174 



SCIENTIFIC AGRICULTURE 



April, 1921. 



uot more than 5 p.c. of the produce can be handled in 

 this way. 



Wheat, cattle and certain other farm produce can- 

 not be marketed in any part by the direct method, and 

 the opinion is expressed that the few products that are 

 now marketed to some degree in this way would be 

 better sold through the local associations. 



(2) The second system of marketing is through the 

 regular channels; that is, by encouraging private mid- 

 dle-men to perform the marketing services. Under 

 this system the private middle-man performs the ser- 

 vice of assembling, and expects wages for the service 

 rendered : another middle-man does the processing, 

 and expects wages for the service rendered ; another 

 man does the grading, and expects wages for the ser- 

 vice rendered, and so on to the broker, wholesaler, 

 jobber and retailer, each one in turn being paid for 

 the service rendered, and possibly also paid a fair pro- 

 fit on the transaction. This is the waj' business is done 

 ordinarily. 



(3) The third system for want of a better name may 

 be called "The Integrated System". (Prom circular by 

 Dr. Mackliu, University of Wisconsin). This is the sys- 

 tem used very largely by the large packing companies. 

 No one company in particular can readily be referred 

 to ; but the methods are sufficiently well known to us 

 all to give a fair understanding of the situation when 

 their methods are commented on. The packing com- 

 pany may send its representative into the country to 

 purchase stock. This man assembles at a shipping 

 station. The company slaughters, processes, chills, 

 stores, finances and sells. The company may sell 

 through the regular channels, but more likely will fol- 

 low the practice of some of the American companies, 

 and establish local distributing houses in some of the 

 larger cities; these in turn distributing to dealers or 

 retailers. 



In British Columbia a packing company jierforms 

 every service from the purchase of the animal on the 

 farm to the cutting up of the animal as pork or beef 

 in the retail store. And it maj- me argaed that the 

 company reaps a profit on each of the marketing ser- 

 vices; or it may be argued that by sacrificing the pro- 

 fits on one or two of the .marketing services the work 

 can be performed more cheaply and efficiently. This, 

 undoubtedly, is the cheapest wa\' of marketing, but 

 makes it impo.ssible for the small packer, small retailer 

 or small business man in many eases to compete with 

 the larger oi-ganization. But the system is effi- 

 cient. This is the sy.s^tem that is employed also 

 by some of the large co-operative associations, 

 only in a le.sser degree, for instance, the leading 

 fruit shippers association of this Province. Fruit 

 growers must assemble the fruit at the packing house. 

 The fruit is graded, packed, loaded, financed, stored 

 and sold either by the local association or by the sell- 

 ing body appointed for this purpose. In one case also 

 brokerage firms have been established by the growers 

 in some of the leading cities in the Canadian North- 

 west. In other words, they are employing to some de- 

 gree the method employed by the packers. The 

 largest milk producers association may be taken as 

 another example. In this ease all services are per- 

 formed by the association from the assembling of the 

 milk at the shipping station to the delivering of the 

 milk to the cities of New Westminster and Vancouver. 



The greatest difference, however, between the pack- 

 ing companies and the associations mentioned is that 

 in the first ease a few men who own stock in the com- 



pany are paid dividends, and may make comparatively 

 large profits, whereas in the second instance all pro- 

 fits go directly into the pockets of the original pro- 

 ducers of the article. At the same time the consumers 

 are saved tens of thousands of dollars because of the 

 efficient rendering of the marketing service. Such 

 concerns properly controlled undoubtedly render the 

 public valuable service. 



It should be pointed out that middle-men have no 

 invested interests. They perform .services, and are 

 paid for them. When they no longer render efficient 

 services they are forced out of business. The same ap- 

 plies to the original producer. If your money is in- 

 vested in the production of sugar beets, and sugar can 

 be produced more cheaply from sugar canes, you are 

 the loser. This seems to indicate some conflict be- 

 tween personal interest and general social interest; 

 but it should be recognized that the individual is usu- 

 ally sacrificed to the public interest in so far as busi- 

 ness is concerned. 



The above, I believe, sets forth in a few words the 

 general business principles underl.ving co-operative 

 marketing. The association to be markedly success- 

 ful should control 75 p.c. to 90 p.c. of the product ; and 

 growers must be persuaded that from three to five 

 year contracts are not only in the interests of the as- 

 sociation, but in their own interests also. The busi- 

 ness can be organized on economic lines only when the 

 product is guaranteed over a stated number of years. 

 The business must be so organized that prices are stab- 

 ilized and home markets are to a fair degree controlled 

 in so far as open competition will permit by the origi- 

 nal producers of the product. This protects both pro- 

 ducer and consumer. The strength of the successful 

 associations of today is found no less in the delivery 

 of a standardized product at lowest possible cost to 

 the consumer than in the cash returns to the original 

 producer due to large and efficient business organiza 

 tion. 



I have tried in a general way to show : 



(1) That by using the integrated system of market- 

 ing there is a possibility of reducing the profit on the 

 marketing services or j'jerforming them at cost. 



(2) That under the commercial sy.stem of to-day it is 

 a large volume of business with one over-head that to 

 a great degree makes possible efficient marketing. 

 This docs not infer monopolistic control. 



The farmer is entitled to the same rights and privi- 

 leges as other business organizers of the country. By 

 exercising these rights through an efficient marketing 

 system he is in a position to render a large service to 

 himself and the consuming public. The consuming 

 public is demanding the standard products at a lower 

 ]>riee. 



DOMINION ELECTION. 



Ballots were mailed to every member of the C.S.T.A. 

 on Saturday, April 9th, and the time for the return of 

 these expires on April 30th. On May 2nd, at Ottawa, 

 these ballots will be opened and counted by Mr. Ronald 

 Iloojier, Honorary Secretary of the Proportional Re- 

 presentation Society of Canada, who will be assisted 

 bv the Honorarv Secretarv and General Seeretarv of 

 the C.S.T.A. 



The results of this election, giving the names of the 

 new President, First Vice-President, Second Vice-Pre- 

 sident and Honorarv' Secretary who will take office at 

 the June Convention, will be promptly announced 

 through the Associated Press. 



