THE ROLES OF GOVERNMENT IN DISTRIBUTIVE TRADE

THE ROLES 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 through the establishment of distributive agencies.

Examples of such agencies are: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 roles 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 and water.

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 stabilization: The agencies through the distributive activities are able to stabilize 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.