higher and more stable. Cooperative idea is aimed at formation on cooperative basis of the infrastructure of the agrarian market in some countries. Evidence of this is predominantly cooperative ownership of the wholesale markets for agricultural products, created in the places of raw material production. Government support of creation markets ensures market generation of prices and goods flows through the organization of auction tenders. The dissemination of information on the results of these trades will affect the price level generated by other channels, stabilizing prices.


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Poperechny, S., Salamin, O., & Kubrak, N. (2019). Creation and marketing activity problems of service cooperatives in agri-culture. Scientific Messenger of LNU of Veterinary Medicine and Biotechnologies. Series "Economical Sciences", 21(92), 49-54.