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Agreed Purchasing of the Agricultural Crops: An outstanding Step toward Reviving the Rural Cooperatives by: H. Shirzad
2019/06/24

In the status quo, the trade and price policies are tending toward improving the room for the trade of the agricultural crops. The increasing trend of the international –oriented markets has resulted in trade improvement, increasing competitiveness, too, Shirzad stated.

According to the recent studies, despite existing shortages in securing agricultural inputs, the majority of the rural coop member has trusted in their cooperative society. Creating a social capital, this confidence reinforces the financial capacities as well as cooperative performance.

Referring to the tangible shifts due to the agreed purchasing, including the enhanced consumers' welfare and decreased state costs, Shirzad affirmed that by applying a procedural modification (price-support programs) of agreed purchasing, CORC regains its original stance toward conducting the anticipated missions in the Article of Association.

Given the dominating atmosphere to accession to WTO, the agriculture sector needs to acquire competitive advantages, therefore adopting a comprehensive marketing system which covers the farm to fork stages, seem necessary.

Improving the room for agro-business, observing the due standards for running quality movement, and cutting middlemen off, the agreed purchasing could empower the cooperative members and secure the mutual benefits of both parties.

Describing the inadequacy of the guaranteed purchasing policy, passed in 1989, Shirzad, as a knowledgeable expert in the field of agricultural development, said that at the initial stages, the small farmers were resorting to this law to save their small- mid business against the middlemen, notwithstanding, the law enforcement was confronted by many obstacles including inadequate research, non-anticipation of the side effects and lack of legal attachments.

Deviating of the very nature of the law, the enforcement of the guaranteed purchasing law, not only brought about many financial losses for national and producers' interests but also caused scarcity and loss of quality of the goods.

Explaining the agreed transaction process, Shirzad added that "agreed purchasing", in the "organizing plan of agricultural crops transactions", is a procedure laying down on the legal route of supply and demand as well as the signed contract s by both parties.

"Hindering the damages of the guaranteed purchasing, all the process of agreed purchasing should be set up prior to the guaranteed purchasing. The whole process of agreed purchasing is operated by the national unions of the rural and agricultural cooperatives and monitored by the state bodies including CORC", Shirzad Stated.

He also mentioned the lack of cash, mental resistance of the involving managers, lack of appropriate contract farming mechanisms and high risk due to price fluctuation caused by macro-economy instabilities, as the major challenges which should be tackled.

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