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Group Title: Bulletin - Florida Department of Agriculture ; no. 92
Title: Cooperative agriculture
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Permanent Link: http://ufdc.ufl.edu/UF00002904/00001
 Material Information
Title: Cooperative agriculture
Series Title: <Bulletin> New Series
Alternate Title: Co-operative agriculture in Florida
Physical Description: 93 p. : ; 23 cm.
Language: English
Creator: Federal Writers' Project of the Work Projects Administration for the State of Florida
Publisher: Florida Dept. of Agriculture
Place of Publication: Tallahassee Fla
Publication Date: <1941>
 Subjects
Subject: Agriculture, Cooperative -- Florida   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
non-fiction   ( marcgt )
 Notes
General Note: "Compiled by Federal Writer's Project of Florida"--P. 3
General Note: "August, 1941."
General Note: "Reprint."
Funding: Bulletin (Florida. Dept. of Agriculture) ;
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Bibliographic ID: UF00002904
Volume ID: VID00001
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oclc - 41559906
notis - AJQ0085
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Table of Contents
    Historic note
        Section
    Front Cover
        Page 4
    Title Page
        Page 5
    Table of Contents
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    Main
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Full Text





HISTORIC NOTE


The publications in this collection do
not reflect current scientific knowledge
or recommendations. These texts
represent the historic publishing
record of the Institute for Food and
Agricultural Sciences and should be
used only to trace the historic work of
the Institute and its staff. Current IFAS
research may be found on the
Electronic Data Information Source
(EDIS)

site maintained by the Florida
Cooperative Extension Service.






Copyright 2005, Board of Trustees, University
of Florida





N. 92 N

Cooperati\v


ASgric


\XhCkK I


I~ ILirhIl \J'.t


I .. K.r \. \'
! '. \ I -. I .


uLI lure






Published by
Florida Department of Agriculture
NATHAN MAYO. Commissioner
Tallahasse. Florida














August, 1941
Reprint














Compiled by
Federal Writer's Pro)ect of Florida







Table of Contents


Coop iatla Az n iculturi 7
ThlS Farrrtr Sniare f the Consumt r's Dollar 12
Actnie F.rmr r Coopein atil Assciaillons in Flol id 14
Cl;iaficat'ln of Colperatllil Associ.iltion in Floiid. 15
C'ozdinatvd Units 30-34
Why Failur'' 35
Production Clnt[iol ,37
Cooperaltt Purchasin:g if Farm Supplihe 39
Consumer'.. C(.op rail\ e 41
Food Chain C ooperation 42
Gtnerai-l eI.silation Al'ictigl Agricultural Coopeliation 44
Reminded] 46
Conoperatni t Flaher 48
What Other Sti.e Air DIlng 51
Tablr-Cooiipr.ait s Alliht.dtd a ith CIhallenget Cirairn and
Butter Asso\ilatoln 54
Volurme of Sat"., if Specified Giain Made by C"opt.itt'
Association 55
Di.I toI Dioor SuI ey Shiwn Progre-sa f Co-Ops 56
Marketing 57
Specialty Clops 58
Purcllasing Cooprrative 51)
Manuf.lctut ing 60
Farm Sir' ic 61
Progr, s in Education 61
MemLhI'r Capital 63
Patronnage Dividends li:
Co,, perativt Marketing
Can Coopsiatnle Ma.rketing Do It All" 65
It- Posibilities and Impnos.-lbllltii 68
Sirutlurin i lf th Chail lne Muarketing Systlir 69
Some Things A CoopeIratiVv Cannot Do 70
Things A Coolalp tive Can Do 70
Oi galllin F.ainru Fir Bursines 73
CorporMil Business 75
Non-Coioplrat'l c Coi pi actions 77
Coopcrativ t Corploraltions 78
Coipying tiht EcolnOlmle of Bib Bniline(,s 79
Cooperation FIn Varinou PuIposes el
Rural Crdil in Foreign Countries 8]
Inrermtdi .at Cred t FII tlh' Farmtr 84-'10
The Agi iultuial Partnerrhip )I
Economic I)tDm lllracy In Tihe Control Associations )1i
Live Stock Co-Ops Began Big Business in 1923 92
Ohio Equitl 93







Cooperative Agriculture

Cooperative agriculture is an index of our times. It is
no longer an experiment, but a major part of the great
swing of the general cooperative movement of recent years.

So significant has the cooperative method become. that
it has been asked if it is generally adaptable to all commer-
cial activities of human society. Will it eventually displace
practically all private or individual business? Will the co-
operative gradually fuse all interests of buyer and seller?
Cooperatives have been developed to include practically
every phase of business enterprise.

In any event, cooperative agriculture seems an absolute
necessity if the time-honored occupation of tilling the soil
is to regain and maintain its status as a profitable endeavor.
The necessity of meeting present trends in the capitalist
economy does not lend itself to argument, it is a demand
that must be met, as evidenced by the establishment of
government crop control

Agricultural partnership in its present development is
the most important change that has taken place in the farm
situation over a long period. Between 1932 and 1934, the
farmers of the United States organized collectively to deal
with their collective interests upon a broader scale than
ever before.

The growing season of 1933-34 saw 73', of the total
cotton acreage, 77', of the total wheat acreage, 95', of the
total tobacco acreage, and 75M,; of the Nation's hogs covered
by contracts with the Agricultural Adjustment Adminis-
tration

The significant point where cooperative agriculture de-
parts from traditional methods, lies in the farmer's recogni-
tion that he must think in terms of national as well as





DEPARTMENT OF AGRICULTURE


individual production. The definition of parity price as a
relation between city-made and farm-grown commodities,
emphasizes how definitely agricultural and non-agricul-
tural pursuits inter-weave to make up the American
economic fabric. The sense of community has so widened
the farmer's horizon, that he has become accustomed to
assist in the formulation of national policies.

The position of the farmer today is one of our biggest
problems. For successful production, he must receive prices
for his products commensurate with those the manufacturer
charges for his products. Government figures reveal that,
from March 1937 to March 1938. farm prices dropped about
30',, while the price drop on a wide range of manufactured
goods the farmer had to have was less than 6, ; reducing
the purchasing power of farm products approximately one-
fourth.

Agriculture is more essential to our comfort, happiness
and welfare than any of the primary industries There are
more than 6.000.000 farmers in the United States. represent-
ing approximately one eighth of the Nation's voters. With
the average farmer's family comprised of five persons,
almost a quarter of the country's population live on farms.
The maintenance of such a vital factor as the Nation's pros-
penrty depends upon the success of agriculture The farmer
must receive prices for his products in just proportion to
what the manufacturer charges for his.

Farmers' purchasing and marketing associations are
but part of the equipment of the individual production units.
The farmer, alone, rarely develops an effective purchasing
and marketing technique, but he can develop it by cooperat-
ing with other farmers. What marketing or purchasing
service he can use profitably he cannot afford to be without.
The farm as a producing unit faces purchasing and market-
ing problems that must be handled effectively to obtain
full returns for the producer. However, as purchasing and
sales agencies, cooperatives must be more than farmer-





COOPERATIVE AGRICULTURE


owned brokers to negotiate purchliases aind sales. They must
return real service and be so valuable that they are worth
a considerably higher cost.

Cooperative agriculture is today a practical formula
by which the individual farmer, through marketing and
purchasing, can tuin his products into more profitable
channels Cooperative marketing of farm products and
purchasing of supplies represent hundreds of millions of
dollars annually. The cooperative credit system, under the
supervision of the Farm Credit Administration, embraces
approximately 1.0O0.000 voting farmer-stockholders. That
American agriculture is committed to the policy of coopera-
tive development is indicated not only by this tremendous
business and membership but also because the training of
future farm leaders in our agricultural colleges includes the
study of sound cooperative practices.

According to records, the iirst attempt in the United
States to market collectively was by a group ol dairy
farmers in 1810. Because of difficulties and opposition the
movement grew slowly until the depression subsequent to
the World War. During this period the farmer's Ilcome
shrank tragically. Although his lands and products had
depreciated in value, those things he purchased failed to
depreciate in proportion. The situation became critical.
Both State and Federal governments found it necessary to
devise sympathetic cooperation for an economic rehabilita-
lion of agricultural stability However, it was not until !!21
that the cooperative law movement received any real
impetus At present, many governmental agencies. State
and Federal, have been created to help and foster the
growth of cooperatives.

Through the Farm Credit Administration, the Federal
Government is putting much emphasis on the coopcra.i:iv
movement to help solve the farm problem. By the Farm
Credit Acts of 1933 and 1935 the Administiation was
authorized to permit banks for cooperatives to make loans





DEPARTMENT OF AGRICULTURE


to farmer cooperative-purchasing associations. Also through
the Farm Credit Admmnstration. cooperative farm credit
institutions are filling farmers' credit needs from coast to
coast. These agencies form a complete and flexible system
that provides long-term mortgage loans to help farmers
purchase farms or ranches, or to refinance their debts. They
provide short-term operating loans to carry on all types of
livestock operations, to purchase equipment, repair and
alter buildings. and meet a variety of other farm expenses.
And when groups oIf farmers buy supplies or sell their pro-
ducts through cooperatives, their associations also can
obtain the credit they need cooperatively

About 1,000,000 farmers and stockmen have loans from
these cooperative credit institutions amounting to more
than S.000000.000, and approximately 1.400 of their co-
uperatn(e have loans totalling SSO.000.O00
Farmers obtain long-term farm mortgage loans from
their local national farm loun) associations, and purchasing,
marketing, and business service associations borrow from
the banks for cooperatives.

During the past several years the Farm Credit Admlnis-
ratiion's big task has been refinancing existing farm debts.
A major problem has been that of assisting young and
middle-aged men to become owners of the farms they wish
to operate Members of cooperative production credit
associlttions have found the following credit advantages:

1. Substantial savings in paying cash for feed, seed.
fertilier. livestock and machinery

2. Maturities Iare arranged for the tlnll or times when
the fa mer will have funds from the sale of crops. milk. or
Livestock with which to pay.

3. Interest at the rate of 5,, is charged only on the
actual ailmounll and for the exac time outstanding.


I Endorsements are not required.





COOPERATIVE AGRICULTURE


5. Borrowers become stockholders and as such have
a voice in the management of their association.

6. Established and satisfactory credit arrangements
with a permanent organization making short-term loans to
agriculture, bring a feeling of security to the farmer.

In spite of the initial difficulties confronting the farmer-
cooperative movement in this country, the sales of farm
commodities sold through cooperative associations during
the marketing season of 1936 aggregated nearly $2.000,000.-
000 and the purchasing of farm supplies by cooperatives
engaged in that activity amounted to S250.000.000 Over
12,000 marketing and purchasing associations have a mem-
bership of 2,000,000 farmers

The figures in above paragraph by W. I. Myers.
governor of the Farm Credit Administration, as published
in NEWS FOR FARMER COOPERATIVES, Oct., 1936.

Coopetative marketing and consumer associations have
existed in one form or another in England and Europe for
centuries Abroad, the International Cooperative Alliance
comprises 105,000 cooperative societies in 39 countries, with
an estimated membership of 90.00.000 and with an annual
cooperative trade of approximately S20.000000.000

AgricLltural cooperatives in this country are of many
different kinds, embracing a considerable variety of func-
tions The majority ol "local" cooperatives are organized
for marketing. or purchasing. or both. MIost of them work
on the same general plan





DEPARTMENT OF AGRICULTURE


The Farmer's Share of the

Consumer's Food Dollar

When food prices rise noticeably, consumers often
wonder what percentage of the increased prices is received
by the farmers.

Farmers look at the retail prices paid by consumers in
the cities, then at the prices they are being paid for their
products, and naturally wonder what becomes of the
difference between the two figures.

These dual questions have been acute while the prices
of food were rising during the past three years. In attempt-
ing to answer them, the best available figures have been
brought together from various sources. The result is a more
complete answer to the consumers than to the farmers,
although in neither case can the answer be considered en-
tirely adequate: their implications, however, are significant.

The annual food budget of the average city working-
mans family is used as a representative example. Fifty-
eight foods are considered. The money spent for these 58
foods is about three-fourths of the amount spent for all
foods by the average city workingman's family. This family
spent $331 in 1935 for these 58 foods as compared with $264
spent in 1933, when the depression low point was reached in
prices paid for foods.

What did the farmers receive for these foods during
those two years? In 1935 they received $138 of the retail
price, and in 1933 they received $92. These figures are
exclusive of rental and benefit payments that were made to
farmers during those ?ears

This difference between the price paid by the con-
sumer and the amount received by the farmer is the margin
!hat goes to processors, transportation agencies, and dis-





COOPERATIVE AGRICULTURE


tributors for carrying on their functions. This margin was
$193 in 1935. including about $11 for processing taxes, and
$172 in the low price year of 1933. including about S2 for
processing taxes The proceeds from these processing taxes
were used to increase returns to farmers though rental and
benefit payments.

These intermediate charges represent var\ ing degrees
of transportation, processing, and marketing Trucking
vegetables from market gardens to the nearest city is much
less expensive than shipping the same kinds of vegetables
from Texas to New York Practically no processing is done
on eggs and potatoes, but turning wheat into crackers is a
complicated matter Costs of city wholesale and retail
marketing also vary as between commodities, between
cities, and betwe en dealers Improvements in the efficiency
of marketing will tend to reduce these costs Real improne-
mets could result in lower prices to consumers, better
income for fai melrs alnd greater profits to those pIocessors
and dealers whose efliciencv is increased most

Between 1915 and 1920 the margin between farmers
and consumer's prices nearlly doubled Duting the period
between 1920 and 1935, at no timn did prices Iall so low is
in 1932 and 1935 In 1933 the 58 kinds i'f food cost the
consumers ml(re th.a in the pite-wa periodl whereas the
farmers lt.leild stbhtantlatlIk lio. NI pritduting them -
(Leaflet No. 123. U S D A.)





DEPARTMENT OF AGRICULTURE


ACTIVE FARMERS' COOPERATIVE ASSOCIATIONS
IN FLORIDA

(Sept. 30. 1937)
Number
Marketing 51
Marketing. Purchasing 32
Marketing. Farm Business Service 19
Marketing. Purchasing, Farm Business Service 15
Educational 14
Representation 11
Educational. Legislative 6
Credit 6
Marketing, Educational 5
Purchasing 5
Educational. Purchasing 4
Farm Business Service 3
Educational, Marketing, Purchasing 3
Political, Educational 1
Purchasing. Marketing, Educational. Social 1
Retail Market 1
Transportation Problems 1
Educational, Public Relations 1
Bargaining. Educational 1
Educational. Cattle Theft Suppression 1
Jack Service 1
Processing 1
Marketing, Ginning 1
Crate Manufacturing 1
Operating Groves and Packing Houses 1
Purchasing. Educational, Farm Business Service 1
Marketing, Farm Business Service, Credit I
Marketing, Purchasing, Processing, Farm Business
Service 1

Total 189

In addition to the above, there were 73 coordinated units
in the State as of Sept., 1937.





COOPERATIVE AGRICULTURE


Classification of Cooperative

Associations in Florida

Cooperative associations ale local or regional as to type-
The local associations are further classified as to independ-
ent or federated. Independent locals are associations
serving a distinct locality and doing business usually at one
station Federated locals differ from independent locals in
that the, are affiliated with other locals for the purpose of
uniting then efforts in selling or engaging in other actl\ 'tius.

Regional associations are federated or centialized.
Federated associations ale central agencies formed of
groups of locals for the purpose of performing certain
specialized services Centralized associations often perform
similar services to the federated type. but the control of the
business rests with the central rather than with the locals
as in the case of federated associations, and the contract
runs directly between the association and the grower rather
than through a local association. In the case of the central-
ized association, the property rights are vested in the central
organization, whereas in the federated type all local prop-
erty is usually owned by the local organizations (Bulletin
No. 245. Agricultural Experiment Station. Gainesville, Fla.,
April 1932.)

In the following list the cooperative associations were
classified as to the principal products handled and the nature
of services rendered. This list shows considerable change
in the nature of organizations and products handled since
a few years back. The largest group of associations is
organized for handling citrus fruits, with the group for
handling truck crops next in importance and ranking about
the same, in number of associations, as the educational
group Associations handling livestock and livestock pro-
ducts follow.






DEPARTMENT OF AGRICULTURE


Note: This list of active farmers' cooperative associations
in Florida. with classifications and commodities handled,
furnished by The University of Florida Agricultural
Experiment Station, Gainesville, in cooperation with the
Division of Resident Teaching, College of Agriculture,
University of Florida; by Marvin A. Brooker and H. G.
Hamilton. Published Nov., 1937.
(Compiled between March 13 and September 30, 1937 in
cooperation with The Columbia Bank for Cooperatives,
Farm Credit Administration, Columbia, South Carolina).

Alachua County
Gainesville Farmers' Association, Gainesville, Market-
ing. cucumbers, peppers.
LaCrosse Agricultural Credit Corporation. LaCrosse,
Credit. potatoes.
LaCrosse Potato Growers' Association, LaCrosse, Mar-
keting and purchasing, potatoes, fertilizer, seed.

Bay County
Bay County Poultrymen's Association, Panama City,
Marketing. eggs.
East Peninsula Cattlemen's Association. Panama City,
Educational and legislative.

Bradford County
Bradford County Sea Island Cotton Growers' Assocla-
tion, Starke, Marketing, Sea Island cotton.

Brevard County
Cocoa-Merritts Island Citrus Association, Cocoa, Mar-
keting and purchasing, Citrus.
Mims Citrus Growers' Association, Mims, Marketing
and farm business service, citrus





COOPERATIVE AGRICULTURE !7

Broward County

Bi~odad Cooperative Association. I ncoiporated. F'ort
Lauderdale Marketing and purchasing. Vegetables
Everglades Orange Growers' Association, Hollywood,
Marketing, citrus.

Citrus County

Citrus County Cattlemen's Association, Inverness,
Educational and purchasing.

Dade County

Dade County Growers' Cooperative MaIrketing Asbocia-
tion. Miami. Farm business service. Rent stalls.
Dairy Ownes' Association of Dade and Browald
counties. Miami. Educational and public relations
Florida Avocado and Persian Lime iGroweis' Associa-
tion. Naranja. Marketing. Avocados. limes
Florida State Poultiv Producers' Association. Lemon
City Station. Educational, marketing and purchasing
Florida East Coast Growers' Association, Miami,
Marketing and purchasing. Tomatoes
Goulds Fruit and Vegetable Growers' Association.
Goulds. Marketing. Tomatoes.
Miami Iome Milk Producers' Association. Miami. Mar-
keting. Milk
Miami Poultry Pioducers' Assoclatlion, Leman City
Station. Educational.
Producer Dairymen's Association, Lemon City Station.
Bargaining and Educational.
Redland Citrus Growers' Association, Homestead. Mal-
keting and purchasing. Citrus.
Royal Palm Truckers' Association. Homestead. Market-
ing. Tomatoes





18 DEPARTMENT OF AGRICULTURE

Silver Palm Citrus Growers' Association, Homestead,
Marketing. Citrus.
South Florida Potato Growers' Association, Goulds,
Marketing, Potatoes.

DeSofo County
DeSoto County Cooperative Association. Arcadia, Mar-
keting and purchasing, Vegetables, seeds.
DeSoto County Livestock Association, Arcadia, Educa-
tional.
Fort Ogden Citrus Growers' Association, Fort Ogden,
Marketing, purchasing, farm business service, Citrus,
fertilizer.

Duval County
Duval County Dairy Association, Jacksonville, Legisla-
tive, Educational.
Duval County Poultry Producers' Association, Jackson-
ville. Marketing, educational. Eggs.
Duval Farmers' Federal Credit Union, Jacksonville,
Credit.
Jacksonville Pure Milk Association. Jacksonville. Mar-
keting. Milk.

Escambla County
Barrineau Park Independent Growers' Cooperative
Association. Cantonment. Marketing and purchasing, Pota-
toes, fertilizer, seed.
Escambia Stockmen's Association, Pensacola, Educa-
tional, cattle theft suppression.
Hog Producers' Association. Pensacola. Marketing.
Hogs.
Escambia County Milk Produceis' Association. Pensa-
cola. Educational. legislative.






COOPERATIVE AGRICULTURE


TiIng-Emnpirt Corporation Pensacula, Malrkltiil, put-
clInh:ll w lt'rm itiflessnh Sc Vict Tlung oil
U'tlted G(;r,.r rs A.S.cation if EFscambia County,
Cnt ,Iiit nt %.it keting .d puichatig. Pitatoes. fertilizer.


Flagler County

FIigle'r Couint Gruo ers' Asocl.ition. Bunnell. Market-
ingI ,I]l purch' sing, Potatoes, fettiliztir, sed, conIll ers,
dust
G(ilthrtLt C'untt Cil. Ir.ilitv Jdck A.soci tln,1. Tren-
trul J.ck r(.r LC
Gulf Cooeitl'a'e Maii ktling Association, Trinton,
M.II klning. Hlg

Gulf County

"Wt'wbitht'hka 1 Fliori i Ci'i)f"rti\v' A'lcihltlann, \V'twa-
hitchkia Miarkh
Hamilton County

H<-lll \ ill, Coope)tati\' Ci, ining Pla.nt, Bellheville, Pro-
c'sill., V 'gt'tables

Hard.e County
A....ciataIl (Ginwei,. In<,o[[p)ialted. Wau.chul.i. Market-
illg ;ill [tilpu liSiil Toal's(lllll ciL .ts, I0l'1iliz r, crlll .s.
II. d C unti.' LIvnt ,twk PriKcut'' A.1 tih A*iiu-


Hernando County

i>H .k-i \llt Cl iu> (rlin ..' A-"i-"te I IIn B k \:lr.

frl lhli/ I
HI)l"kIh\ill Sea: Isl.and Cotton rwiis' Asciatitln,
BI,-,.\ ;i n kf :run S<., IWiiA Cutt.i






20 DEPARTMENT OF AGRICULTURE

Highland@ County
Avon Park Citrus Growers' Association. Avon Park.
Marketing and purchasing. Citrus.

Highlands Crate Company, Avon Park, Crate Manu-
facture, Citrus crates.

Highlands Cooperative Association. Sebring. Purchas-
ing. Fertilizer.

Higllands County Cattlemen's Association, Sebriiig,
Educational.

Sebring Fruit Growers' Association. Sebrmg. Market-
ing, farm business service, Citrus.

Hillsborough County
Deciduous Salts Company. Incorporated. Tampa, Mar-
keting, Deciduous fruits.

Exchange Suppvl Company. Tampa. Purchasing, Paper
wraps, no kuts. ,trapping. nails. etc

FlIrida Ciitru Exchange, Tampa. Marketing. Citrus.

Grlowers' Loin and Guaranty Company, Tampa, Credit.
Guaranty Operating Company. Tampa. Operating
groves and packing houses. Citrus

IHillsborough Citrus Growers' Associaltion, Tampa, Mar-
keting. Citrus.
Hillsborough County Cattlemen's Association. L.thia.
Educational.

Hillsborough County Poultry and Egg Producers' As-
sociation. Tampa. Educational

Plant City Cooperative Association. Plant Cit. Mar-
keting and purchasing, Strawberries, vegetables, cups, etc.

Tampa Better Milk Producers' Cooperative. Iec.
Tampa. Marketing. Milk.





COOPERATIVE AGRICULTURE 21

Indian River County
Indian River Associates. Incorporated, Vero Beach,
Marketing. Citrus
Oslo Citrus Growers' Association, Vero Beach, Market-
ing, Citrus
Vero-Indian River Producers' Association, Vero Beach,
Marketing and purchasing, Citrus

Jackson County
Florida Cooperative Syrup Association. Grand Ridge.
Marketing. Syrup
Jackson County Farmers' Cooperative Association,
Greenwood. Marketing and purchasing. Hogs. fertilizer.
Jackson County Hog Growers' Cooperative Association,
Marianna, Marketing, Hogs.
Jackson County Livestock Association. Marianna, Edu-
cational, legislative
Round Lake Satsuma Packing House Company. Round
Lake. Marketing, Satsuma oranges

Lafayette County
Lafayette County Sea Island Cotton Growers' Associa-
tion, Mayo, Marketing, Sea Island Cotton.

Lake County
Clermont Citrus Growers' Association, Clermont, Mar-
keting, farm business service, Citrus
Florida Grape Groweis' Association, Tavares, Educa-
tional, purchasing.
Florida Plumosus Growers' Cooperative Association,
Leesburg, Marketing, Ferns.
Lake County Citrus Sub-Exchange, Tavares, Represen-
tation, Citrus






DEPARTMENT OF AGRICULTURE


Lake County Horticultural Association, Tavares, Pur-
chasing. educational, farm business service, Fertilizer,
insecticides.
Lake Region Packing Association, Tavares. Marketing,
purchasing, farm business service, Citrus, fertilizer.
Leesburg Truckers' Association, Leesburg, Marketing
and purchasing. Cabbage, crates.
Mount Dora Growers' Cooperative, Mount Dora, Mar-
keting, farm business service, Citrus.
Umatilla Citrus Growers' Association, Umatilla. Mar-
keting. farm business service, Citrus.

Lee County
Owanita Citrus Growers' Association. Owanita. Mar-
keting, purchasing, farm business service, Citrus.
West Coast Citrus Sub-Exchange. Alva, Representation,
Citrus.

Leon County
Florida Farmers' Cooperative Association, Tallahassee,
Educational, marketing, purchasing.
Leon County Agricultural Bureau, Tallahassee. Mar-
keting and purchasing, Agricultural products, fertilizer.
Leon County Dairymen's Association, Tallahassee,
Political, Educational
Leon County Negro Farmers' Council. Tallahassee, Pur-
chasing. marketing, educational, social, Cotton seed, fertil-
izer, sweet potatoes, turkeys.
Miccosukee Peanut Growers' Association, Miccosukee,
Farm business service, Peanuts.

Manatee County
Domino Citrus Association. Bradenton. Marketing, farm
business service, Citrus, fertilizer, spray.






COOPERATIVE AGRICULTURE 23


Florida West Coast Poultry Association, Incorporated,
Bradenton. Marketing and purchasing. Eggs
Manatee Citrus Growels' Association. Manatee. Mar-
keting. Citrlus
Manatee County Agricultural Credit Corporation, Bra-
denton. Credit.
Manatee County Growers' Association, Bradenton, Mar-
keting and purchasing, Celerl. tomatoes, peppers., tltilizer,
seed.
Teira Cela Citius Growenrs' Association. Terla Ceia.
Marketing and purchasing. Citrus. ggplant, peppers.
fertilizer.

Marion County
Florida Tung xG loeis' Coopeiative Associatlion Ocala.
Marketing. farm business service. Tung oil
Jelosilalem Cooperiltive Hay Association, Ocala, Mar-
keting. Hay.
Retail Producer-Distributor Association. Ocala Market-
ing. Milk.

Orange County
Farmers' Marketing Association. Orlando. Retail mar-
ket. Farm produce.
Florida Grape Growers' Exchange, Orlando, Marketing,
Grapes.
Groweis' and Shippers' League of Florida. Orlando,
Transportation problems. Transportation.
Orange County Citrus Sub-Exchange, Orlando, Repre-
sentation, Citrus.
Orange County Fern Growers' Association. Zellwood,
Marketing and purchasing, Ferns.
Orange County Milk Producers' Association. Orlando,
Educational. legislative.





24 DEPARTMENT OF AGRICULTURE

Orlando Citrus Growers' Association, Orlando, Market-
ing, Citrus.
Plymouth Citrus Growers' Association, Plymouth, Mar-
keting, purchasing, farm business service, Citrus, fertilizer,
gas and oil, auto parts, etc.
Poultry Producers of Central Florida, Winter Park,
Educational.
South Lake Apopka Citrus Growers' Association, Oak-
land, Marketing, farm business service, Citrus.
Tree-Gold Cooperative Growers of Florida, Orlando,
Marketing, Citrus.
West Orange Citrus Growers' Association, Winter Gar-
den, Marketing, Citrus
Winter Garden Citrus Growers' Association, Winter
Garden, Marketing, farm business service, credit, Citrus.

Okeechobee County
Okeechobee County Cattlemen's Association, Okee-
chobee, Educational

Osceola County
Florida State Cattlemen's Association, Kissimmee, Edu-
cational.
Kissimmee Citrus Growers' Association, Kissimmee,
Marketing, purchasing, farm business service, Citrus.
Osceola County Cattlemen's Association, Kissimmee,
Educational.


Pasco County
Pasco County Cattlemen's Association, Dade City,
marketing, Educational.
Pasco Egg Sales Association, Dade City, Marketing,
Eggs





COOPERATIVE AGRICULTURE 25

Pasco County Poultry Producers' Association, Dade
City, Marketing, educational, Poultry.
Pasco Packing Association, Dade City, Marketing,
purchasing, farm business service, Citrus.


Pinellas County
Citrus City Growers' Association, Largo, Marketing,
Citrus.
Clearwater Growers' Association, Clearwater, Market-
ing, farm business service, Citrus.
Elfers Citrus Growers' Association, Elfers, Marketing,
farm business service, Citrus, fertilizer.
North Pinellas Citrus Sub-Exchange, Largo, Represen-
tation, Citrus.
Palm Harbor Citrus Growers' Association, Palm Har-
bor. Marketing, purchasing, farm business service, Citrus,
fertilizer.
Pinellas Citrus Sub-Exchange, Largo, Representation,
Citrus.
Pinellas Poultry Producers' Association, Largo, Educa-
tional.


Polk County
Adams Packing Company, Incorporated, Auburndale,
Marketing, Citrus.
Alturas-Garfield Citrus Cooperative, Bartow, Market-
ing, purchasing, farm business service, Citrus.
Auburndale Citrus Growers' Association, Auburndale,
Marketing, farm business service, Citrus.
Babson Park Citrus Growers' Association, Babson Park,
Farm business service, Citrus.
Dundee Citrus Growers' Association, Dundee, Market-
ing, Citrus.





26 DEPARTMENT OF AGRICULTURE

Eagle Lake Fruit Growers' Association, Eagle Lake,
Marketing. Citrus.
Eloise Growers, Incorporated, Winter Haven. Market-
ing, farm business service, Citrus.
Florence Citrus Growers' Association, Florence Villa,
Marketing. farm business service, Citrus.
Florida Citrus Canners' Cooperative, Lake Wales, Mar-
keting, Canning Citrus.
Florida United Citrus Growers, Incorporated, Lake
Hamilton, Educational.
Fort Meade Farmers' Cooperative Marketing Associa-
tion, Incorporated, Fort Meade, Marketing, Corn, other
vegetables.
Frostproof Citrus Growers' Association, Frostproof,
Marketing, purchasing, farm business service, Citrus, fer-
tilizer, spray.
Growers' Fertilizer Cooperative, Lake Alfred, Purchas-
ing, Fertilizer.
Haines City Citrus Growers' Association, Haines City,
Marketing, farm business service, Citrus.
Holly Hill Cooperative Citrus Association, Davenport,
Marketing, Citrus.
Holly Hill Fruit Products, Incorporated, Davenport,
Marketing, purchasing, processing, farm business service,
Citrus.
Lake Alfred Citrus Growers' Association, Lake Alfred,
Marketing, Citrus.
Lake Hamilton Citrus Cooperative, Lake Hamilton,
Marketing. Citrus.
Lake Hamilton Citrus Growers' Association, Lake Ham-
ilton, Marketing, Citrus.
Lakeland Citrus Growers' Association, Lakeland, Mar-
keting. purchasing, farm business service, Citrus.





COOPERATIVE AGRICULTURE 27

Lakeland-Highlands Cooperative Association, Highlands
City, Marketing, farm business service, Citrus.
Lake Region Citrus Sub-Exchange, Haines City, Repre-
sentation, Citrus.
Lake Wales Citrus Growers' Association, Lake Wales,
Marketing, Citrus.
Polk County Citrus Sub-Exchange, Bartow, Represen-
tation, Citrus.
Polk County Farmers' Association, Incorporated, Kath-
leen, Marketing and purchasing, Strawberries, seed,
fertilizer.
Polk Packing Association, Winter Haven, Marketing,
Citrus.
Scenic Citrus Sub-Exchange, Bartow, Representation,
Citrus.
Waverly Growers' Cooperative, Waverly, Marketing,
purchasing, farm business service, Citrus, fertilizer, gas, oil,
spray.
Winter Haven Citrus Growers' Association, Winter
Haven, Marketing, farm business service, Citrus.
Winter Haven Citrus Sub-Exchange, Winter Haven,
Representation, Citrus.
Winter Haven Cooperative Growers, Winter Haven,
Marketing, Citrus.

Putnam County
Crescent City Citrus Growers' Association, Crescent
City. Marketing, farm business service, Citrus.
Florahome Bean Grading and Marketing Association,
Florahome, Farm business service, Marketing, Beans.

Saint Johns County
Florida Planters, Incorporated, Hastings, Marketing,
purchasing, Potatoes, fertilizer, seed, containers, dust.






DEPARTMENT OF AGRICULTURE


Hastings Agricultural Credit Corporation, Hastings,
Credit.
Hastings Agricultural Supply Company, Incorporated.
Hastings, Purchasing, Fertilizer, seed potatoes, containers,
etc.
Hastings Potato Growers' Association, Hastings, Mar-
keting, purchasing, Potatoes, fertilizer, seed. containers,
dust.

Saint Lucie County
Cooperative Indian River Growers, Incorporated, Fort
Pierce, Marketing, Citrus.
Fort Pierce Growers' Association, Fort Pierce, Market-
ing, purchasing, farm business service, Citrus.
Indian River Citrus Associates, Incorporated, Fort
Pierce, Marketing and purchasing, Citrus.

Sarasota County
Palmer Farms Growers' Cooperative Association, Sara-
sota, Marketing and purchasing, Celery, fertilizer, plants,
seeds.
Sarasota County Strawberry Association, Incorporated,
Sarasota, Marketing and purchasing, Strawberries, toma-
toes, peppers, eggplant, crates, cups.

Seminole County
Chase and Company Cooperative, Sanford, Marketing,
Citrus.
Sanford Farmers' Exchange, Sanford, Marketing,
Celery.
Sanford Growers' Credit Corporation, Sanford, Credit,
Celery.
Sanford-Oviedo Truck Growers, Incorporated, Sanford,
Marketing and purchasing, Celery.





COOPERATIVE AGRICULTURE 29

Seminole County Agricultural Association, Sanford,
Educational.
Seminole Poultry Producers' Association, Sanford, Mar-
keting, Educational.
The Southern Bulb Association, Sanford, Marketing,
Bulbs.
Standard Growers' Association, Sanford, Marketing and
purchasing, Celery, mixed vegetables, containers, blue
stone, lime.
Sumter County
Oxford Hog Association, Oxford, Marketing, purchas-
ing, Hogs.
Sumter County Cattlemens Livestock Association,
Bushnell. purchasing, Educational, breeding stock.
Sumter County Sea Island Cotton Growers' Association,
Bushnell, Educational, purchasing, Sea Island Cotton, spray
and dust.

Suwannee County
Suwannee Resources, Incorporated, Live Oak, Educa-
tional.
Taylor County
Taylor County Farm and Livestock Association, Perry,
Purchasing, marketing, educational, Hogs, fertilizer.

Union County

Union County Farmers' Bureau, Lake Butler, Purchas-
ing, Fertilizer.
Volusia County
Daytona Beach Dairy Association, Daytona Beach,
Educational.
DeLand Citrus Growers' Association, DeLand, Market-
ing. Citrus.






DEPARTMENT OF AGRICULTURE


Indian River Citrus Sub-Exchange, Oak Hill, Represen-
tation, Citrus.
Oak Hill Citrus Growers' Association, Oak Hill. Mar-
keting, purchasing, farm business service, Citrus
Pierson Citrus Growers' Association, Pierson, Market-
ing, farm business service, Citrus.
Saint Johns River Citrus Sub-Exchange. DeLand. Rep-
resentation, Citrus.
Samsula Growers' Cooperative, Samsula, Marketing
and purchasing. Vegetables.
Volusia County Poultry Producers' Association, Day-
tona Beach, Educational, legislative.

Walton County
Walton County Poultry Producers' Association. De-
Funiak Springs, Marketing, purchasing, Eggs, feed.

Washington County
Washington County Swine Growers' Association. Chip-
ley, Marketing, Hogs.


COORDINATED UNITS
In addition to the active farmers' cooperative associa-
tions given above, the set-up of the nine Florida coordi-
nated units of the Production Credit Associations and the
National Farm Loan Associations of the Farm Credit
Administration is given below.

Bradenton. Florida
Bradenton Production Credit Association, Bradenton.
Arcadia National Farm Loan Association, Arcadia.
Duncan U. Fletcher National Farm Loan Association,
Palmetto.





COOPERATIVE AGRICULTURE 31


Ellenton National Farm Loan Association, Ellenton.
Limestone National Farm Loan Association. Wauchula.
Wauchula National Farm Loan Association. Wauchula.

DeFuniak Springs, Florida
DeFuniak Springs Production Credit Association. De-
Funiak Springs.
Blountstown National Faim Loan Association, Blounts-
town
Central National Farm Loan Association. DeFuniak
Springs.
Chipley National Farm Loan Association, Chiplcy.
Coldwater National Farm Loan Aswociation. Boltts
Graceville National Farm Loan Association. Graceville
Marlanna National Farm Loan Association. MAarannna.
Oak Grove National Farm Loan Association. McDavid.
Okaloosa National Farm Loan Association. Laurel Hill,
Shady Grove National Farm Loan Association, Grand
Ridge.
Westville National Farm Loan Association. Westville

Gainesville. Florida
Gainesville Production Credit Association, Gainesville.
Chachala National Farm Loan Association, Gainesville,
Gainesville National Farm Loan Association. Games-
ville.
Lake Butler National Farm Loan Association, Lake
Butler.
Lawtey National Farm Loan Association. Lawtev.
Levy County National Farm Loan Association, Bronson.
Ocala National Farm Loan Association, Ocala.
Reddick National Farm Loan Association, Reddick.





32 DEPARTMENT OF AGRICULTURE

Jacksonville, Florida

Jacksonville Production Credit Association, Jackson-
ville.
Baldwin National Farm Loan Association, Baldwin.
Hastings National Farm Loan Association, Hastings.

Pioneer National Farm Loan Association, Bunnell.
Progressive National Farm Loan Association, Jackson-
ville.
West Putnam National Farm Loan Association, Palatka.


Live Oak, Florida

Live Oak Production Credit Association, Live Oak.
Hamilton National Farm Loan Association, Jasper.
Lake City National Farm Loan Association, Lake City.
Live Oak National Farm Loan Association, Live Oak.
Suwannee National Farm Loan Association, Live Oak.
SWill be discontinued in 1938.


Miami. Florida

Miami Production Credit Association, Miami.
Davie National Farm Loan Association, Davie.

Fort Lauderdale National Farm Loan Association, Fort
Lauderdale.
Fort Pierce National Farm Loan Association, Fort
Pierce.
Little River National Farm Loan Association, Little
River.
Vero National Farm Loan Association, Vero Beach.





COOPERATIVE AGRICULTURE


Monticello. Florida

Monticello Production Credit Association, Monticello.
Gadsden National Farm Loan Association, Quincy.
Havana National Farm Loan Association, Havana.
Hixtown National Farm Loan Association, Madison.
Jefferson County National Farm Loan Association,
Monticello.
Leon County National Farm Loan Association, Talla-
hassee.
Liberty County National Farm Loan Association,
Bristol.
Perry National Farm Loan Association, Perry.
Tallahassee National Farm Loan Association, Tallahas-
see.

Plant City, Florida

Plant City Production Credit Association, Plant City.
Bartow National Farm Loan Association, Bartow
Citrus Growers National Farm Loan Association, Dade
City.
First Natoinal Farm Loan Association, Brooksville
Frostproof National Farm Loan Association, Frostproof
Highlands National Farm Loan Association, Dade City.
Lakeland National Farm Loan Association, Lakeland.
Lake Region National Farm Loan Association, Winter
Haven.
Plant City National Farm Loan Association, Plant City
Seffner National Farm Loan Association, Seffner.
Thonotosassa National Farm Loan Association, Dover.
West Coast National Farm Loan Association, Tarpon
Springs.






DEPARTMENT OF AGRICULTURE


Sanford, Florida
Sanford Production Credit Association, Sanford.
Kissimmee National Farm Loan Association, Kissim-
mee.
Leesburg National Farm Loan Association, Leesburg.
Orlando National Farm Loan Association, Orlando.
Saint Johns Citrus Growers' National Farm Loan As-
sociation, DeLand.
Samsula National Farm Loan Association, Samsula.
Seminole County National Farm Loan Association, San-
ford.
Umatilla National Farm Loan Association, Umatilla.
West Orange National Farm Loan Association, Winter
Garden.
West Volusia National Farm Loan Association, DeLand.
SWas discontinued n 193M.





COOPERATIVE AGRICULTURE 35




Why Failure?

Three hundred and seventy-four cooperative associa-
tions were organized in Florida between 1889 and 1929.
During the 1929-30 season only 190 of these associations
were active. Fifty-five associations had never been active
while 129 had once operated.
One or more of the following reasons were given as the
chief causes of failure:
1. No need for a cooperative.
2. Lack of sufficient capital.
3. Poor management.
4. Lack of cooperative spirit.
5. Lack of volume.
6. Competition.
7. Unsatisfactory Prices.
Since the mechanics of cooperative organization have
been well worked out, the problem of cooperative agricul-
ture is not HOW TO ORGANIZE but HOW TO OPERATE
SUCCESSFULLY after the cooperative group has been
formed.
One of the major requirements in any type of coopera-
tive organization is LOYALTY OF MEMBERSHIP. With-
out it the movement is doomed to failure. Money can buy
the leadership to guide the association through critical or
prosperous periods. It can set up standards of pack, super-
vise handling, lay out growing programs, and otherwise
direct operations, but only the individual member can
furnish the element of loyalty required for success.
It is evident that the paramount requirement for the
progress of the cooperative is the confidence of the indi-
vidual farmer in its objectives, and his support of the lead-






36 DEPARTMENT OF AGRICULTURE

ership selected to accomplish the undertaking. Unless a
cooperative's members feel a sense of responsibility and
ownership in their organization, it will likely be unable to
withstand a critical period.

Although cooperatives are sanctioned by laws providing
for their operation, maintenance, and control, the whole
system relies on the integrity of the persons comprising the
membership in carrying out their part of the collective
program.

Moreover, a multiplicity of cooperatives in the same
field competing for business without coordination of effect.
is i practice defeating the very purpose for which they
exist; that of meeting the law of supply and demand
through collective marketing. Such procedure not only
fails to stimulate confidence, but foments disagreement and
creates unsatisfactory marketing conditions and frequent
failures.

The officials of many cooperatives gradually allow their
organizations to get out of date. This results from failures
to make adjustments to meet changes in marketing methods
and practices and other conditions which affect operations.
The three general phases of collective agriculture that
make it desirable are:
1. Group purchase of fertilizer, seed, and general
supplies.
2. A planned system of planting so as to assure given
standards of production.
3. Established marketing channels for quality products.

In the past, the first step of the cooperative program-
the purchase of supplies, etc.-has been largely successful.
The second step, planning growing programs, has been the
weak link in the cooperative undertaking; for without
production control, the third step of marketing profitably
cannot be carried out.





COOPERATIVE AGRICULTURE


Production Control

Florida is confronted with an increasing production of
citrus, truck, poultry, dairy products, livestock and general
farm products. In its program of cooperative agriculture,
the State has a paramount problem to keep m mind. Its
major crops are largely perishable, and most of them must
be disposed of almost immediately. While advances have
been made toward better marketing conditions by sound
organization and intelligent direction, it is increasingly
imperative that planned production be made a feature of the
cooperative program. Staples such as corn, wheat, tobacco,
cotton, etc., lend themselves to "carry overs," but the
proportion of these crops grown in Florida is relatively
minor.
In many countries where control of production is
undertaken it is imposed from above. Here. in the United
States. production is being adjusted by democratic proce
dure, and, in the program of production control, cooperative
action is the leading factor. That the farmer himself is
offered the opportunity to reorganize his part m the
adjustment of production, is a part related to the whole,
and that recognition is of vital importance to success
"One of the tragedies of agricultural life in our
country," says Mr Nathan Mayo, Florida Commissioner of
Agriculture, is that too often the very agency that has
functioned profitably with a crop of normal size, goes down
in defeat because, not having production control, acreage is
increased to such an extent that crops have to be sold at
low prices. There we have the sad spectacle of farm
organizations defeating their own ends and thwarting the
very purpose for which they were founded We must con-
sider the fact that one invariable result of successful
collective selling by farmers has always been a marked
increase in production. Cooperatives that direct the mar-
keting of 75,4 or more of any crop, can, and always have,






DEPARTMENT OF AGRICULTURE


under normal conditions, sold that crop at a price satis-
factory to themselves. But no cooperative yet brought forth
has mastered the vexing problem of EXCESS or SURPLUS
"What can be done about it? The thing that MUST be
done, if cooperative marketing shall function, is to CON-
TROL NOT ONLY MARKETING, BUT AHEAD OF IT,
CONTROL PRODUCTION.
"Whether this can readily be done is the BIG QUES-
TION LOOMING UP BEFORE COOPERATIVES. It will
have to be solved or all our efforts to help ourselves through
organizations will in the end fail. The facts must be faced.
The cooperatives we are to have in our state will give us
some IMMEDIATE RELIEF and will prove a blessing, but
unless our growers by common consent can control produc-
tion, they will not be able to control prices. COOPERA-
TIVE MARKETING CANNOT SUCCESSFULLY HANDLE
A SURPLUS SO LARGE AS TO EXCEED DEMAND."
Never before has proper management in this respect
been so urgent or fundamental to far products. Agricul-
tural competitive conditions demand ever increasing
competence.

FACTORS OF SUCCESSFUL OPERATION
A cooperative faces its critical period when it begins
to operate. There are a number of salient factors impera-
tive to the success of any cooperative association, the lack
of one or more of which too often spelled defeat:
1-Its existence must be justified by a DEFINITE need.
2-The volume of business must be LARGE enough.
3-The management must be capable and efficient.
4-The structure must be adequate and flexible.
5-The business policies must be sound.
6-The association must be supported and controlled
by its members.
7-Too early or too rapid expansion must be avoided.





COOPERATIVE AGRICULTURE 39




Cooperative Purchasing of

Farm Supplies
Cost of supplies is a farm problem From an economic
point of view, farmers are comparable to manufacturers
and like manufacturers, are concerned with keeping down
costs of production. The more value a farmer receives for
each dollar invested in his supplies, the lower is his cost of
production. Farmers are entitled to buy the materials for
their industry at wholesale prices as much as a shipbuilder
or a factory proprietor. Profits lapse when farmers buy at
retail prices and sell at wholesale prices. The cooperative
purchasing form of business organization provides a
method by which farmers, through collective purchase, are
able to reduce the cost of basic supplies.
By setting up their own purchasing organizations,
farmers are generally able to obtain trade discounts and
other price considerations customarily granted only to
retail agencies. Carrying the method still further and
combining the purchases of local associations, it is possible
for farmers to effect additional savings by obtaining basic
supplies direct from manufacturers or primary producers
for processing in cooperatives plants. Purchasing coopera-
tives are in many instances carried to an extent where such
associations engage in extensive manufacturing operations.
Cooperative farm supply associations are interested in
enabling farmers to purchase supplies at the lowest possible
price. Prices paid by farmers too often must cover ineffici-
ency in distribution. Many existing agencies handle an
insufficient volume of business for efficient operation. Costs
are often unnecessarily high because of competitive sales
expense, carrying charges on unneeded, unstandardized,
or slow-moving merchandise, excessive delivery service;
poor credit and collection policies, and inadequate book-
keeping.






DEPARTMENT OF AGRICULTURE


A well-managed cooperative purchasing association
may eliminate or reduce many of these costs and bring
competitive pressure to bear on prices. Cooperative pur-
chasing associations endeavor to provide a type of service
especially adapted to farmer's needs. The customary retail
and wholesale agency is concerned foremost with making a
profit and any service that does not tend to develop an im-
mediate profit is lkely to be neglected. On the other hand,
the aim of the farmers' cooperative purchasing associations,
while concerned with saving as much as possible for patrons,
is to give detailed attention to the provision of supplies and
services which will result in profitable farm operation.

In every section of the United States there are many
farmers' cooperative associations that do both marketing
and purchasing. Approximately 6,000 associations, primar-
ily engaged in marketing, handle farm supplies as a side-
line activity. In many instances the cooperative purchase
of farm supplies is of more value to the farmer than the
cooperative marketing of his crop. Cooperative purchasing
has developed along with cooperative marketing for several
reasons. For example, associations have found it possible
to reduce their overhead costs by using the same facilities
for assembling and selling crops, and for buying and
distributing supplies to the farmer. Furthermore, a farmer
delivering crops to be marketed by an association looks
upon it as a convenience if he can buy his supplies from
the same organization. Also, he may not desire to belong
to two organizations with the responsibilities of membership
in both when one association can perform satisfactorily
all the required services. Furnishing supplies of high
quality is accepted by cooperative purchasing associations
as a fundamental principle of operation. (Condensed from
Bulletin No. 1, Farm Credit Administration).
One large cooperative association expresses itself in the
following by-laws:
1-To encourage, introduce and apply improved busi-
ness methods in agriculture and to promote cooperation





COOPERATIVE AGRICULTURE 41

with national, sectional, state, county, and local organiza-
tions that are engaged in the work of developing agricultural
interests concerned in cooperative buying and selling.

2-To encourage, introduce, and apply better and more
economical methods in the purchase of farmers' supplies
and products.

3-To secure efficient and economical methods in the
grading, packing, transporting, marketing and advertising
of farm products.

4-To effect economical methods of distribution.
5-To develop business cooperation among agricultural
interests and to encourage a cooperative spirit on the part
of the public.
6-To encourage and promote a closer mutual relation-
ship between agricultural interests and industrial interests
and the consuming public, and a better understanding of
the problem pertaining hereto.


Consumer's Cooperative

Increasingly related to cooperative agriculture in a
more or less definite sense, are the consumers' cooperatives
which have developed over the country into one of the great
groups of cooperatives. A rough estimate shows 6.500 local
consumers' cooperative, with members approximating 2,-
000.000 families and with a business turnover of about
$500,000,000. in 1936.
A considerable part of this business is done by farmers'
purchasing associations. For the 1935-36 season the Farm
Credit Administration placed the number of such associa-
tions at 2.112 with a membership of 950,000 and total
purchases of $315,000,000. Consumers' cooperatives are not
only set up by residents of cities and towns but by small
farmers.






DEPARTMENT OF AGRICULTURE


Food Chain Cooperation

In 1936 a special committee of the National Cooperative
Council met with representatives of the National Associa-
tion of Food Chains to discuss problems of common
interest among agricultural producers and the distributors
of their products, and especially a means of intensively
handling seasonal surplus crops occasionally flooding the
market.

Leaders of the chain food store industry had been
advised that certain practices of long standing in distribu-
tion were regarded by a large number of farmers as harmful
to their interests. According to the food chain association
such practices had never been followed by the majority in
the industry except at times when merchants were forced
to meet a competitive situation. It was admitted, how-
ever, that many chain food store operators had failed to
understand the problems of the farmer; as for instance the
advertising of "loss leaders" for the purpose of luring
customers, resulting in depressed prices to the farmer.
Above a clearer understanding between these two groups,
lay the realization that one of the most pressing problems
of the farmer are the occasional surplus crops and the
consequent demoralization to the grower.

Following a series of meetings between representatives
of many farm marketing organizations and representatives
of the food chains, agreement was reached in which chain
food store operators pledged their, aid toward the elimina-
tion from all branches of the industry of practices to which
thefarmer objected, as inimical to the best interests of both
retailingand agriculture. Preference was expressed on the
part of both chain food store operators and producer groups
to deal with one another on a net price basis, eliminating
from negotiations as far as possible all intervening broker-





COOPERATIVE AGRICULTURE


ages, commissions, and agency allowances. The members
of the National Association of Food Chains pledged their
help to the National Cooperative Council whenever seasonal
surpluses and emergencies might threaten a substantial
portion of an important crop.

These developments were embodied in resolutions and
unanimously adopted by the members of the National
Association of Food Chains, comprising some 150 food store
chains, including about 37,000 stores. The National Co-
operative Council adopted a resolution commending the
work of the special committee and another resolution
commending the action of the food chains.

Since then a number of separate Producer-Consumer
campaigns have been carried out to meet surplus emergen-
cies with such products as canned peaches, domestic fresh
beef, dried fruit, poultry, avocados, walnuts, lamb and
grapefruit During the 1936-37 season a grapefruit overage
of 22.000 cars between Florida and Texas was largely
disposed of through one of these campaigns.

For the disposal of surplus crops through chain co-
operation, several requirements are to be met According to
the association, "First, it must be demonstrated statistically
that an emergency exists, i.e, that a surplus threatens the
market. Second, the request for aid must come from the
farm organizations or producers themselves. Third, the
farm organizations must represent a substantial majority
of the producers of the crop in all major producing areas."

When these requirements are met, dates for the nation-
wide sale are set and the entire personnel of each chain
company is enlisted





44 DEPARTMENT OF AGRICULTURE




General Legislation Affecting

Agricultural Cooperation

Most cooperatives are interested in three types of
general legislation. The first class includes the cooperative
marketing acts and other acts permitting the formation and
operation of cooperatives on a basis not permitted under the
general cooperation laws. The second class of laws include
such features as found in the exemption provisions of the
Federal Revenue Act, in the financing features of the Farm
Credit Act, and in the anti-trust exemption contained in
the Capper-Volstead Act. The third class embraces the
many laws, both State and Federal, which regulate business
and business practices, which impose taxes, and which
govern the relations between employed and employee. Ex-
amples of this type of legislation are the Robmson-Patman
Act, Social Security Act, Wagner-Connery Labor Act, and
laws such as governing cold storage and warehouse com-
panies.

The Robmson-Patman Act prohibits discrimination in
price between purchasers of commodities of like grade and
quality. To accomplish this, certain discrimination in
price and advertising and brokerage allowances have been
made unlawful. This law requires a seller to treat all of
his customers equally, or at least on proportionately equal
terms. It applies to every transaction of interstate com-
merce and it applies indirectly to intrastate sales. Those
responsible for the management of cooperatives engaged
in buying or selling goods in intrastate commerce, should
become familiar with the provisions of this act and endeavor
to keep up to date with the rules and regulations imposed by
the agency responsible for its administration.

The Social Security Act is legislation of a different
character. It provides, among other things, for old-age





COOPERATIVE AGRICULTURE


benefits or pensions, and indirectly for unemployment in-
surance. To provide revenue to cover the benefits and
insurance, certain taxes are imposed.

Every employer, regardless of the number of his
employees, unless he is in an excluded class, is subject to
one of the taxes imposed by the Social Security Act. And
every employer of eight or more employees, unless he like-
wise is in an excluded class, is subject to both of the taxes
imposed by the act.

The cooperative businessman should also become
familiar with the exemption provisions of the Federal
Revenue Act, for if his business meets the requirements of
the exemption provisions, his cooperative is excused from
the payment not only of the noraml income tax. but also
the undistributed profits surtax, the capital-stock tax, the
excess-profits tax, and the stamp tax. (News for Farmer
Cooperatives, Nov., 1937 )






DEPARTMENT OF AGRICULTURE


Reminder
By NATHAN MAYO, Commissioner of Agriculture

A great many things can be accomplished through the
medium of cooperatives. At the same time there are things
that cannot be done. Following are a few salient "cans" and
cannott" in the field cooperative agriculture:

A Cooperative CAN:
Standardize and help stabilize production.
Advertise and widen distribution and develop new
markets.
Improve grade, pack and containers.
Help to improve distribution between existing markets.
Buy collectively.
Finance marketing operations.
Maintain favorable relations with the trade by conform-
ing to the highest ethics in business.
Hire men who believe in cooperation and fire men who
don't.
Be a democratic instead of an autocratic movement.
Employ skilled salesmanship.
Assemble the commodities and resources of its mem-
bers.
Employ export graders and packers,
Eliminate competition between local organizations.
Decrease wasteful practices.
More easily secure shipping point inspection.
Collect claims, improve quality, form pools.
Help to avoid gluts and famines.





COOPERATIVE AGRICULTURE 47


Make cheaper credit possible.
Make for cooperative production.
Make for cooperation in preparation for market
Eliminate a large percentage of the middlemen deal-
ing in farm crops
Get the grower a quality price when he grows a quality
product


A Cooperative CANNOT:
Perform miracles.
Distribute large crops to the market at as high prices
as small ones.
Entirely eliminate the middleman
Dominate markets when controlling only part of the
crop.
Change human nature or make a good farmer out
of a poor one.
Sell all the produce of all its members all the time for
a profit (neither can this be done by independent market-
ing).
Monopolize supply or prevent all competition.
Succeed if a majority of its members are disloyal.
Wave a magic wand and remove all the difficulties
in production and distribution
Change low grade products into "A" grades.
Make the weatherman cooperate even if farmers limit
the acreage.
However, with many of the difficulties and limitations
of cooperative marketing still to be overcome by experience
in actual operation, Florida producers may well forge ahead
in the work of building their organizations for greater
future service and permanent success.





DEPARTMENT OF AGRICULTURE


Cooperative Flashes

The Cooperative Division of the Farm Credit Adminis-
tration maintains a research and educational service for
cooperatives Recently that service has been greatly in-
creased.
--oOo--

Thousands of groups of farm women over the country
are cooperating to find a short cut between producer and
consumer. For the miscellaneous items, "curb" markets
often represent a profitable outlet and the cooperation in
this respect of the farmer's wife has helped to make possible
the additional satisfaction of the family's needs by direct
interchange of cash and commodities.

-oOo-

Courses in cooperative agriculture are being taught i
practically all State agricultural colleges in the Country.
oOo-

More farmers sell dairy products cooperatively than any
other agricultural commodity.
-oOo-

About one farmer m every three m the Umted States
sells a part or all of his products through agricultural as-
sociations.
--oOo

Sales value of cooperatively marketed farm products is
roughly equal to one-fifth of the total cash farm income
oOo-

Auctioning poultry and eggs cooperatively has made
rapid growth in the last ten years and has become one of






COOPERATIVE AGRICULTURE


the most interesting developments in cooperative market-
ing.
--o--

About 350 farmers' cooperatives in New England, New
York and New Jersey are mutual insurance companies Co-
operative insurance societies write insurance covering life,
health, accident, household goods, fire, storm, and all types
of auto risk In 1935 seven of these societies had 270,145
policy holders, with over 138,900,000 insurance in force.

--oo--

By the close of the 1934-35 marketing season there were
1,082 active fruit and vegetable associations in the United
States that did an annual business of $200,000.000. These
cooperatives had a total membership of 158,000 producers.
Approximately 28,; of these were in California and 9'/, in
Florida. More than 60 varieties of fruits and vegetables
were handled. Of the associations, 731 specialized in hand-
ling citrus fruits, potatoes, apples, strawberries and grapes,
300 handled citrus fruits. While 60'/, of the total citrus
crop was marketed cooperatively, only 25%/ of the Florida
citrus crop was handled through cooperative associations.
In California and Arizona about 85'< of citrus production
was marketed cooperatively.

--oOe--

Farmers are the only group of people in the United
States who are allowed to organize without limitation, in
that only the farmer can have a complete monopoly and be
within the law

-oOo--

With barely 77; of the world's population, the people
of the United States have created and now own more than
half the world's wealth





50 DEPARTMENT OF AGRICULTURE

It has been estimated that there are about 5,500 credit
unions in the Country, with membership of 1,250,000 and
combined-assets of $100,000,000.
--oOo--

There are cooperative groceries, butcher shops, general
stores, filling stations, fuel yards, bakeries, restaurants,
dairies, student supply stores, burial societies, printing
plants, laundries, garages, and a large variety of others in
general industry.
Florida's laws covering cooperative agricultural asso-
ciations were passed in 1909 and have been amended from
time to time to make their provisions of greater benefit to
the farmer.
--Oo--

Cooperation in the technical sense has been defined as
a "new form of industry ... its inspiration is fraternity; its
methods is economy; its principle is equity." It refers to
producers and consumers who have united to satisfy their
economic needs, collectively rather than individually.





COOPERATIVE AGRICULTURE


What Other States Are Doing

During the 1937 season, Virginia Dark Fired Tobacco
Growers Marketing Association, Farmville, Va., sold 7,067,-
000 pounds of tobacco. Of this amount, 601,000 pounds were
marketed through the "nicotine program." Additional
warehouse space has been provided; 7,500 square feet at
Blackstone, 20,000 at Farmville, and 15,000 at Lynchburg,
--oOo--

Material expansion in operations by the Rio Grande
Valley Citrus Exchange, will enable the association to
handle three or four times more fruit. This will be brought
about by an increase in the membership and by bringing
into the Exchange several additional local cooperative as-
sociations. With the enlargement of the juice plant the
Exchange will have a potential volume of 1,000,000 cases
of juice annually. A dehydrating plant is being completed
for the purpose of drying the hulls and pulp, a by-product
from the juice plant, to be made into grapefruit pulp meal
for poultry and dairy feed.
--oo--

In 1937 the Central Cooperative Association with head-
quarters in South St. Paul, Minn., paid its members patron-
age refunds and dividends amount to 25; of commissions
collected in 1936. Payments of $107,859. brought the total
payments since the cooperative was formed in 1921 to $1,-
606,803. In 1936 Central handled 18,810 carloads of stock,
an increase of 464,. over 1935, or approximately 25% of all
livestock marketed in South St. Paul. Business handled by
Central at West Fargo brought the total to 20,139 carloads.

--oOo--
Ray-Carroll County Grain Growers, Wakenda, Mo., did
a total business of over S900,000 in 1936. About two-thirds





DEPARTMENT OF AGRICULTURE


of this volume was grain marketed, and one-third supplies
purchased for the membership.

-- Oo

Maine Potato Growers, Presque Isle, Maine, during the
1936-37 marketing season, serviced 186 members and hand-
led 3,080 cars of potatoes. As a result of an aggressive cam-
paign the association now has a total membership of 320
growers.
---oOo---

Feed buying for members, started in 1936 by the Pure
Milk Producers Association, Kansas City, Mo., resulted in
a saving of about S3,700. The feed was purchased in car-
load lots; in most instances several orders were pooled to
make a carload, thus giving the advantage of wholesale
prices on small quantities. Seventy-five carloads of hay and
13 carloads of grain and mill feeds were bought.
---oOo---

Organized in 1933 and beginning with one employee,
the Lorain County Farm Bureau Cooperative, Elyria, Ohio,
did a business of $54,714. Patronage in 1934 was $127,192;
in 1935 the record was $151,954, and the total for 1936 was
$189,148. There are now 14 full-time employees.

-oOo--

Sowega Fertilizer Corporation, Adele, Ga., paid a total
patronage dividend in 1937 of $7,844. This amount was
considerably in excess of any previous season Approxi-
mately 4,500 tons of mixed fertilizers and materials were
manufactured and sold.

-oOo
The total value of farm products sold by the Michigan
Potato Growers Exchange, Cadillac, Mich, during the 1937
season was $724,999. Of this amount, $25,642 represented
beans and grains and the balance potatoes.





COOPERATIVE AGRICULTURE


For 50 years ranch operators in the Southwest have
been moving cattle to the Flint Hills area during the sum-
mer and fall for fattening on grass under contract Co-
operatives now provide supervision of grazing under pasture
contracts.
In the 1935-36 season, fruit and vegetable farmers of
Utah marketed 118 more of their crops through coopera-
tive associations than during the 1934-35 period.
California citrus growers control one of the largest
timber holdings in the United States. Their cooperative
purchasing organization, the Fruit Growers Supply Co.,
could produce in the farmers' own lumber mills and box
factories enough shipping crates to move the entire Cali-
fornia citrus crop to market annually.

In 1912, membership of the California Walnut Growers
Association totaled 1,164 with a production of 5,683 tons
of merchantable walnuts or 52%/of the State crop. In 1937
there were 7,988 members who produced 35,873 tons of mar-
ketable walnuts during the record 1935 season or 85%C of
the State total
--o~o--

List of Farm Credit Administration publications, in-
cluding bulletins of interest to cooperatives, furnished by
FCA, 1300 E. Street, N. W.. Washington, D. C.






54 DEPARTMENT OF AGRICULTURE




TABLE I Cooperatives Affiliated with the Challege ream & Butter Associatlon. Janar


Location


Dairyman's Cooperative Creamery Association
Danish Creamery Association.
King's County Creamery Association
Harmony Valley Creamery Association
Imperial Valley Milk Producers Association
Milk Producers Association of Central Calif
Farmers Cooperative Creamery Co.
Jerome Cooperative Creamery
Point Reyes Dairymen's Association'
Bodega Cooperative Creameryt
Ada County Dairymen's Association'
Humboldt Creamery Association'
Los Angeles Mutual Dairymen
Western Slope Cooperative Creameries, Inc
Plateau Creamery Association
Surface Creek Creamery Association
Montrose Cooperative Creamery
Montezuma Creamery Association
Upper snake River Valley Dairymen's Association
Star Valley Swiss Cheese Co.
Star Valley Swiss Cheese Association
Upper Star Valley Swiss Cheese Association
North Fork Creamery Association
United Creameries Association --..........
Arago Cooperative Cheese Associationt
Dairymen's Cooperative Creamery of Boise Valley
Farmers Cooperative Creamery Co 1
Interstate Associated Creameries
Lower Columbia Cooperative Dairy Assocla
tion.
Dairy Cooperative Association
Central Oregon Cooperative Creamery,
Eugene Farmers' Creamery.
Pine Eagle Dairymen's Cooperative Associa-
tion.'
Umatilla Cooperative Creamery
Wallowa County Creamery Association'
Farmers Cooperative Creamery of Carlton'
Union County Cooperative Creamery,
Monmouth Cooperative Creamery and Ware-
house
Weber Central Dairy Association


Tulare, Calif.
, Fresno, Calif. -
Lemoore, Calif. 1
San Luis Obispo, Calif.
Holtville, Calif. ---
Modesto, Calif.
Payette, Idaho
SJerome, Idaho.. 1
Point Reyes, Calif.
Bodega, Cahf.-
Meridian, Idaho
Fernbrdge, Calif. .
Los Angeles, Calif.
Fruita, Colo
Collbran, Colo.
Eckert, Colo.
Montrose, Colo
Cortez, Colo.
Idaho Falls, Idaho
I Freedom, Wyo. 1
Thayne, Wyo. 1
Afton, Wyo. 1
Hotchkiss, Colo. 1
Arcata, Calif. ... 1
Arago, Oreg.
Caldwell, Idaho 1
Gridley, Calif.1
Portland, Oreg.
Astoria, Oreg.

Portland, Oreg.
Redmond, Oreg.
Eugene, Oreg.
Halfway, Oreg

Hermiston, Oreg
Wallowa, Oreg.
McMmnville, Oreg.
Union, Oreg.
Monmouth, Oreg.

Ogden, Utah 19


iShpping to San rrancsco sales branch The other locals ship to the Los Angeles, branch.
Source of data Obtained irom the records of the Challenge Cream & Butter Association.






COOPERATIVE AGRICULTURE 55




Volume of Sales of Specified Gram Made by Cooperate Association, 1937 Survey

Associa- Sales by Sales by Total sales
tions local terminal
Commodity handling coopera- coopera- Adjust-
specified live tive ment for
com- assoca- associa- Gross upli- Net
modity tions tons cation'


1,000 1,000 1,000 1,000 1.000
Number dollars dollars dollars dollars dollars
eat 2.116 133,510 54,637 188,147 45,558 142,589
rn 1,476 88,961 16,280 105,241 8,972 96,269
ts 1,637 21,561 2.982 24,543 1,978 22,565
rley -821 16,237 16,237 1,918 14,319
ce 15 11,390 11,390 11,390
beans 266 6,797 6,787 1,148 5,649
ans, diy 80 6.290 750 7,040 2,562 4,478
axseed 392 4,304 4,304 517 3,787
ye 401 1,778 767 2,545 272 2,273
rghums -30 247 95 342 135 207
our 0 2 5 216 216 52 164
classified 23,127 9,755 32,882 5,360 27,522
Total
he amount of duplication deducted represents the value of farm products sold by one associa-
n to oi through another and consequently reported by both


The Terrebonne Cooperative Association of Houma, La.,
and the Lafourche Truck Growers Cooperative Association
of Lockport, La, with a combined tonnage of well over
1,000 cars of potatoes and other vegetables, recently affili-
ated with the National Fruit and Vegetable Exchange. To
handle the increased tonnage of these new members, the
National is establishing two new sales offices, one at Houma
and one at Lockport.





DEPARTMENT OF AGRICULTURE


Door-to-Door Survey Shows

Progress of Co-ops
By F. F. HILL, Deputy Governor, Farm
Credit Administration

(Published in FARMER COOPERATIVES for September, 1938)
Twenty-one years ago this fall the old Office of Mar-
kets and Rural Organization m the Department of Agricul-
ture published the first official survey of farmers' coopera-
tives. The 1917 report showed 5,424 cooperative marketing
and purchasing associations in the United States, with an
estimated annual business of $625,940,000. At that time
about 1 in every 10 farmers was a member of a cooperative

As this article goes to press a new Nation-wide survey-
the first actual door-to-door canvass of farmer co-op to be
made in this country-is being completed by the Farm
Credit Administration and the 13 banks for cooperatives and
about 30 of the State agricultural colleges and universities.
They report 15,573 farmers' co-ops and mutual companies.
Gross business of the marketing and purchasing associa-
tions, including both wholesale and retail sales, aggregates
$2,750,000,000 annually. Nearly half of all American farm-
ers are now marketing farm products or purchasing farm
supplies, insurance, or farm business services through co-
operative farmer-owned organizations.

We know before this, of course, that the business of
farmer cooperatives declined during the depression, due
primarily to falling price levels, and then turned upward
as recovery began. The Cooperative Division of the Farm
Credit Administration mails inquiries to cooperatives each
year, which enables the division to estimate current busi-
ness and membership. What we did not know definitely
was that cooperative marketing has regained most of its






COOPERATIVE AGRICULTURE


depression losses; that the membership and business of pur-
chasing cooperatives have more than doubled during the
past 10 years; and that, from the standpoint of membership,
dividend payments and financial condition, agricultural
cooperation in the United States appears to be in a stronger
position today than at any time in its 70 years of history

Farmer cooperatives are found in every State in the
Union. the District of Columbia, and Puerto Rico. Heaviest
concentration is in the North Central States, but association
in Eastern, Southern, and Pacific States have also forged
ahead since the depression. Minnesota has the largest num-
ber of farmer cooperatives-over 1,300-but California,
thanks to the cooperative marketing of citrus fruit, has the
largest volume of business

There are 10,752 associations engaged m marketing
farm products and purchasing farm supplies; 2,500 mutual
irrigation companies, about 1,900 mutual fire insurance com-
panies, and several hundred others in the miscellaneous
group.
The actual value of farm products sold and supplies
purchased cooperatively by farmers increased $750,000,000
since 1932 to approximately $2,100,000,000 in 1936, the final
year covered by the survey. Over 7,400 cooperatives sell
farm products as their main business and about 2,600 are
primarily purchasing cooperatives. In 1936 farmers re-
ceived $1,762,000,000, or about one in every four of their
cash-income dollars, from cooperative marketing organiza-
tions: an:d bought over $337.000,000 worth of farm supplies
cooperatively.

MARKETING

In the field of cooperative marketing. farmers continue
to receive the largest dollar returns from the sale of milk
and other dairy products-over a half-billion dollars in 1936.
Grain marketing associations rank second and livestock
third with sales of about $300,000,000 each. Cooperative






DEPARTMENT OF AGRICULTURE


marketing of fruits and vegetables amounted to approxi-
mately $275,000.000 during the survey year, cotton $140.000,-
000, eggs and poultry $68,000,000.
Although the number of marketing associations has not
increased during the past 10 years, the existing organiza-
tions appear to be operating over larger areas and handling
farm products more efficiently. Because of changing methods
of transportation and for other reasons, many smaller as-
sociations have combined into larger units of discontinued
operations. Both grain marketing and livestock shipping
associations have declined m number. This tendency to
decrease has been offset to a considerable extent by the
organization of cooperatives in other fields, such as vege-
tables, cotton and poultry. There are many more bargain-
ing associations than there were 10 years ago. There has
also been a noticeable increase in the use of auctions by
cooperatives as a means of selling eggs, fruits, and vege-
tables. Significant also is the fact that farmers' marketing
associations have increased the consumption of many farm
products through Nation-wide advertising and by cooperat-
ing with distributors in planning sales programs to "eat
more of this" or "drink more of that."
The life expectancy of marketing cooperatives is con-
siderably longer than it was 20 years ago. The mortality
rate has decreased. The average length of life of associa-
tions in operation today is about 17 years, whereas the aver-
age life of associations which discontinued operations since
1900 was less than 10 years. Associations today are not
plagued by price-fixing schemes, misinformation, and mem-
bership disinterest to the extent that they were 20 years
ago. The childhood diseases of cooperative marketing are
passing.

SPECIALTY CROPS
Cooperatives are finding Nation-wide markets for fruits,
vegetables, and specialty crops which 10 or 15 years ago
enjoyed only a seasonal demand. The year-round demand





COOPERATIVE AGRICULTURE


for California's citrus fruits, raisins, walnuts, olives, and
other products has been created largely through cooperative
advertising. Eggs and poultry from the Pacific coast are
regularly marketed in New York City, Philadelphia, Balti-
more, and other urban centers. Irish potatoes from Vir-
ginia's Eastern Shore go to a dozen or more States. Straw-
berries from Louisiana find their way through cooperative
channels to northern markets Turkeys from Colorado.
Utah, and Wyoming handled by cooperatives enjoy a market
almost Nation-wide in extent. Cooperation is finding a per-
manent place in the grocery basket for Maryland's sweet
corn and spinach. Michigan's cherries, Georgia's pecans,
Idaho's dry beans, Montana's peas. Wisconsin's cheese, Penn-
sylvania's mushrooms, Minnesota's butter, New Jersey's to-
matoes, Oregon's pears, Texas' grapefruit, Arkansas' rice.


PURCHASING COOPERATIVES

Purchasing cooperatives have made the largest gains.
Over a million farmers are buying farm supplies and equip-
ment across the counter of cooperative associations In
addition to the 2,000-odd associations whose main business is
purchasing, there are nearly 4,000 marketing associations
which handle supplies for their members as a side-line ac-
tivity. Feed for livestock and poultry makes up the larg-
est dollar volume of cooperative purchasing, but sales of
oil and gasoline for farm trucks and motors are crowding
for first place. Other products handled in volume by farm-
ers' associations include fertilizer, farm machinery, binder
twine, hardware, crates, baskets, and other containers, spray
material and seed.

Large-scale purchasing organizations like the Grange-
League-Federation in New York State, Southern States at
Richmond, Va., or the Farmers' Union Central Exchange
at St. Paul are supplying scores of local purchasing associa-
tions in their respective areas and increasing their business
steadily each year.





DEPARTMENT OF AGRICULTURE


Although the typical purchasing cooperative continues
to be a relatively small association of several hundred farm-
ers operating in one or more counties, one of the most im-
portant developments in agricultural cooperation during
the past 10 years has been the growth of wholesale purchas-
ing associations. There are large purchasing wholesales
serving most of the Northern and Middle-Western States
and some of the Southern and Western States.

MANUFACTURING
Cooperatives are manufacturing more farm supplies.
Ten years ago a few farmer cooperatives were selling their
own seed and mixing some feed and fertilizers. Today hun-
dreds of cooperatives are mixing feed. There are a dozen
or more cooperative fertilizer factories, five or six oil-
blending plants, a number of paint-manufacturing establish-
ments and a few associations which are manufacturing or
assembling farm machinery and other implements.

With the increased use of power-driven machinery on
the farm, the growth of farmer-owned oil and gasoline
associations has been almost phenomenal. Over 1,050 farm-
ers' co-op filling stations m 26 States are pumping gasoline
and oil to their members as a principal business, and over
700 other associations are selling these and other petroleum
products as a side-line activity. Ten years ago there were
only a handful of such organizations. Today they dot the
agricultural map from Ohio to Montana and are moving
into Eastern and Pacific States

FARM SERVICES
Cooperatives are not only helping farmers do a better
job of marketing and purchasing but are also teaching their
members how to do a better job of farming.

Agricultural cooperatives have brought the lessons of
science and chemistry to the farmer's doorstep. For years
the Grange-League-Federation and other cooperatives have





COOPERATIVE AGRICULTURE


been driving home to farmers the importance of "open
formula" on the outside of a sack of fertilizer. Today farm-
ers know what they are getting in the form of phosphates,
potash, and nitrogen. From the marketing associations have
come the treated seed, the standard varieties, the disease-
resisting plant, that mean assured income instead of crop
failure. Today in hundreds of agricultural communities
co-op membership meetings are virtual classrooms for in-
structing farmers in the latest methods of spraying, hand-
ling, packing, and preserving farm products.

To prevent the ravages of insects and blight, to check
the wash of soils, to improve dairy herds-these are some
of the purposes for which farmers have organized hundreds
of production-service associations. These associations pro-
cure for the use of the whole community the heavy machin-
ery or the technical services which the individual farmer,
acting alone, could not afford to buy. Scores of new soil
conservation co-ops are buying machinery for terracing and
grading. Farmers are cooperatively ginning 15 to 20 per
cent of the Texas-Oklahoma cotton crop. In the Western
and Pacifiic States, the new survey shows that about 2,400
mutual irrigation companies are leading water to farms and
ranches on a cooperative basis. Dairy-herd improvement
associations are increasing the profits per cow. Through
other types of service associations farmers are cooperatively
spraying orchards and field crops, crushing limestone for
fertilizer, and setting poles for electric lines and telephone
service.

PROGRESS IN EDUCATION
Farmers' Association are marketing sound cooperative
principles along with their commodities and farm supplies.
From the new survey we learn that 86 per cent of the 10,-
000-odd marketing and purchasing associations in the United
States are governed by the accepted cooperative principle
of one-man-one-vote control. Not many students of agri-
cultural cooperation would have ventured to place the






DEPARTMENT OF AGRICULTURE


percentage so high before the actual count was made The
officials of farmer cooperatives realize today as never before
that the success of cooperative marketing and purchasing
depends to a large extent upon an interested, informed,
and responsible membership. Members not only own the
organization but participate actively in its affairs.

The larger associations are spending an increasing per-
centage of their net income on membership education.
Many have employees trained in the science of membership
relations. It is the business of these officials to help the rank
and file of members understand the technical side of coop-
eration and instruct members in the long-range, as well as
the more immediate, benefits of cooperative marketing and
purchasing. This is being done by membership meetings
which hundreds of thousands of farmers regularly attend.
In addition to supplying information on improved methods
of preparing farm products for market, these meetings are
teaching the business side of cooperation by means of
circulars, house organs, wall charts, and readily understood
financial statement. As a result, farmers have begun to
realize that cooperatives need strong financial structures
and adequate operating capital, as well as markets for
products ond reliable sources of farm supplies.

Membership and employee education has become an
accepted activity of agricultural cooperation. Many associa-
tions are developing their own technical schools to teach
their employees and some of their members the principles
of cooperative business. There are short-course cotton-class-
ing schools in the Southern States; grading schools for the
employees of cooperative wheat elevators; and schools
conducted by wholesale purchasing associations to train
store managers, field men, and other employees. But edu-
cational work is by no means confined to activities by the
co-ops themselves. State agricultural colleges and universi-
ties over the past two generations have been teaching
cooperative marketing and cooperative business principles
to farmers' sons as regular college courses. Today such





COOPERATIVE AGRICULTURE


classes are being taught in 45 of the 48 State agricultural
colleges and universities.

MEMBERS' CAPITAL
The work is showing up on cooperative balance sheets.
At the time the new survey was made the total assets of
the marketing and purchasing associations amounted to
$510.846,000 Member-ownership capital is these associa-
tions amounted to $287,860,000, representing either original
contributions or savings which members allowed the asso-
ciations to retain; S109.561.000 represented borrowed capital
for which the associations had given notes or mortgages;
$54,194,000 had been obtained on open accounts; the balance
came from other sources.

PATRONAGE DIVIDENDS
Agricultural cooperation is paying cash dividends. The
survey-taker from the banks for cooperatives found that in
addition to providing more effective marketing of farm pro-
ducts and reasonable-cost farm supply purchases, over 4.000
of the 10,752 marketing and purchasing associations turned
back patronage dividends to their members in 1936 amount-
ing to more than $25,000,000. Many of these cooperatives
also pay limited dividends on stock owned by farmer-
members.

Another significant fact brought out by the survey is
the influence of the 13 banks for cooperatives in pushing
down interest rates paid on borrowed money by farmer-
cooperatives. Since 1934, the year after the banks for
cooperatives began operation, the trend in interest rates
charged farmer co-ops by various creditors has been steadily
downward. For the United States as a whole, the average
interest rate on short-term money borrowed by co-ops
dropped from 5.9 to 5.7 per cent; on medium-term loans
from 5 6 to 5 per cent; and on long-term loans from 5.1 to
4.8 per cent The banks for Cooperatives charge 2 per cent






DEPARTMENT OF AGRICULTURE


a year on commodity loans, 3 per cent on operating loans,
and 4 per cent on physical facility loans.

The survey also shows that about 5,900 farmers' mar-
keting and purchasing cooperatives, or slightly more than
half the total number in the United States, use credit for
their operations. The largest amount of borrowed money
used at any time in 1936-the last year embraced by the
survey-aggregated $314,553,000.

While commercial banks are the largest creditors of
farmers' associations, the business volume of the Banks for
Cooperatives has grown steadily during the past 4 years and
now occupies second place. In 1936 cooperatives using com-
mercial banks as a principal source of credit, borrowed a
total of $124,114,000; those using Banks for Cooperatives as
a principal source, $81,711,000; other cooperative organiza-
tions, $12,473,000; individuals, $13,328,000; and the remaining
amount from miscellaneous sources.


Patronage dividends returned to farmers in 1936 ex-
ceeded 25 million dollars.

*
Total assets of cooperatives exceed a half billion dollars.
Of this amount, members have invested $287,860,000.

*
Farmers' mutual fire insurance companies represent the
oldest form of cooperative activity among farmers in this
country. However, more than 2,000 of the marketing and
purchasing associations have been operating continuously
for more than 25 years.

*
Purchasing associations have made the most rapid
growth during the past 5 years.





COOPERATIVE AGRICULTURE 65



CAN COOPERATIVE MARKETING DO IT ALL?
By NATHAN MAYO, Commissioner of Agriculture
Can the American farmer obtain through cooperative
marketing his much-needed "relief?"
How far will orderly selling by producing groups go
in stabilizing markets?
Can Florida producers hope to hold up profitable prices
permanently by clearing houses and similar organizations?
These questions may well be considered in the light of
recent developments in cooperative marketing circles out-
side of Florida.

In California, where cooperatives have had some years
of success. it now appears that trouble is at hand. Growers
of peaches, raisins, prunes and some other crops are loaded
down by surplus production and are said to be facing ruin-
ous prices. After several seasons of prosperity resulting
from collective action in the sale of their products, these
California folks are now said to be feeling the weight of
their own heavy crops which cannot be sold except at loss.
They are reported to be considering heroic measures, such
as allowing a large part of the present year's crop to go
to waste in order to reduce this surplus to the level of a
profitable instead of unprofitable supply.

Up in Canada where they grow vast quantities of wheat.
the growers formed a pool and operated it successfully for
a number of years. For a while it worked well. Undoubt-
edly it steadied the price of wheat and did much to prevent
sags and gluts in the market. Like the California organiza-
tions. it brought cheer and confidence to the producers.
Farmers everywhere were looking at these cooperatives
with pride and hopefulness But now we have the report
that the wheat pool is in trouble. More than seventy-five
million bushels of wheat, on hand as a "carry-over" from






66 DEPARTMENT OF AGRICULTURE

last year. was added to this year's large crop, and the two
combined proved too much for the market to stand. Low
prices, asserted to be lower than the cost of production,
resulted, and Canadian and American wheat growers are
now figuring their losses.

This experience of our friends in California and Canada
is not a new one for cooperatives. The rice growers and
tobacco growers of the south have had similar troubles.
Both flourished a while until over-production piled up its
excess baggage too heavy for them to carry.
In the case of Florida. it may be pointed out that we do
not produce crops that can be kept from one season to the
next, as with wheat or tobacco or raisins or cotton. It is
true that Florida's chief products are citrus fruits and vege-
tables. which are perishables and cannot well be carried
over. But this fact by no means removes the peril of the
surplus In reality, it only emphasizes this peril since it
practically compels the marketing of these perishables as
soon as they are harvested. A Florida cooperative with
an excess of oranges or of vegetables, unlike a cooperative
handling cotton or wheat, would be forced to dispose of
this surplus at the same time it was selling the normal
amount demanded by the trade. We would not have the
chance that a wheat pool might have. viz.. to unload the
"carry over" at a profit should the year into which it was
carried prove a year of low yields. Again, with the Florida
citrus grower there would be the added difficulty of con-
trolling annual production, since the citrus crop is not
planned or planted for each separate year. but for all the
years the groves live and bear.

What lesson can we get from these troubles?

Just this: COOPERATIVE MARKETING CANNOT
SUCCESSFULLY HANDLE A SURPLUS SO LARGE AS
TO EXCEED ALL DEMAND.

We must consider the fact that one invariable result of
successful collective selling by farmers has always been





COOPERATIVE AGRICULTURE


a marked increase in production. Cooperatives that direct
the marketing of seventy-five per cent or mote of any crop
can and have always, under normal conditions, sold that
crop at a price satisfactory to themselves This far they
can serve most helpfully the cause of agriculture. But no
cooperative yet brought forth has mastered the vexing
problem of EXCESS or SURPLUS. It is one of the trage-
dies of agricultural life that the very agency which has
profitably sold a crop of normal size has been the agency
which, without intent to do it, has stimulated the production
of succeeding crops which were ot abnormal size and had
to be sold at low prices. There we have the sad spectacle
of farm organizations defeating their own ends and thwart-
ing the very purpose for which they were founded

What can be done about it' The thing that MUST be
done, if cooperative marketing shall function, is to CON-
TROL NOT ONLY MARKETING. BUT AHEAD OF IT,
CONTROL PRODUCTION

Whether this can readily be done is the BIG QUESTION
LOOMING UP BEFORE COOPERATIVES. It will have
to be solved or all of our efforts to help ourselves through
organizations will in the end fail. This will apply here in
Florida just as it did in California. We had as well face
facts The cooperatives we are to have in our State will
give us some IMMEDIATE RELIEF and will prove a bless-
ing. But unless our growers by common consent can control
production they will not long be able to control prices.






DEPARTMENT OF AGRICULTURE


MORE ABOUT COOPERATIVE MARKETING
-Its Possibilities and Impossibilities-
By NATHAN MAYO, Commissioner of Agriculture

Heretofore in this publication we discussed the topic
"CAN COOPERATIVE MARKETING DO IT ALL." In this
paper we pointed out some of the troubles which come to
cooperatives, calling special attention to the menace of sur-
plus production-an unhappy aftermath of many coopera-
tive enterprises in the past.
Nothing in this article was designed to "throw cold
water" upon cooperative effort in Florida or elsewhere,
despite the fact that a very few of our friends seem to have
so construed it. We are in no sense opposed to this move-
ment- we are in the true sense very much in favor of it.
But we still stand upon our position taken in the article
referred to. WE KNOW THAT COOPERATIVE MARKET-
ING IS NOT A PERFECT PANACEA FOR THE
TROUBLES OF FARMING. IT HAS NOT ALWAYS
WORKED SUCCESSFULLY, PARTICULARLY IN THE
HANDLING OF THE SURPLUS WHICH IS LIKELY TO
FOLLOW IN ITS WAKE Here let us quote from C. A.
Cobb, editor of the SOUTHERN RURALIST, who says m
an editorial under the date of January 1st:
"The best cooperation can do in marketing is to put
over an outstanding job of selling the products entrusted to
it. And when this is well done, over-production with all its
train of evils is not only invited but is inevitable, WITHOUT
SOME MEASURE OF CONTROL. This is what has hap-
pened in California, where cooperation in this country had
its birth. If you doubt this, write the raisin growers and
the prune growers and any of the rest. Cooperation is no
answer to tariff discrimination against agriculture; it is
no answer to labor restriction m the interest of higher
wages for industrial workers. Cooperation is no answer to
the burden placed upon agriculture through the govern-
mental guaranteed income of industry."





COOPERATIVE AGRICULTURE 69


STRUCTURE OF THE CHALLENGE
MARKETING SYSTEM

Following the reorganization in 1917, the history of
Challenge is one of gradual but substantial expansion This
expansion has been along three general lines-number of
affiliated locals, variety and quantity of products handled,
and number of distributing plants.

By the close of 1939 the Challenge federation embraced
37 local cooperative units, representing some 33.000 dairy-
men in the States of California. Idaho, Colorado, Wyoming,
Oregon, Utah, Washington, and Nevada. The names of
these associations, their locations, and affiliation dates
appear in table 1. The location of each plant in the
Challenge system in 1939 is shown in figure 1.






70 DEPARTMENT OF AGRICULTURE

SOME THINGS A COOPERATIVE CANNOT DO

It cannot perform miracles.
It cannot distribute large crops to the market at as lugh
prices as small ones.
It cannot entirely eliminate the middleman.
Controlling only a part of the crop, it cannot dominate
markets.
It cannot change human nature or make a good farmer
out of a poor one.
It cannot sell all the produce of all its members all the
time for a profit (neither can this be done by independent
marketing)
It cannot monopolize supply or prevent all competition.
It cannot succeed if a majority of its members are dis-
loyal.
It cannot wave a magic wand and remove all the diffi-
culties in production and distribution.
It cannot change sorry culls No. 3's to A grade or No.
I's.
It cannot make the weatherman cooperate even if farm-
ers limit the acreage


THINGS A COOPERATIVE CAN DO

It can standardize and help stabilize production.
It can advertise and widen distribution and develop new
markets.
It can improve grade, pack and containers.
It can help to improve distribution between existing
markets.
It can buy collectively.
It can finance marketing operations.





COOPERATIVE AGRICULTURE 71

It can maintain favorable relations with the trade by
conforming to the highest ethics in business.
It can hire men who believe in cooperation and fire men
who don't.
It can be a democratic instead of an autocratic move-
ment.
It can employ skilled salesmanship.
It can assemble the commodities and resources of its
members.
It can employ expert graders and packers
It can eliminate competition between local organiza-
tions.
It can decrease wasteful practices.
It can more easily secure shipping point inspection.
It can collect claims, improve quality, form pools
It can help to avoid gluts and famines.
It can make cheaper credit possible.
It can make for cooperative production.
It can make for cooperation in preparation for market.
It can eliminate a large percentage of the middlemen
dealing in farm crops.
It can get the grower a quality price when he grows a
quality product.


BUSINESS DONE BY COOPERATIVES IN 1927

With the limitations and difficulties of cooperatives
marketing ever in mind, Florida producers may well press
ahead to the work of building their organizations With
the experience of hundreds of farm business enterprises to
guide them, our people have the best possible chance to
construct and guide their own associations so as to become
permanently successful





72 DEPARTMENT OF AGRICULTURE

It is heartening to consider the size of the business
transacted by farmers' associations in the United States.
A report issued by the Bureau of Agricultural Economic
at Washington, D. C, give us the following very interest-
ing figures relative to the 11,400 cooperative associations
listed in the nation:


Gram Associations
Dairy Associations .. -
Live Stock Associations
Fruit and Vegetable Associations
Cotton Associations.
Poultry and Egg Associations
Nut Associations -.
Tobacco Associations .......
Wool Associations
Miscellaneous ..

Grand Total Business for Year 1927


... $ 680,000,000
620,000,000
320,000,000
300,000,000
97,000,000
40,000,000
14,600.000
22,000,000
7,000,000
200,000,000

_$2,200.600,000


This huge total of business indicates the tremendous
strides the American farmer has made toward the proper
management of his own business affairs. Here in Florida
we are just beginning. Our citrus, poultry, dairy, truck
and general farming groups are in need of sound organiza-
tion, intelligently directed. The efforts already made to-
ward this end would seem to lend a hopeful outlook to the
future. Collective action, directed by intelligence and made
vital by loyalty, can, and we believe will take our producers
tar along the highway of progress.





COOPERATIVE AGRICULTURE


ORGANIZING FARMERS FOR BUSINESS

By T J BROOKS, Assistant Commissioner of Agriculture

The farmer is a manufacturer. The soil, atmosphere,
sunshine and showers are the material to which he applies
his skill, and from nature's laboratory is poured annually
into the channels of trade the materials from which is fed
and clothed the teeming millions of the earth.

The farmer is a business man The selling of his surplus
is the great paramount source of the world's commerce and
trade He furnishes 600.000.000 tons of food annually to teed
the nations of the earth.

The farmer is a consumer of the materials turned out
by the great urban industries. He interchanges his pro-
ducts with those of other lands till all the nations of earth
are linked together into one stupendous whole.

History is a voice forever sounding across the centuries
the interpretations of man Opinions alter, manners change,
creeds rise and fall. but the law of cause and effect is
written on the tablets of eternity.

To trace the law of cause and effect in the past for
future guidance is a task of civilization Present conditions
are the composite reflection of the operation of this law
Present tendencies are prophetic, and to properly interpret
is to be forearmed and empowered to direct the course of
history.

The farmer of today is going through a period of transi-
tion, economically, industrially and financially. How to
adjust his methods, habits, and business to the changing
order is one of the difficult problems of the day which he
alone can solve.

The consumer furnishes the demand for production He
pays for:
(1) Cost of production.





74 DEPARTMENT OF AGRICULTURE

(2) Cost of distribution.
(3) Profits of production.
(4) Profits of distribution.
(5) Waste of production.
(6) Waste of distribution.

The ability to consume is gauged by the power to earn.
When so much of the consumer's earning power goes to
defray the expense of waste his consuming power in cur-
tailed and the market he can furnish the producer is less-
ened. It behooves both the producer and consumer to
eliminate waste.

The best statistics obtainable inform us that production
and distribution are about equal factors in establishing the
retail price to the ultimate consumer. We know that this
can be greatly cheapened by the producer assuming a larger
share i the task of distribution along lines demonstrated
to be practical, efficient and economical by the larger dis-
tributing concerns of the leading nations of the world.

There are two general divisions of business methods:

(1) Individual

(2) Collective.

The individual method has been followed almost um-
versally from the very earliest to very recent times. The
development of modern machinery, the corporation and the
trust has eliminated this method in the larger affairs of the
business word. There is no individual distribution by
those who hire for wages. They do not own the things they
produce. The distribution is undertaken by the firm or
company owning the output. The workers in a shoe factory
think not of marketing the shoes they produce. This is
done by the factory owners, not as individuals either but
by distributors under the direction of the owners.





COOPERATIVE AGRICULTURE


The same is true of the manufacture of machinery,
furniture, vehicles, mining. etc. A railroad has se vice to
sell but the ones who perform the individual service on the
road or trains are not the ones who set the price This is
the work of the corporate body endowed by law with the
powers of personal entity.

When farming is done on the bonanza scale the same
process of marketing is followed: The individual worker
sells nothmg but his service; the corporation sells for all
the workers and pays a stipulated wage to them

When the ow nership and operation is on the small scale
the business is at a serious disadvantage in competing with
the larger business, both in power to handle a distributing
system and in economy of operation. This brings the farmer
of tomorrow face to face with the alternative of collective
marketing among the small farmers or gradually retreat
before the corporation farmer. The corporation has super-
ceded the individual in all othet lines. Even though cor-
poration farming is outlawed it will not do away with the
need of collective distribution.

We need only to study the cooperative movement, as it
is now progressing on both sides of the sea, to see its possi-
bilities and understand the details of its principles. What
we do is mostly a matter of choice but the consequences of
what we choose to do are meted out to us with cold precision
as destiny swings the pendulum of time.


CORPORATE BUSINESS

There are three methods of conducting corporate
business.

1. The ordinary joint-stock method;

2. The co-partnership or profit-sharing method,

3. The cooperative method.






76 DEPARTMENT OF AGRICULTURE

Let us take them up in the order named and study the
essential qualities of each The process of securing a
charter is the same in all three kinds.

The first was originally the only kind organized This
class has but one purpose: the welfare of the stockholder.
All net profits are considered the rightful property of the
stockholders. The voting power is lodged in the shares
The shareholders may vote for the board of directors or
other officers. The voting power may belong exclusively
to the holders of common stock or may extend to the pre-
ferred stock. It may have both preferred and common
or all may be common. It may have a voting board which
has all the voting powers. In either case the profits go to
the stockholders. Most of our industrial corporations are
of this kind. The defense of this type of corporation is that
those who assume the risk of failure and have their money
invested are due whatever returns the business may net.

The second class of corporations-the profit-sharing-
goes one step further and allows a certain percent of the
profits to go to the employes m addition to their wages,
the bonus to be pro rata, based on the salary or wages of
each. This is calculated to tie the employes to the company
and encourage the "spirit of the shop" till strikes will be a
thing of the past This plan is calculated to make the em-
ployes feel that they are getting a square deal and they will
have no desire to destroy the business that gives employ-
ment and gives them all that the profits will justify. This
plan is coming m favor with quite a few large employers

The third kind of cooperative corporation goes still one
step further and includes the three absolutely essential fac-
tors m the operation of any business' the stockholder, the
employee and the customer Neither is more important than
the other and neither should have all the benefits of success.
In the distribution of profits the cooperative corporation
hmits the profits that go to the stockholder just as profits
are limited to a bond holder. After paying expenses the





COOPERATIVE AGRICULTURE


stockholder is a preferred creditor up to the rate which is
established as the rate. Next comes the employes and
customers The employes get a certain percent pro rata,
based on the earnings of each. The remainder goes back
to those furnishing the business. If it is a mercantile busi-
ness the relund goes to the purchaser of goods in proportion
to value of purchases by members. Outside customers get
one-half the rebate of members. which may be credits till
they amount to a share, and then a share may be issued. If
it is a selling association commissions are charged to cover
expenses and a reserve, when this has reached a specified
standard the profits are returned to those furnishing the
shipments. to each according to the profits yielded by his
shipment.

In the control it is usually one man who votes regardless
of the number of shares owned In a few instances the
members vote according to the volume of business furnished
-so much business counting a vote. The same principles
apply whether the articles handled are eggs, poultry, live
stock, dairy products, fruit, vegetables, wheat, cotton or
what not. Farmers' Exchanges never deal in futures subject
to settlement by forfeiture of margins.
Below we give in definite form the difference between
the relationship that exists between the stockholders, the
employes, and the public when applied to the ordinary
corporation and that relationship when applied to the genu-
inely cooperative corporation.

NON-COOPERATIVE CORPORATIONS
There are five fundamental characteristics of non-coop-
erative corporations:
1. Organized and operated for profit to the promoters
and stockholders.
2. Grant each share a vote, or limit all voting to a
restricted class of stockholders-such as Common Stock,
Voting Board or Board of Trust, etc.





78 DEPARTMENT OF AGRICULTURE

3. Place no limit on number of shares an individual
or other corporation may own.

4. Place no restrictions on transfer of stock.

5. Distribute all net profits as dividends on capital
issued, whether the stock was paid for in cash-at par or
below par-in service or given away, or the profits may be
capitalized.


COOPERATIVE CORPORATIONS

There are five fundamental principles of cooperative
corporations:

1. Ownership of association by the producers of the
commodity handled, if agricultural.

2. Return on capital invested restricted to specified
rate of interest.

3. All net profits returned to members in proportion
to patronage.

4. One member one vote regardless of the number of
shares owned.

5. Option must be given the Association on all shares
offered for sale and all transfers must be approved by the
Association.

There is a policy often pursued that gives the coopera-
tive concern an additional competing power but which is
not an essential requirement in cooperation I refer to the
policy of retiring all outstanding stock from a sinking fund
provided from the profits, as the business will justify. The
California Fruit Growers' Exchange did this and many other
concerns following cooperative methods This eliminated
all dram from the treasury for interest on money invested,
which is quite an item in old line business. Many are
orgamzed without capital stock





COOPERATIVE AGRICULTURE 79

COPYING THE ECONOMICS OF BIG BUSINESS
All examples of successful cooperative business ex-
emplify the possibility of conducting the distributive end of
farming on the same principles that are followed by the
big industrial corporations and trusts without the monopo-
listic extoitions for the benefit of a few stockholding
exploiters.


Cooperation For Various Purposes
By T. J. Brooks, Assistant Commissioner of Agriculture
Cooperation has had many interpretations. It may be
exemplified m Productive, Commercial, Financial and
Social Life Cooperative undertakings may be based on
ideas of material profit only or on ideas of altruism or on
a combination of the two.
Social innovations are to be found in every age of the
world However diverse the systems and theories put for-
ward or vaguely expressed, the idea of associated effort
runs through them all. Whether expressed by ancient
philosophers, as in Plato's "Republic." or by modern think-
ers as in Bacon's "Nova Atlantis", by Moore's "Utopia";
by Harrlngton's "Oceana"; by Campanella's "City of the
Sun". Making experiments in accordance with theories
have been frequent during the last half century Most of
these experiments have come to grief. Impractical theories
may be so because they are unreasonable or run counter to
the public attitude of mind A scheme may be plausible,
reasonable, worked out logically-planned on the assump-
tion that the human family will act rationally-yet fall
because human beings so often utterly fail to act rationally.
The plan is impractical. though just and reasonable, if it
will not coincide with human conduct as influenced by
heredity and environment. The Essenes were communists
and held all things m common Christ was of this tribe.
The Apostles seem to have followed this plan in their early
collaborations. Examples of this kind of cooperative effort






DEPARTMENT OF AGRICULTURE


have not proven virile, permanent or capable of large
growth.
Adam Smith, Malthus, Ricardo and Spencer worked out
the theory of competition from the economic and mdividu-
alistic standpoint. Robert Owen, "the father of coopera-
tion," gave experimental expression to a means of escape
from the evils of competition by means of association on
mutual terms industrially. Dissatisfaction with existing
conditions has provoked various schools of thought which
involved radical changes m the social structure.
General economics treats of man's temporal well-being;
of production, distribution, consumption and agencies con-
trolling each Pure economics is the science of value, price,
exchange and markets. National economics has to do with
governmental policies and operations. Dynamic economics
is prophetic as it deals with economic tendencies as con-
trasted with conditions. Rural economics relates to the pro-
duction, distribution and use of agricultural wealth and the
forces of rural life. Urban economics covers the field of
urban concerns problems of orgamzed society as it exists
and in its potentialties. Political economics generalizes
all branches, with special reference to the influence of gov-
ernment on industry and society
Social science or sociology treats of the origm, history
and evolution of society; of ethnological forces, progress
of civilization and laws controlling human intercourse; the
development of government, marriage, law, custom, land-
tenure, caste and privilege, of domestic and international
social phenomena.
Cooperation is a phenomenon of social development. It
may come from (1) mobilization oi a religious sect brought
about by persecution from without; (2) a fraternity, (3)
a revolt against economic conditions, or, (4) constructive
efforts to escape unsatisfactory economic conditions.

We see the first exemplification m the religious colony,
the second in the numerous fraternities with which we are





COOPERATIVE AGRICULTURE


all familiar; the third group is seen in the labor unions, such
as Knights of Labor, the American Federation of Labor,
the miners' unions, etc.. and the Farmers' Alliance, the
Grange. the Farmers' Union, etc.; the fourth group is ex-
emplified in the cooperative enterprises for purposes of
production, distribution and finance.


Rural Credits In Foreign Countries
By T, J. Brooks, Assistant Commissioner of Agriculture
EUROPEAN BANKING SYSTEM

I. Commercial.
Governmental
Private.

II. Cooperative and non-cooperative credit systems
1. Land loans.
Landschaft: German.
Is merely a syndicate of land-owning borowers;
supervised and regulated by the government but
operated by the members; makes long-time loans on
mortgages, all land mortgages pooled and bonds
issued on them; bonds sold on open market; loans
repaid by amortization; both limited and unlimited
liability, with the former tendency; the Landschaft,
as are all other European cooperative associations,
exempt from taxation; loans to members only
2. Credit Foncier French
A non-cooperative, centralized institution, patt-
erned to a large extent after the Landschaft; gov-
ernment appoints principal offices as well as super-
vising and regulating same; debentures issued on
collection of mortgages, short-time loans and long-
time loans made. the latter being repaid by amortl-
zation; loans repaid at the option of the borrower
and equal amount of debentures recalled; limited
liability.






82 DEPARTMENT OF AGRICULTURE

3 Credit Agricole: French.
Created by the government in 1899; its organization
consists of the regional banks and the member
societies; membership subscribes capital and Bank
of France furnishes free five times this amount,
which is lent back to the members on long-time
land loans.
4. Direct government loans: Danish.
Government of Denmark furnishes $9 to every $1 of
the farmer's; England bought the big estates in
Ireland in order to sell them back to the small
holders; New Zealand also.

III. Personal Credit.
1. Rural.
Raiffeisen: German.
Local, independent, rural, cooperative, credit as-
sociation; funds for loans come mainly from de-
posits; the security is mostly character, less often,
other collateral, loans averages $100, use of same
must be meritorious; management is gratuitous;
operates in a restricted area; has marked social
merits.
2. Schulze-Delitzsch: German.
This type of bank is agricultural; has shares the
same as commercial banks and intended for short-
time personal credit to farmers.
3. Credit Agricole: French.
Short-time loans made on personal credit without
the amortization feature.

IV. Metropolitan.
1. Schulze-Delitzsch: German.
Same as Raiffeisen except; absolute business man-





COOPERATIVE AGRICULTURE 83

agement; is an urban bank-cooperative, has capital
stock; declares dividends, has paid officials, its
credit is either a loan or a discount on a trade bill of
exchange, loans are either straight loans or credit
limits within which a borrower may draw.
2. Credit Foncmir: French.
Makes loans to municipalities, corporations, and
workers, in certain industrial pursuits.





84 DEPARTMENT OF AGRICULTURE




Intermedite Credit For The Farmer
A Pamphlet Containing Questions and Answers on Intermediate
Credit as Provided for in the Agricultural Credits Act of 1923
and Essential Facts Showing the Need for It.


Prepared by the
U. S. DEPARTMENT OF AGRICULTURE


What is the Agricultural Credits Acts of 1923?
It is an act to provide intermediate credit for the farmer.
It enables the farmer to borrow for production and market-
ing purposes, for periods running from six months to three
years, depending upon the purpose for which the credit is
used It establishes 12 intermediate credit banks.

What is meant by intermediate credit?
Intermediate credit, as the phrase is commonly used,
means credit granted to farmers for terms longer than those
covered by ordinary bank loans, but shorter than those
for which farm mortgage loans are usually made. It is
based on personal and collateral security; that is to say, on
the character and standing of the borrower, and on com-
modities or other personal property pledged to guarantee
repayment of the money loaned Farm credit other than
mortgage credit, and running for terms of from six months
to two or three years, is properly spoken of as intermediate
credit.

What has been the source of intermediate credit in the past?
There has been no regular source of intermediate credit
in the past. Our banking system has grown up primarily to
serve industry and trade and has not been well adapted to
the needs of Agriculture. Farmers have consequently been





COOPERATIVE AGRICULTURE 85

obliged to seek intermediate credit by the makeshift plan
of renewing short-term loans from bankers or merchants


Why does the farmer need intermediate credit more than
other producers?

Compared with that of business men. the turnover of
the farmer is slow. Business men frequently turn their
stock two or three times a year. Loans of short maturity
therefore are suited to business needs. But crop growers,
with few exceptions, have only one turnover a year. Loans
obtained by them in the spring as a rule can not be repaid
conveniently until crops are marketed Even credit ob-
tained later in the season may be needed longer than six
months if the crop is to be marketed in an orderly way.
Livestock producers have a yet longer turnover than gram
growers. Farmers need longer-term credit than business
men owing to the nature of their work.


How are the Federal intermediate credit banks organized?
One such bank serves each Federal land-bank district
They are located in the same cities as the Federal land
banks, and have the same officers and directors They
operate under the supervision of the Federal Farm Loan
Board, just as do the Federal land banks.


What is the amount and source of the capital for the new
banks?

Each intermediate credit bank is entitled to capital from
the National Treasury up to $5,000.000 The secretary of
the Treasury is authorized and directed by the agricultural
credits act to subscribe the capital as it is called for by the
directors of the intermediate credit banks, with the approval
of the Farm Loan Board Only $1,000,000 each was asked
for by the banks when they were organized. Several of
them have since called for additional amounts.





86 DEPARTMENT OF AGRICULTURE

Does this mean that the total amount of loans and discounts
which the 12 banks may make can not exceed $60.-
000,000?
No. Each bank may issue collateral trust debentures,
or short-term bonds, based on discounted or purchased
farmers' notes and other agricultural paper. Such deben-
tures may be sold up to an amount not exceeding ten tunes
the banks paid-in capital and surplus. Proceeds of deben-
tures sales are available for making loans. On the basis of
the present total authorized capital of the 12 banks, their
maximum loaning power in $660,000,000.
How do the intermediate credit banks operate?
They discount farmers' credit paper for banks and other
financing institutions and for cooperative associations. This
means that these institutions may mdorse and turn over
their credit paper to the intermediate credit bank and obtain
the money tied up in the loan for the further extension of
credit to their patrons. The intermediate credit banks also
make loans direct to cooperative associations of agricultural
producers on the security of warehouse receipts or mort-
gages on live stock.
For what term may these banks make discounts or ad-
vances?
The minimum term is six months and the maximum
term three years For the present the Federal Farm Loan
Board has hmited the term of discount to nine months.
Borrowers, whether these be farmers' organizations or
banks, have the assurance, however, that renewals will be
made where the need exists and the security warrants
Loans made by intermediate credit banks are not based on
deposits which may be suddenly withdrawn, but on funds
obtained from the sale of securities with a definite maturity
At what rate are discounts and advances made by the in-
termediate credit banks?
Interest or discount rates charged may not exceed by
more than 1 per cent the rate paid on the last debentures





COOPERATIVE AGRICULTURE


sold An issue of debentures was recently sold at 4 per
cent Intermediate credit banks, therefore, can not now
charge more than 5/, per cent No credit paper may be
discounted for, or purchased from, any bank or other insti-
tution if the rate charged by that institution to individual
borrowers is more than 11/ per cent above the discount
rate. At present, therefore, the intermediate credit banks
can not discount any paper carrying an interest charge to
the farmer of more than 7 per cent.

Can an individual farmer borrow direct from the inter-
mediate credit bank?

No If the banks should loan to the farmer direct, the
cost of setting up machinery for this purpose would make
interest rates too high. The banks serve wide districts and
would find direct dealings with the individuals too expen-
sive.

Must farmers necessarily obtain credit from the intermedi-
ate credit bank through local banks or other existing
institutions?

No In most States they can form agricultural credit
corporations of their own to discount paper with the inter-
mediate credit banks. Such corporations must have a capital
of at least S10.000. Intermediate credit banks help in
forming such corporations Some of them have prepared
suggested articles of incorporation intended to comply with
State laws in their districts.

Can persons other than farmers from agricultural credit
corporations to obtain discounts from the new banks?
Yes Bankers or business men who wish to help the
farmers to obtain cheaper credit can form such corporations.
In fact, any group can do so Bankers in some cases may
find it desirable to conduct such credit corporations in con-
nection with their banks Several of the kind have been
organized.






88 DEPARTMENT OF AGRICULTURE

Is it the intention of the Agricultural Credits Act of 1923
that credit accommodation should be provided by new
local agencies rather than by existing banks or other
institutions?

The evident intent of the law is that existing credit
machinery shall be used as far as possible. It is desirable or
advisable to form new credit agencies only where the pres-
ent ones are inadequate or do not take advantage of the
new discount facilities. Improvement of existing credit
agencies, rather than their destruction, is the object of the
law.

Are these intermediate credit banks now in operation?

Yes. They were chartered and organized shortly after
the enactment of the law, and have been in operation
several months.

On what products stored and controlled by cooperative
marketing associations may direct advances be obtained
from these new banks?

The Federal Farm Loan Board has already approved
the following commodities, when properly stored, as secur-
ity for loans. Gram, cotton, wool, tobacco, peanuts, broom
corn, beans (including soy beans), rice alfalfa and red top
clover seeds, hay, nuts, dried prunes, dried raisms, and
canned fruits and vegetables. Other commodities will be
added to the list when the board has determined whether
or not in its opinion they can be stored so that warehouse
receipts based on them will be good collateral.

Is the service of the new banks to be measured solely by
the discounts and advances actually extended?
No. They are also valuable in that credit made available
by them encourages private financial institutions to extend
loans. Farmers' cooperative associations have often found
commercial banks willing to give credit on very reasonable





COOPERATIVE AGRICULTURE


terms as soon as advances have been promised and approved
by the intermediate credit banks. An association that has
been deemed a safe risk by an intermediate credit bank
has thereafter a better standing with private financiers.

How can additional information concerning the operation
of these banks be obtained?
Information about loans and discounts, or the organiza-
tion of agricultural credit corporations where such are
needed, can be obtained from the intermediate credit bank
m the district concerned.

Does the Agricultural Credits Act of 1923 contain any other
provisions for the improvement of intermediate credit
to the farmer besides those dealing with the intermedi-
ate credit banks?

Yes. There are four other important provisions:
1. The Federal reserve act is amended by increasing
the maximum term for which the reserve banks may dis-
count agricultural and live-stock paper from six months to
nine months.
2. The definition of agricultural paper is broadened to
include loans to cooperate marketing associations for grad-
ing. processing, packing, preparing for market, or market-
ing of any agricultural products handled for members.
3. The capital needed to make a State bank eligible
for admission to the Federal reserve system is reduced to
60 per cent of the amount required for national banks
in cities of corresponding size to that in which the State
bank is located. It is provided, however, that the State
bank must agree to increase its capital within a reason-
able time to the amount required of the national bank.
Country banks that take advantage of this provision will
greatly add to their ability to aid agriculture.
4. Privately financed and managed national agricul-
tural credit corporations may be organized under Federal






DEPARTMENT OF AGRICULTURE


charter. Such corporations must have a capital of at least
$250,000 and will be supervised by the Comptroller of the
Currency. Existing live-stock loan companies may reincor-
porate under the law.

Where are the intermediate credit banks located, and what
States are served by each of them?

The Federal land band and intermediate credit bank
districts, group of States comprising each district, and loca-
tion of each pair of banks are as follows:


STATES



Maine Massachusetts, Vermont, New
Hampshire, Rhode Island. Connecticut,
New Jersey, and New York.

Pennsylvania, West Virginia, Maryland,
Delaware, Virginia, and District of Co-
Jumbia.

North Carolina, South Carolina, Georgia,
and Florida

Indiana, Ohio, Kentucky, and Tennessee

Louisiana, Mississippi, and Alabama.

Illinois, Missouri, and Arkansas.

North Dakota, Minnesota, Wisconsin, and
Michigan.

Wyoming, Nebraska, South Dakota, and
Iowa.

New Mexico, Kansas, Colorado, and Okla
homa

Texas.

California, Nevada, Utah, and Arizona.

Idaho, Washington, Montana, and Ore-
gon.


Location of
Federal Land Bank
and
Federal Intermediate
Credit Bank


Springfield, Mass


Baltimore, Md.


Columbia. S. C.


Louisville, Ky.

New Orleans, La.

St Louis, Mo

St. Paul, Mmn.


Omaha, Nebr.


Wichita, Kans.


Houston, Tex.

Berkley, Calif.

Spokane, Wash





COOPERATIVE AGRICULTURE 91


The Agricultural Partnership
Perhaps the most important change in the farm situa-
tlon between 1932 and 1934 was that during that period
the farmers of America organized collectively to deal with
their collective interests

Cotton growers signed 1,026.514 adjustment contracts in
1933: their signature represented 73 percent of the total
cotton acreage.

Wheat growers signed more than 550.000 adjustment
contracts for the 1933-34 crop; their signatures represented
77 percent of the total area sown to wheat.

Tobacco growers signed approximately 275,000 adjust-
ment contracts for the 1934 crop, their signatures repre-
sented 95 percent of the tobacco acreage of the country.

Corn-hog farmers signed 1.000.000 contracts to be effec-
tive in 1934; their signatures represented more than 75
percent of the hogs in the country.


Economic Democracy In The Control
Associations
In many other countries where control of production
has been undertaken as a result of the depression, control
has been imposed from above. In the United States, produc-
tion has been adjusted by democratic procedure.

The county production control associations formed by
the signers of adjustment contracts are local expressions of
economic democracy. It is through these associations that
collective action can be taken to make farm output fit
available markets. It is through these associations that
farm opinion can be formulated as to what markets should
be made available to the American farmer, and what
methods should be followed in adjusting production to
them.





92 DEPARTMENT OF AGRICULTURE

The cash gains from this collective action are not its
only benefits The farmer who has had the experience of
crop control programs no longer thinks solely in terms of
his individual farm. He thinks m terms of the national
output of certain crops His part in that output remains,
and should remain, his first interest, but he now recogmzes
that his part is a part, inseparably related to a larger whole
That recognition is vitally important
Furthermore, the definition of parity price as a relation
between city-made and farm-grown commodities causes the
farmer to think of his own welfare as definitely related
to the welfare of the nonagricultural producers who with
him make up the American economic community. That
sense of community greatly widens the farmer's horizon, he
is becoming accustomed to assist in the formulation of
national economic policies





Livestock Co-Ops Began Big Business In 1923

Beginning with 1923, the sale of livestock by coopera-
tive agencies operating on the terminal markets has been a
big-business activity. In that year 23 farmer-owned organ-
zations sold nearly 10,000,000 animals for their patrons. In
addition, more than 100,000 animals were purchased to fill
orders Last year 40 cooperative sales agencies sold more
than 13,100,000 animals for livestock producers. In addition.
enough more ammals were sold for traders or purchased
on order to give a grand total of animals handled during
the year of 14,000,000, the largest number ever handled
through terminal market cooperative sales agencies. The
40 organizations accountable for the record-breaking figure
operated upon 33 different markets, reaching from Jersey
City to San Francisco and from St. Paul, Minn, to Fort
Worth, Tex The total business transacted by these agencies,
as measured in dollars, was in excess of $138,000,000.





COOPERATIVE AGRICULTURE 93


Ohio Equity

During the past eight years a total of $16,733 has been
pro-rated to patrons by the central organization on a total
business of $6,324,818.
The Ohio Equity Exchange Company was originally
organized November, 1918, as the Ohio Central Equity Ex-
change Company. The present company was formed in
1926, and acts as a sales agency for local farmers' equity
exchanges in the Lima district.



A net gain of 185 members during 1933, bringing the
total membership up to 1,963, is reported by the O. K. Co-
operative Milk Association of Oklahoma City The associa-
tion has members in 13 counties and sells through 10 special
distributors, besides scores of local stores Last year it
handled 1,939,893 pounds of butter, valued at $538,962.




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