PROBLEMS OF COOPERATIVE MARKETING ASSOCIATIONS 35 



a single day in a local area. Pooling systems, therefore, tend to 

 become more complex: (1) When several kinds of products are han- 

 dled, (2) when there are several varieties of each product, (3) 

 several grades of each variety, (4) several sizes of each grade, (5) 

 when the length of pooling period is increased, and (6) when the 

 territory over which the system operates is extended. 



Many organizations are handling more than one commodity, each 

 of which must be pooled separately. Practically all associations 

 make separate pools of different varieties. Furthermore, associa- 

 tions further subdivide their pools into grades and in some cases into 

 sizes. Fruit and vegetable associations differ considerably with 

 regard to the length of the periods over which shipments are pooled. 

 Reports have been received from 478 associations indicating their 

 practice in this respect during 1922. Table 6 shows on a percentage 

 basis the practice of these associations with respect to pooling. 



As shown by Table 6, the number and percentage of associations 

 using pooling periods of various duration differ to some extent with 

 the type of commodity handled. With strawberries, for example, 

 one-day pools were the most commonly used, whereas the three-day 

 pools seemed to be in favor for watermelons. It is to be noted, how- 

 ever, that for all commodities as an average, and also in the majority 

 of the commodity groups, seasonal pools were the most common in 

 1922. 



PROBLEMS OF POOLING 



In deciding upon a system of pooling, it is necessary to avoid 

 any unfairness to growers who produce fruits or vegetables which 

 are better than the average. It is unfair also that a few members 

 should receive a price for inferior products which is based largely 

 on the superior products of other members. Therefore, it is neces- 

 sary to establish grade standards in order that each, member may be 

 paid in accordance with the quality of the products he delivers to 

 the association. 



It occasionally comes about, for various reasons, that returns for 

 second-grade products shipped by an association are higher than 

 those received for the first grade. For example, an association may 

 sell its fancy Jonathan apples in November, storing the choice grade 

 for sale in December and January. If the market advances in the 

 meantime, the results will be unfavorable to the growers who pro- 

 duced the fancy grade, and the production of high-quality fruit will 

 be discouraged to a greater or less degree. 



To avoid this condition, certain associations have adopted a system 

 of pooling known as " economic value pooling." Northwestern 

 apple-marketing associations are particularly interested in this sys- 

 tem. Returns for a certain commodity and variety, for example 

 Jonathan apples, are averaged for all shipments and all grades. 

 Then a series of differentials are set up in order to arrive at the 

 price to be paid the growers for the fancy, No. 1, No. 2 and other 

 grades. Several factors may be considered in arriving at these 

 differentials: (1) An arbitrary differential, representing the opinion 

 of the management as to the relative value of the various grades, 

 (2) the returns received for different grades of the variety sold at 

 the same time or on the same market and (3) the average returns 



