MARKETING 



MARKETING 



2001 



keep in close communication with the main office. In 

 the snipping season, the agency will have representa- 

 tives at the shipping stations to assemble, inspect 

 and forward the carlots upon telegraphic advice from 

 the main office, who in turn are advised daily as to the 

 general market conditions and prospects by the selling 

 agency. 



Shipments started from the producing center to a 

 certain selling market may be diverted to some other 

 market upon instructions received from the central 

 office, and in this way an over or an under supply in 

 any market may be avoided. After the sales are com- 

 pleted, the returns are rendered to the grower through 

 the shipping agents. 



Such a distributing system effectively and honestly 

 operated will relieve the grower and local cooperative 

 association of the difficulty and expense of marketing 

 their crops, giving them their entire time for the details 

 of the production and packing. A large force of capable 

 selling agents to study the needs of many local markets 

 should be competent to assist in distributing large 

 quantities of produce in an efficient way. 



Cooperative associations. 



Groups of fruit- and vegetable-growers have formed 

 cooperative associations with the idea of securing better 

 results by working together in the packing, shipping 

 and selling of their products rather than by operating 

 independently. 



The cooperative idea and spirit were first and most 

 highly developed among the fruit-growers on the 

 Pacific coast and other western regions. This may be 

 accounted for because of the distance from the greatest 

 consuming centers, making large shipments necessary 

 from the standpoint of economy; the general uniformity 

 of the crops grown, and the fact that many growers 

 depend entirely upon one or two specific kinds of crops 

 for their income; and possibly that the western growers 

 might have been quicker to see the advantages of such a 

 scheme of marketing. 



Without question, more cooperative associations of 

 fruit- and vegetable-growers have resulted in failures 

 than successes, but the spirit of cooperation is strong 

 and may be said to be growing, and the mistakes of the 

 past are used to guide the future. 



A cooperative association should be a non-profit 

 organization. Membership should be open only to 

 actual producers, and when a member ceases to be a 

 producer he ought to be required to dispose of his 

 share in the association. Many organizations, standing 

 under the name of cooperative associations, are in 

 reality owned and managed by a few men (not always 

 growers) exclusively for profit. 



The organization of a cooperative association adapted 

 to the requirements of a body of fruit- or vegetable- 

 growers is not elaborate nor difficult. The growers who 

 desire to form an association may assemble and, after 

 choosing officers and a board of directors (frequently 

 five) from among their own number, are ready to select 

 a name for the organization, adopt a constitution and 

 by-laws and make rules and regulations respecting the 

 management of the association. Contracts should be 

 made between the association and every member, and 

 all obligations upon both sides specified. Membership 

 certificates or shares of stock are sold and the voting 

 power of the members arranged. This may be the same 

 for each member, but sometimes is based upon the 

 acreage of the member's crop, or the quantity of produce 

 shipped by him the previous season. 



The board of directors hire a general manager, 

 usually upon a stated salary, but in some cases for a 

 percentage of the gross receipts, or in a few cases, the 

 number of packages handled. His chief duty is to look 

 after details and enforce the regulations adopted by the 

 association. The board of directors usually decide 

 upon the ways of grading, packing, shipping, names of 



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brands and such matters (often methods of harvesting 

 and time of harvesting). It is thought that this will 

 lead to uniformity and attractiveness in the packed 

 product. 



The details of the management may vary with the 

 aim of the members and officers, the locality and the 

 commodity handled. There may or may not be a cen- 

 tral packing-house where the fruit of the members is 

 delivered for inspection, grading and packing. With 

 some fruits, as citrus, it may be imperative, but with 

 highly perishable fruits, as strawberries, it may be 

 very undesirable. Without a central packing-house, 

 packing must be done in the field by each member, but 

 more efficient inspection and grading is possible at a 

 central packing-house, and the result is that a more 

 uniform product can be prepared. When the packing 

 is done in the field by the individual members, the 

 inspection must be done by an inspector hired by the 

 association and under the direction of the general mana- 

 ger or board of directors. He usually does this work 

 at the loading-station, and obviously cannot do as 

 thorough work as could be done at the central packing- 

 house. In some associations the inspectors give demon- 

 strations and instructions to the members before the 

 crop is ready to harvest. When this is done, the require- 

 ments and desires of the. association are better under- 

 stood by the individual. This practice is especially 

 valuable at the beginning of a new organization, or 

 among new members. 



After the produce is properly packed and loaded into 

 suitable cars, it is forwarded to the marketing point. 

 The selling may be accomplished through agents em- 

 ployed by the association or be turned over to a com- 

 mission firm, a distributing agency or sold to a dealer 

 or consumer. Returns are made to the grower upon the 

 pro rata basis known as "pools." The price received 

 for all of the same kinds of produce shipped within the 

 specified time, a day, week, two weeks, month or season, 

 is "pooled." The operating expenses are deducted and 

 the remainder divided upon the basis of the amount of 

 each grade or brand of produce contributed by each 

 member. Differences and dissatisfactions may arise 

 over the "pool" system among the growers. The prod- 

 uce of one member may be sold in Minneapolis at a 

 much better price than was realized from the produce 

 of his fellow member in St. Louis. 



In addition to the advantages that may be secured 

 by disposing of produce through a successful coopera- 

 tive association, is the large and important feature of 

 the possibility of the management buying many sup- 

 plies needed by the association members in large quan- 

 tities, selling them to the members without profit. The 

 saving thus secured on some supplies and in some regions 

 is considerable and a strong argument in favor of a 

 cooperative organization. 



The reader who is specially interested in these asso- 

 ciations, should secure from them copies of their con- 

 stitutions and by-laws. These documents are now pub- 

 lished, as examples, in many reports and books. 



(a) A California organization. 



The California Fruit-Growers' Exchange is the 

 largest and most highly developed cooperative associa- 

 tion of fruit-growers probably in the world. The form 

 of organization is interesting and unique. About 12,000 

 fruit-growers of California are engaged in the produc- 

 tion of citrous fruits and over 60 per cent are members 

 of the California Fruit-Growers' Exchange, a coopera- 

 tive organization to provide facilities for these growers 

 to distribute and market their fruit. There are three 

 distinct divisions to the organization: (1) the local 

 exchange; (2) the district exchange; (3) the central 

 exchange. Each division has a clearly defined function 

 and all are intimately related. 



The local exchange. There are about 150 of these 

 local associations or exchanges located in the growing 



