PROBLEMS OF COOPEEATIVE MARKETING ASSOCIATIONS 21 



A small volume of business usually will not permit many services 

 to be performed. Many cooperative organizations have found 

 themselves in this situation. A large proportion of the organiza- 

 tions handling single commodities are doing a volume of business 

 of less than $25,000 per year. This amount is not sufficient to per- 

 mit a competent manager to be engaged without making the neces- 

 sary overhead expense burdensome. Many other possible services 

 must be omitted in such circumstances, and the manager called upon 

 to perform the duties of manager, packing foreman, salesman, 

 bookkeeper, and other functions. 



In addition to these general problems, certain special problems 

 of organization are encountered by associations already in operation. 

 Difficulties arise, for example, because of the improper division of 

 functions in certain federations between the local associations and 

 the central agency. 



This problem is due largely to the structure of the organization. 

 In many federations of the decentralized type, too much power has 

 been retained by the locals, and the authority delegated to the 

 central organization is insufficient to permit efficient operation. 

 Such conditions as: (1) Lack of central control over grading and 

 standardization, (2) lack of control by the central over the time 

 and conditions of sales, (3) lack of contracts between locals and 

 the central, are due to improper organization and they detract 

 from efficient operation. 



In some of the highly centralized federations, so much of the 

 power and functions of operation are in the hands of the central 

 organization that the locals have practically no business functions. 

 In such cases, the local associations find it exceedingly difficult to 

 maintain the interest of their members. This condition not only 

 weakens the system of representation, on account of the failure of 

 many members to vote, but also destroys much of the value of the 

 local as a forum for the discussion of policies. Either extreme 

 is detrimental to successful cooperation. The aim should be to grant 

 the central the power necessary to control the operation of the va- 

 rious functions with efficiency but to retain wherever possible, in the 

 locals, the functions that can be performed at the shipping point in 

 order to sustain the interest and responsibility of the members. 



The proper time to settle questions of this nature is prior to 

 organization. A few communities, in late years, have appointed 

 committees to make thorough studies of their particular situations. 

 Such studies have generally determined: (1) The marketing im- 

 provements needed, (2) how much improvement best could be 

 brought about, (3) the possibilities of organizing an association 

 from the standpoint of volume of business available, (4) the form, 

 type, and other details of the organization best adapted to the 

 needs of the particular situation. 



MEMBERSHIP CONTROL 



Safeguards calculated to prevent control from passing into the 

 hands of a few individuals are included in the by-laws, the articles 

 of association, and are frequently a part of the cooperative law under 

 which the associations are incorporated. Associations formed with 



