Many sellers, a few buyers
By the 1970s Salem had hundreds of small sago and starch units. Each sold on its own to a handful of traders, who set the price. A unit that needed cash to pay tapioca farmers had little choice but to accept it.
An auction floor of their own
In 1981 the makers formed the Salem Starch and Sago Manufacturers’ Service Industrial Co-operative Society, SAGOSERVE. It began business on 27 February 1982. Members could bring their sago to its auction, get a price set by competing bids, and pay a lower rate of sales tax.
An auction does not raise prices by magic. It replaces one trader’s offer with many, and that is usually enough.
An auction replaces one trader’s offer with many, and that is usually enough.
Bigger together
By 1993, 649 of India’s 852 sago units were in Salem district. In 2001-02 SAGOSERVE sold a record 24.41 lakh bags. Today more than 80% of India’s sago comes from the Salem region, and most of it is marketed through the society.
It applied for and now holds the GI tag for Salem sago, and in February 2026 it sent the first GI-tagged consignment abroad, to Canada.
Points for a finance reader
- Pool your selling, keep your factory. Each member still runs its own unit. Only the selling is shared.
- Competition among buyers sets a fairer price. Many bidders in one room beat one trader at the gate.
- A shared body can do what members cannot. GI registration and exports need scale. The co-operative had it.