30 BULLETIN 1414, U. S. DEPARTMENT OF AGRICULTURE 



as, for example, a season pool for oranges, it is customary to make 

 advance payments to members from time to time, as collections 

 are made. These payments are always kept within safe limits so 

 that the growers receive, prior to final settlement, only a percent- 

 age of the estimated net returns for the pool. 



A few associations, dried- fruit organizations particularly, pay 

 their members a portion of the estimated market value of the crop 

 at the time it is delivered. Money for this purpose is borrowed, as 

 a general rule, although the associations' reserves may be drawn 

 upon. The dried fruit associations finance these advances by bor- 

 rowings, using warehouse receipts for the stored product as col- 

 lateral. Fresh fruit and vegetable associations may deposit drafts 

 on buyers with local banks. Apple-marketing associations in the 

 Northwest sometimes receive advances from storage companies in 

 the terminal markets who hold the fruit in their warehouses until 

 it is sold. 



Advances to members on delivery of the product by fruit and 

 vegetable associations is not generally practiced, however. The 

 perishable nature of the commodity makes storage for any consider- 

 able period impracticable, except for dried fruits, apples, potatoes, 

 cabbage, and a few other products. Large quantities of these 

 products are sold during the early part of the marketing season. 

 Usually sufficient funds accumulate so that it is possible to make 

 an early partial payment to members. 



PRODUCTION CREDIT 



Advances to members for the purpose of financing the produc- 

 tion of a crop are not commonly made by fruit and vegetable as- 

 sociations. The Florida citrus growers have a loan corporation, 

 affiliated with their cooperative marketing agency, that indorses 

 growers' paper, under satisfactory conditions. Loans are usually 

 made by local banks on the security of the loan corporation's in- 

 dorsement. A few marketing associations perform a somewhat 

 similar service for their members in exceptional cases. 



L'p to the present time, the fruit and vegetable associations, with 

 the exception of associations that handle peanuts and potatoes, have 

 been unable to store their products under the regulations of the 

 United States warehouse act. The receipts of warehouses licensed 

 and regulated under this act are, as a rule, more easily negotiable 

 than those of unlicensed warehouses." 



Successful cooperative associations, it is found, have not followed 

 any one plan in financing their investments and operations. They 

 have employed the means that appeared best suited to their par- 

 ticular needs, and have used conservatively and carefully the credit 

 facilities offered them. 



ACCOUNTING RECORDS 



An important cause of business failures in recent years has been 

 a lack of accurate and detailed information concerning the business. 

 The only reliable source of information concerning business opera- 

 tions is the records kept of them, and the importance of proper 

 records as an aid to successful management deserves more considera- 

 tion than is ordinarily given the subject. 



