Agricultural Marketing Case Study: Mawlyngot Tea Growers' Cooperative

This case study examines the challenges faced by the Mawlyngot Tea Growers' Cooperative as it expands its tea production from a single village to include seven others. The analysis focuses on three key challenges: collection of harvested tea, financial constraints related to scaling up, and maintaining quality assurance with organic characteristics. The solution explores options for establishing collection centers, managing capital investments and working capital, and ensuring the quality of organic tea production. The study emphasizes the importance of strategic planning, financial management, and quality control to ensure the sustainable growth and success of the cooperative. The analysis provides recommendations for addressing these challenges, aiming for a win-win situation for both the farmers and the cooperative, while maintaining the brand equity of Urlong tea.

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Challenge 1: collection
As the number of villages increased and the number of farmer members grew, collecting
the harvested tea would become costlier and less feasible. Should they open a collection
centre in each village where farmers could bring their tea and receive payments, ask the
villagers to sell their produce at the MTG production centre, or hire an agent to do the
procurement?
Solution.
Agricultural sector involve many activities that have been applied by developing and developed
countries to generate revenue. A lot of gross domestic products in these countries depend highly
on agricultural practices. Farming of cash crops such as tea and coffee rank on top of most
reliable farm produce (Saloner, 2009). I that connection, a lot of people will be willing to engage
in this particular farming activities so as to generate maximum profits. From the report, the initial
village to carry out growing of tea was Mawlyngot. This village involved few individuals who
managed to grow tea in small scale. The process of collecting harvested tea from such low
production would not be challenging since the process is smooth and efficient (Thomas, 2009).
However, the return generated from small scale tea production is equally low. There was a need
to initiate a program to venture tea farming to other villages. This action made the number of
villages to increase as well as increase in the number of farmers who practiced tea farming.
To any business activity to undergo growth and development, there is a need to plan on how to
facilitate the whole process. This will require innovations in various fields such as product
innovation, market innovation and process innovation (Roll, 2015). It is also important to
consider different types of resources such as capital investment, infrastructure, instrument and
machinery along with skilled human resources. All these factors will play a significant role in
initiating the process of growth and development. The process of growing tea involves several
steps so as to process the final product. In that case, the process is likely to become costly and
less feasible if the number of villages involved in tea growing increase without increasing the
resources to cater for such changes (Puttee, Vitale & Laing, 2011). As the number of farmers
growing tea increase, it is also important to reconsider infrastructure so as to avoid challenges of
shifting from small scale production to large scale production.

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Mawlyngot’s Tea Growers’ Cooperative can implement several options so as to incorporate
changes brought by increase in the number of villages practicing tea growing activities as well as
increase in farmers growing tea. These options are to be utilised so as to prevent straining of
resources in tea collection process. This will make the process feasible and in return increase
revenue collection.
Construction of collection centre in each village.
There is a need to bring services close to the community so as to enhance smooth and effective
tea collection. In management sector, the process is referred as devolution (Prasch, 2008).
Typically, devolution refers to a process of diversifying resources from the main terminal to
other smaller organs so as to meet the requirements of the community mote easily and
effectively. This implies that each village will have a special tea collection unit that will later be
distributed to the main collection centre. Setting a collection centre in each village will result to a
number of benefits to the farmers and Mawlyngot’s Tea Growers’ Cooperative. These benefits
will reduce operation costs in tea collection and promote collective responsibility in the entire
process (Peng, 2013). The benefit of setting tea collection centre in each village can be
highlighted as follows:
1. The process of tea collection in each village will be smooth and effective as compared to
a single tea collection centre for the seven villages.
2. The collection centre in each village will reduces cases of delay in tea collection. Tea is a
far produce that require close management especially on time of collection. Exposing
harvested tea to too much time without proper management will result to damage of tea
(McGregor, 2012). The weight of fresh tea is different from tea that have been harvested
few days ago. Payment of harvested tea is payable on weight. Thus, it is very important
to collect tea immediately the process of harvesting is done. Failure to do that may result
to huge losses to both the farmers and Mawlyngot’s Tea Growers’ Cooperative. If
collection is done in the most appropriate time, then the process will be less costly and
more feasible.
3. Setting up a collection centre in each village will enhance a sense of ownership by
farmers in each village, in that case, employment opportunities will be created across all
the seven villages. This will as well encourage other people involved in other activities to

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join tea farming. In that case, more tea production will be promoted. In the long run
Mawlyngot’s Tea Growers’ Cooperative will opt to enlarge tea collection centre in these
villages.
4. Setting a tea collection centre in each village will enhance reliable and effective form of
payment on harvested tea (Mackey, 2007). In that case, the farmers will be in a position
to meet their daily expenditure such as payment of tea harvesters and purchase of farm
inputs such as fertilizers and tea colleting bags.
Selling of tea produce at the MTG production centre or hire an agent to do the
procurement.
This is another option that can be employed so as to mitigate challenges brought by increase in
the number of villages carrying tea growing as well as increase in the number of farmers. This
process will save resources associated to construction of collection centre in each village since
the farmers will be selling the harvested tea to MTG production centre directly. It can also
involve procurement of harvested tea by a sales agent. This process will be efficient since the
costs of construction of tea collection centre in each village will be surpassed. However, the
farmers will benefit in the short run since this option will be costly to the farmers. Hiring a sales
agent to procure the harvested tea can be associated to some disadvantages (Lesserre, 2012).
These disadvantages can result to unforeseeable losses. There could be delay in collecting
harvested tea from the farmers by using this option. In that can millions of kilograms will be
exposed to damage. Again, hiring a sales agent is a form of incorporating an intermediary. As a
business analyst, the chain of distribution is very important (Hughes, 2008). It will be more
costly to the farmers so hire a sales agent to procure the harvested tea in order to initiate
collection process.
My view from a business point of view is to incorporate the first option of setting a collection
centre in each village rather than selling of tea produce at the MTG production centre or hire an
agent to do the procurement. This option will benefit both the farmers and Mawlyngot’s Tea
Growers’ Cooperative in the long run. It is important to initiate a long term strategy in tea
collection so as to promote a win-win situation between the tea farmers and Mawlyngot’s Tea
Growers’ Cooperative.

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Challenge 2: financial constraints
Scaling up to incorporate seven other villages required both capital investments and
working capital. Capital expenses could be incurred if the production capacity had to be
increased. Disbursing the farmers’ procurement price required working capacity. In order
to increase the reach and positioning of Urlong, the marketing expenses would also grow.
Inventory and cash receivables could also grow as a consequence of expansion.
Solution
Financial constraint is a factor that can limit the process of growth and development if not
addressed with a lot of care and analysis of financial resources. Capital investment and working
capital are the main cornerstones to be used to mitigate financial constraint. Mawlyngot’s Tea
Growers’ Cooperative need to initiate a plan on how to generate both capital investments and
working capital. All other operating costs need to be structured so as to determine whether tea
farming in the seven villages is feasible on not. This will be determined by comparing the
liabilities incurred to assets hold by both farmers and Mawlyngot’s Tea Growers’ Cooperative.
Capital investments, working capital, capital expenses, inventory and cash receivables are items
of financial statement (Fletcher, 2012). In that case, it is very important to ensure that the asset
column is greater that liability column so as to avoid insolvency.
There are several options that be used to scale up capital investments and working capital for
seven villages undertaking tea farming. These options aim at ensuring that capital expenses are
catered for as production increase (Hitt, 2014). The options will also enhance marketing
expenses incurred as production increase. First, Mawlyngot’s Tea Growers’ Cooperative can
contribute the initial capital investment to facilitate production capacity across the seven villages.
This will be a significant breakthrough to tea growing. Mawlyngot’s Tea Growers’ Cooperative
will act as financier in that case. The farmers across the seven villages will manage to expand on
tea growing as a way of appreciating the services offered by Mawlyngot’s Tea Growers’
Cooperative. The cooperative will be able to recover the capital invested from the returns
generated by the farmers (Daft, 2015). This will increase the asset column of Mawlyngot’s Tea
Growers’ Cooperative. Once the capital investment is recovered, the farmers will be in a position

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to gain more payments on tea harvested. Probably there will be a pay rise per kilo of tea
harvested across all the villages.
Another item that need to be considered is capital expense. In any production process, expenses
are likely to increase as production capacity increase. Thus, Mawlyngot’s Tea Growers’
Cooperative need to figure out how to cater for these expenses. In that case, the best option is to
involve the government. Interference of the government in business operation especially
agricultural sector can be of great significance (Christopher, 2011). The government can provide
a lot of resources and policies to facilitate tea growing across all the seven villages. First, the
government can provide incentives to these villages in terms of farming inputs. If the
government provide these inputs in standardized costs, then a lot of resources will be saved and
can be channeled to other production units (Laing, 2013). The government can also offer skilled
farming experts so as to propel tea production in the villages.
Lastly, for marketing expenses, inventory and cash receivable, there are other options that can be
incorporated. There a number of marketing platforms can be used to increase sales volume of tea
collected as well as tea processed by Mawlyngot’s Tea Growers’ Cooperative. The cooperative
can enter into a contract with marketing platforms so as to facilitate marketing strategies.
Payments on these marketing platform can be guided by terms and conditions based on quantity
of tea sold in a given period of time. This option will cut down on unnecessary marketing
expenses. For the case of inventory and cash receivable, the cooperative need to maintain high
volume of both cash receivable and inventory (Chopra, 2012). These two items are in the asset
column. In that case, inventory will be able to meet any anticipated demand in the market. Once
cash receivable are recovered, the farmers will benefits from bonuses and other subsequent mini-
bonuses.

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Challenge 3: quality Assurance with organic characteristics
Maintaining the quality of tea and the brand equity of Urlong would be another challenge.
In the initial period of scaling up, managing the quality of organic farming required
additional items like technical resources and labour. How Nongspung would ensure quality
remained another challenge.
Solution
Quality of any product at small scale production is usually high due to few formalities involved
in production process. For case of tea processing, the quality of tea processed by Mawlyngot’s
Tea Growers’ Cooperative satisfied quality assurance. This was based on the fact that the scale
of tea production involved a single village with few farmers involved (Cachon, 2012). However,
incorporating other seven villages in tea production changes the processing process in term of
quality. Each village is likely to harvest a unique quality different from other villages. If a
standard measure in quality of tea is not initiated in the most appropriate time, then the quality of
tea released to the market will be compromised. This may result to adverse and negative results
in the entire processing unit.
There are several options that can be applied to maintain the quality of tea as well as maintain the
brand equity of Urlong. First, there is a net to set a standard quality that will be accepted from
harvesting process by farmers (Burton, 2015). The quality of tea will start from harvesting
process by farmers. If a standard quality of tea is set from harvesting process, the all the villages
will be able to produce similar quality that will be integrated in Mawlyngot’s Tea Growers’
Cooperative production centre. There should be polices and measures to be employed to all
collection centres so mas to prevent any iota of compromising the quality of tea.
Another issue that can affect quality of tea produced is use of chemicals in production process as
well as application of chemicals in tea farms. High quality tea need to be organic in nature. This
implies that, mechanisms need to be initiate to maintain organic tea in the market. This is
achievable by increasing the number of workers who are skilled in organic farming (Brazier,
2014). The government offer training on organic farming. Each village need to provide experts
that can undergo training on organic farming. These experts will then assist the farmers across all
the villages on how to maintain quality organic tea farming.

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Mawlyngot’s Tea Growers’ Cooperative need to set rules and regulation on patent so as to
inhibit third parties who would venture the market to take advantage of growing demand of tea
products in order to compromise quality. Technical resources are also very important in
marinating the quality of tea and equity of Urlong. This can be done through intensive research
on agricultural sector. There should be a lot of research so as to innovate of tea production. This
can open channels on new brands of tea that can be introduced to farmers and to the market.
Research also indicate the process of upgrading tea through agricultural engineering. The use of
hybrid vigor can be applied to improve the quality of tea. The use of modern technology is also
applicable in maintain quality tea which is organic in nature as long as all the recommendations
on organic maintenance are clearly spelt out in the technology under consideration (Bragg,
2015). These options can be used to maintain quality of tea and equity of Urlong across all the
seven villages.

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