The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1921-05-04
CONCERl
RAIIVE -,IAhhEI.4
The Principles OF Cooperative
Marketing.

Clemson College, April 30.-The
United States bureau OF markets re-
ports that there are about fourteen
thousand farmers buying and selling
organizations scattered throughout
the United States (Farmers' Bulletin
l1i4). From this it is evident that
American farmers are awake TO the
necessity Of their taking a hand in
the business of distributing their pro-
ducts. Some OF these buying and sell
ing organizations are cooperative,
that is, they are organized without
capital stock and pay no stock divi-
dends, all proceeds less costs being
prorated among the members accord
ing to the amount Of business done
through the organization. Others :Lre
stock company organizations, and the
farmers who own stock receive mar
ket prices for their products, Plus
stock dividends provided the organ
ization makes profit. This kind of
farmers organization is very similar
10 an ordinary corporation and is of
title value from the growers stand
point for the reason that its prime
object is to pay its stockholders divi-
dends On capital stock. Like other
corporations, it tries to buy as cheap
ly as possible and sell as high as pos
sible.
Combination Stock and Patronage
Companies.
Some of these organizations COM
bine in va, ways features Of both
the stock company dividena-paying
organization and the non-stock, pure
~ cooperative associations. For ex-
ample some Of them limit the divI-
dends payable on stock to or per
cent and provide that any profits
realized above such percents shall be
paid out to the farmers who buy or
sell through the organization. The
amounts thus paid out to patrons are
called patronage dividends. The pay
ment OF patronage dividends is based
on the premise that patrons are rs
necessary to the success OF an or
saniZation as is capital stock and
therefore entitled TO receive q share
OF the profits. realized in the market
ing operation.
Pure Cooperative Marketing.
Pure cooperative marketing. on the
| other hand, means the taking over Of
the marketing process or OF certain
parts of it by growers on q basis of
equal risk and equal profits. No cap
ital stock is necessary under this
| plan and all receipts from sale of pro-
ducts Less costs of selling, are return
ed to growers in payment for the
products marketed.
Thus we see that the thousands OF
farmers buying and selling organiza-
tions throughout the country make
Use of the principles Of cooperation in
every possible degree Of variation
from the pure cooperative plan to
the ordinary stock corporation plan.
Six Principles Briefly Explained.
The six main principles underlying
the successful marketing Of farm
products on the purely cooperative
plan may be stated as follows:
"a The basis Of such association
shall be single crop or commodity
! and not q combination Of crops which
are marketed in unlike manner. Meth
or is the association organized mere
| ly by counties Or other political dl-
vision but rather over the entire ter
ritory where the particular commod-
! ity is produced.
! (o) Membership is limited to
growers and to landlords who receive
q part Of the crop as rental.
t3) Each member enters a bind
! ing contract with the association
agreeing TO turn over to the associa-
ton for its resale value all OF the
commodity which comes into his pos
session as a grower The association
! markets tha, commodity for nobody
| except members.
CD The commodity is all graded
and each grade is marketed as
pool" The members all receive
the same price per unit for the same
grade Of product.
90 Competent market men who
have had practical Successful expert
once in marketing the particular
commodity are employed by the as
.sociation to handle the marketing
work of the association. Such mar
keting work is not a job for amateurs.
{6) Such an association is set up
and operated on the basis of the crop
contracts and without capital stock
! 1t is, therefore, a non-stock and non
t dividend paying association.
The next article Of this series Will
explain in more detail the crop con-
tract.