XII. Problems of Transition to Tank Truck Assembly 



1. Incentives to Change 



In Maine, New Hampshire, and 

 Vermont — a region where big dairy 

 farms are scarce — milk dealers take 

 the initiative in the change to bulk 

 assembly of milk. The producer's in- 

 vestment in a farm storage tank and 



- commonly in this region — the 

 trucker's investment in a tank truck 

 are essential to the dealer's change- 

 over to the receiving of milk in bulk. 

 But the producer's and trucker's de- 

 cisions to invest in this costly equip- 

 ment are, as noted earlier, results of 

 a dealer's decision. This may come 

 about because the dealer is aware of 

 such a system's economies to him- 

 self. Or it may be that, when one 

 dealer has taken the lead in con- 

 version and thus starts a new compet- 

 itive effort at getting the more satis- 

 factory producers and more favor- 

 able routes, other dealers will need 

 to convert, regardless of their pre- 

 vious views on the matter. The latter 

 dealers then, in turn, provide the 

 producers and truckers with incen- 

 tives for change. 



This dealer initiative may take 

 several positive forms, apart from 

 the negative one of eventually refus- 

 ing to receive milk in cans. An effort 

 is made to convince producers of the 

 farm economies or convenience from 

 conversion. Milk dealers may offer 

 financial assistance in the purchase 

 of the farm tank. For example, deal- 

 ers may co-sign notes for tank pur- 

 chases and guarantee transfer of the 

 notes in case the tank is sold. Dealers 

 may organize quantity purchases of 

 tanks at a discount rate. Milk dealers 

 may guarantee a return to truckers 

 so that a reduced transportation rate 

 can be offered to producers. Dealers 

 may offer quality premium payments 

 for milk held in farm tanks over milk 

 received in cans. Each of these pro- 



cedures has been used in Northern 

 New England by co-operatives or 

 proprietary dealers or both. 



2. Financing the Purchase 

 of the Farm Tank 



Producers, however, are still faced 

 with the basic problem of financing 

 the farm bulk milk tank. This can 

 be done through the local bank, or 

 the Production Credit Association or 

 through a finance company as pro- 

 vided by the equipment dealer. The 

 payments may then be deducted from 

 his milk check or by whatever ar- 

 rangement is convenient. The cost, 

 less any savings to the farmer through 

 reduced transportation charges, must 

 be absorbed in the farm expenses. 



A farmer with heavy indebtedness 

 due to previous capital or machinery 

 purchases may face difficulties of ob- 

 taining the necessary credit just as 

 would farmers with poor credit stand- 

 ing in the community. These pro- 

 ducers may be left behind in the 

 transition to bulk assembly either be- 

 cause they are unable to obtain addi- 

 tional credit or for other reasons. 

 Some producers were already finding 

 it necessary to refinance their entire 

 farm under one package deal in order 

 to change to bulk assembly. 



3. Farm Plans 



The plans of the operator must be 

 reviewed before additional invest- 

 ment is made. His age and the lack 

 of family or other labor may encour- 

 age the adoption of labor saving 

 equipment such as the farm tank, or 

 the initial cost may force him to re- 

 tire from production if this is his 

 only alternative. 



There may be necessary alterations 

 to or relocation of the milk house. 

 The yard or the farm lane may have 



43 



