ECONOMICS OF HORTICULTURE. 231 



leaves the orchard until it reaches the consumer there is no period but 

 that its value may rise or fall to the extent of profit or loss to the owner. 

 Now this risk is shifted for most part by grower and by consumer upon 

 a class of speculators — the commission men. The problem of distribu- 

 tion of product largely resolves itself into that of reducing risks in 

 accordance with the economic law that: '"Reduction of risks reduces 

 rates." 



How can this be done? Economists are well agreed upon the subject. 

 The risks may be reduced : First, By eliminating middlemen, who create 

 new risks for the sake of speculation, or b}' reducing their influence to 

 the minimum. This can best be done by co-operative marketing. Second, 

 By better transportation, refrigeration and cold storage facilities. 



With reference to the first factor. The history of the progress in 

 the distribution of live stock, grain, avooI, cotton and tobacco, in which 

 middlemen have been well nigh eliminated or their charges reduced to a 

 mere trifle, shows what can be done. Distribution of grains, includ- 

 ing all the expenses from standing crop to the consumer, costs about ten 

 per cent, of the price paid by the consumer. For fruit and vegetables 

 the cost of distribution from orchard and garden to the consumer, is 

 rather above fifty per cent, of the consumer's price. 



It should be said that there are reasons why the cost of distribution 

 is greater for fruits and vegetables than for the above farm staples. 

 They are more perishable; it is more difficult to handle them; and the 

 demand is not so steady for them. But half or more of what a man 

 pays for fruits and vegetables should not go to the distributing agents. 

 The margin between the amount paid by the consunler and the amount 

 received by the producer is too great and fruit growers are making every 

 effort to substantially and permanently reduce it. 



As I have said the chief of the ways of doing this is by co-operative 

 marketing for the most part through fruit unions. These are now to 

 be found in all fruit groAving centers, but have not attained the success 

 in the East that they have on the Pacific Coast. A comparison of Michi- 

 gan unions, of which there are several, with those of California, where 

 they have been most successful, making due allowance for the difference 

 in conditions, seems to show that we have in Michigan the following 

 difficulties to overcome: First, The volume of business in most cases is 

 too small. The cost of many items is as great for a small company as 

 for a large one, thereby greatly increasing the cost per individual in 

 the small union. The opposite extreme might, however, be quite detri- 

 mental. If an organization attempted to cover too much territory and 

 had a very large membership the varieties and the grades of the product 

 might easily become too varied. Second, It would seem from a compari- 

 son of salaries that our unions are not willing to pay for the best possi- 

 ble management. Fruit unions must compete with private enterprises in 

 which are ability, experience and no fear of hard work. Men with these 

 qualifications well developed must have good wages. It costs to organ- 

 ize and to hold the organization. A man must have tact and patience 

 to be a good organizer. The salaries paid in California for the presi- 

 dency are such that exceptionally able men are secured. For the largest 

 of these unions, The Raisin Growers' Association, the president receives 

 $12,000 per annum. Third, The soliciting feature has not been sufficiently 

 developed in our State, To secure the highest prices the good qualities 



