THE T. A. A. RFCORt) 



■;U- 



Page Tfine 



se 



:h 



ly 



IS 



sure to bring a flood of production that 

 w.ill defeat the attempt and bring dis- 

 aster to the producer. 



Old System Wasteful 



The old speculative system of distri- 

 bution has been proved often times 

 wasteful and inefficient. It has often 

 failed to pay the producer a living price 

 for his products and at the same time 

 the consumer has often had to pay high 

 prices. On the other hand, it has been 

 demonstrated that in many cases where 

 producers are organized into effective 

 co-operative sales organizations they 

 have been able to prosper and at the 

 same time not to put a burden on the 

 consumers of the country. That which 

 makes this seeming inconsistency pos- 

 sible is that through co-operative or- 

 _ ganization producers are able to effect 



^ many savings in wastes and improper 



charges between the producer and the 

 consumer which are reflected in a larger 

 percentage of the consumer's dollar be- 

 ing returned to the producer. 



Let us consider for a moment some 

 of the things that may be accomplished 

 through effective co-operative organiza- 

 tion of producers. First is the elim- 

 ination of the element of speculation in 

 the product of the farmer at the point 

 of production. Until the farmer is or- 

 ganized and is in position to collectively 

 bargain for the sale of his product he 

 has to take the best price he can ob- 

 tain from commercial buyers, who, of 

 course, are in business to buy as cheap- 

 ly and sell as dearly as they can. The 

 result is that the farmer on account of 

 lack of knowledge of quickly changing 

 markets and inability to protect himself 

 against manipulation of markets does 

 • not get the full value of his product. 



Too Many Middlemen 



Most farm products are bought and 

 sold by commercial operators at the 

 point of production. The number of 

 these operators in most commodities is 

 very large. Each buys, packs and dis- 

 tributes without much knowledge of 

 the other's operation and the result is a 

 disorderly unscientific distribution, 

 which often results in demoralization 

 of markets, gluts and famines, and 

 losses to the wholesale distributing trade 

 as well as to farmers. It is not un- 

 common to have a demoralized wholesale 

 market which is quickly reflected back 

 to the producer and still not affect ap- 

 preciably the retail prices to the con- 

 sumer. In other words rapidly chang- 

 ing markets due to poor distribution 

 often make losses to producer, shipper 

 and wholesale dealers that are not re- 

 flected back to the consumer in lower, 

 prices. On the contrary, particularly 

 with annual crops such as fruits and 

 vegetables, the producer following years 



of disastrous prices often becomes dis- 

 couraged and does not plant sufficiently 

 to take care of the demand the succeed- 

 ing year and the result is high consumer 

 prices. To put it in another way, it is 

 better for both the producer and con- 

 sumer to iron out the peaks and valleys 

 in prices by a more uniform supply 

 brought about by orderly marketing 

 and production. 



Co-Operation Cuts Cost 



If the producer is organized so that 

 he can control, through co-operative 

 marketing organizations, a large per- 

 centage of the product of his industry 

 he can properly distribute so as to 

 place on the market the maximum 

 quantity that the m.irket will take and 

 maintain a reasonable price. Through 

 control of a large volume his cost is 

 low. He can largely eliminate the losses 

 and sometimes unreasonably large profits 

 of commercial operators at point of 

 production. He can adopt and enforce 

 standards of grade and quality, which 

 are impossible under other conditions 

 and which benefit the consumer. He 

 can spread the cost of national adver- 

 tising over a large volume at a low per 

 package or unit cost, thus keeping the 

 consumption of his product in pace 

 with increasing production. He can 

 collectively handle railroad claims and 

 rate questions and even make proper 

 representation on tariff matters. In 

 short, through co-operative action he 

 can eliminate speculation, distribute 

 efficiently at low cost and eliminate 

 many of the wastes and unnecessary 

 costs between the producer and the con- 

 sumer. 



The Loaf of Bread Legend 



ONE of the ardent detractors of the 

 federal farm aid program recently 

 laid eloquent stress on the fact that back 

 in 1921 the grain dealer and flour miller 

 combined got only 3.4 cents oat of 

 every dollar the housewife paid for 

 bread; whereas the farmer got 28.1 

 cents out of the same dollar. 



Figures such as these are rather use- 

 ful in helping to perpetuate the myth 

 concerning the efficiency of the grain 

 trade. They are enough to convince 

 an unthinking person that the grain 

 trade operates on a very narrow mar- 

 gin indeed. Three and four-tenths per 

 cent is little enough to pay for such 

 services as they render. 



The fallacy in this line of figuring, 

 of course, is that neither the farmer nor 

 the grain dealer deal in bread. Their 

 commodity happens to be wheat, and 

 the bread figures, adapted to a bushel 

 of wheat, tell an entirely different story. 



Thus from $6.50 worth of bread 

 (which is the amount secured from a 



bushel of wheat) the dealer and miller 

 in 1921 got 22 cents plus about 22 

 cents for bran. In other words, the 

 dealer and miller got 44 cents on the 

 bushel of wheat the farmer sold for 

 $1.82. Instead of three and one-half 

 per cent, the dealer's and miller's gross 

 profit on handling the wheat was about 

 2 5 per cent. 



Today, on 90 cent wheat, the dealer 

 and miller still make about 44 cents, 

 according to the "bread figures." Their 

 combined profits are almost ,50 per cent. 



In refuting these figures the grain 

 trade advocate might state that the 

 miller gets a large share of this 50 per 

 cent; and that we are using a wrong 

 basis for figuring. Ver\' well, then — 

 who started using these "bread figures" 

 in the first place? — Allen Sandy. 



Discusses Grain Marketing 



(Continued from page 4) 



once they come to understand the mo- 

 tives and purposes of those responsible 

 for such propaganda. 



"Those selected by the farmers to ad- 

 minister the affairs of the Illinois Grain 

 Corporation will find their full time 

 needed in constructive activities. I 

 hope they will not be led astray by 

 attempts to answer malicious propa- 

 gandists, but will rest content in steer- 

 ing a straight course to the end that 

 the grain producers of Illinois will re- 

 ceive the fullest possible benefits from 

 the Illinois Grain Corporation. 



"The I. A. A. has been similarly at- 

 tacked by selfish interests in and dur- 

 ing the development of other commer- 

 cial services by the organization. In 

 every case it has been found that by 

 following a straight course and confin- 

 ing our full time and attention to the 

 welfare of those participating in the 

 program, has been much more success- 

 ful and certainly more meritorious than 

 by dividing our time in attempts to an- 

 swer baseless charges. The success of 

 the I. A. A. in developing these services 

 has in large part been due to the in- 

 terest manifested and the support given 

 by the farmers of the state. So it will 

 be with the Illinois Grain Corp>oration. 

 It will move forward just to the extent 

 that the farmers, whom it is intended 

 to serve, respond with that zeal and de- 

 termination that has been so character- 

 istic of them in the past. 



"The Illinois Agricultural Association 

 believes in its soundness, accepts full 

 responsibility for the principles upon 

 which it is founded; and to its last man 

 will give every possible suppKjrt to those 

 charged with the direct responsibility 

 of handling the affairs of the Illinois 

 Grain Corporation." 



