Totgars’ Co-operative Sale Society: Dovetailing Business to Meet Members’ Needs

A cooperative of arecanut producers in southern India began by marketing the produce on behalf of its members. Rather than merely offering the produce for sale in regulated auction markets, the cooperative also became a commission agent, earning a margin on sales. Subsequently, it began buying nuts in the market so that it could add value. It processed the nuts into an intermediate product that goes into making a popular chewable product. Marketing a profitable crop, it offered its smallholder members a gamut of services they need: credit, inputs, extension, and even a supermarket. It raised the capital it needs by offering higher than market returns on deposits by its members. It rewarded members through dividends, apart from the services, at competitive or reduced prices. All this did not enable it to take its members’ allegiance for granted—a group of producers left to start a competing coop. Recognizing limited value-adding opportunities, threats from imports, and potential health regulations that might limit the market for the nuts, it considered how it can help members diversify to other crops. A case to discuss smallholder producer organizations and integrating vertically and horizontally.