IN FOOD DISTRIBUTION ii 



these associated producers and the ordinary agencies of 

 distribution, though such cooperation may exist. 



Even in the second sense, however, the term "coopera- 

 tion" has several meanings. For instance, it sometimes 

 refers to voluntary unincorporated organizations, some- 

 times to capital stock associations of producers, sometimes 

 to corporations formed under State laws which permit 

 non-profit organizations without capital stock. When the 

 form of association is the ordinary stock corporation it is 

 evident that through the sale of shares ownership in the 

 so-called producers' organization may pass to non-producers 

 whose interest in the corporation rests on expected divi- 

 dends from stock which they hold rather than from econ- 

 omies in the handling of their crops. Mr. Powell's caution 

 as to the application of the term is therefore pertinent : 



A cooperative organization, therefore, is not a corpora- 

 tion in which the capital is contributed primarily in order 

 that it may earn a profit; nor one composed of producers 

 and non-producers ; nor one in which the producer's product 

 is handled by a corporation for the benefit of the stock- 

 holders rather than for that of the members; nor one in 

 which the membership is not under the control of the or- 

 ganization; nor one in which the members do not actually 

 control the organization. It is an association of farmers 

 who unite in an effort to handle their common interests 

 through an agency which is controlled by them on the 

 principles of an industrial democracy, and exclusively for 

 their benefit.* 



The principles on which cooperation among producers 

 for the common marketing of their products is based are 

 few and simple. While a living and developing form of 

 social and economic organization is incapable of being 

 neatly classified and pigeonholed, some attempt must be 



* Powell : "Fundamental Principles of Cooperation in Agriculture" ; 

 University of California, College of Agriculture, Circular No. 123, p. 2. 



