PROBLEMS OF COOPERATIVE MARKETING ASSOCIATIONS 7 



erally feel that if the association handled a larger proportion of 

 the iocal crop, it would be possible to reduce operating costs and 

 stabilize the market for the products the association has to sell. 



The volume of business handled by an association often determines 

 its success or failure. A study of organizations that have gone out 

 of business shows that " insufficient volume of business " was the sole 

 or was a contributing cause of failure in almost half of the cases 

 reported. In general, the business handled by an association must 

 be large enough to permit the performance of the services required 

 at a per unit marketing cost comparable to that of private dealers. 

 Table 4 shows that the business of many fruit and vegetable asso- 

 ciations permits only a small expenditure for marketing services. 



Table 4. — Percentage of fruit and vegetable marketing organizations in the 

 various volume of business classifications 



[Based on reports from 585 associations] 



Group 



Percent- 

 age in 

 each 

 group 



Group 



Percent- 

 age in 

 each 

 group 



$20,000 and under . . 



25.5 

 12.1 

 8.5 

 6.7 

 6.3 

 3.1 

 4.1 

 4.3 



$160,001 to $180,000 



1.9 



$20,001 to $40,000 ... 



$180,001 to $200,000 



1.7 

 8.2 

 3.4 

 4.6 

 5. 1 

 4.5 



$40,001 to $00,000 . - 



$200,001 to $300,000 



$60,001 to $80,000 



$300,001 to $400,000. _•_ 



$80,001 to $100,000 



$400,001 to $500,000 



$100,001 to $120,000 



$500,001 to $1,000,000 . . 



$120,001 to $140,000 



Over $1,000,000 



$140,001 to $160,000 







The information at hand indicates that a larger percentage of 

 fruit and vegetable associations are doing a smaller volume of 

 business than are either the cooperative creameries or the grain 

 organizations. It is reasonable to conclude that there is some re- 

 lationship between the volume of business handled by a cooperative 

 association and the probable life of the organization. 



Local fruit and vegetable associations that handle but one crop 

 generally have an insufficient volume of business. This handicap 

 can be minimized in some cases by handling a larger variety of 

 fruit and vegetable products. The condition is being corrected 

 slowly by grouping small local organizations in federations, or 

 by forming large associations that cover sufficient territory to as- 

 sure an adequate volume of business under normal conditions. 

 The business of all fruit and vegetable organizations that gave 

 information on this point, arranged by commodities, is shown in 

 Table 5, and Figure 2 shows the business of fruit and vegetable or- 

 ganizations arranged by geographical groups. 



Over a period of years, successful cooperatives are increasing 

 their volume of business. In 1913, 67 fruit and vegetable organi- 

 zations reported that they marketed products valued at $16,769,000. 

 The same organizations reported their total 1922-23 business at 

 $36,526,000, showing an increase of 117.8 per cent in nine years. 



