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turers. It is necessary that the new cooperative association be formed 

 on the basis of rendering service both to the grower and to the 

 manufacturer. Economical and efficient handling of large volumes 

 of tobacco from the time the grower delivers his tobacco to the time 

 and place the manufacturer takes it should be the prime purpose of 

 this farmers' organization. It must be organized and operated on 

 an efficient business basis, and must be able to render more services, 

 or better services, or cheaper services to the manufacturers as well 

 as to its grower members than do the other marketing S3 r stems. 



GROWERS' INTEREST IN COOPERATIVE MARKETING 



In spite of the difficulties that have beset cooperative marketing in 

 the past, it must be recognized that organization on sound business 

 principles offers one of the most hopeful means for improving the 

 condition of the tobacco grower and for increasing the stability of 

 the tobacco industry. There are numerous services which a pro- 

 ducers' cooperative organization can perform for the growers and 

 for the industry. 



Such an association, for example, if properly organized and oper- 

 ated with the good will and business cooperation of the manufac- 

 turers, would have a stabilizing effect on prices throughout the 

 region. (1) It could eliminate the inequalities and discrimination 

 complained of under the auction-floor system. (2) It could initiate 

 and carry out a price policy which would serve to coordinate produc- 

 tion and demand. (3) It could effect economies in the assembling, 

 grading, storing, and preparing for manufacture. 



The tobacco industry has always been particularly subject to the 

 reaction which follows high prices for any agricultural product. 

 New acreage can be quickly brought into production, and a more or 

 less prolonged period of disastrously low prices have followed periods 

 of prosperity. The experience of the Burley Association demon- 

 strates that a response in increased acreage and production has 

 quickly followed favorable prices. This problem of increased pro- 

 duction confronts all cooperative marketing associations, but there 

 are several factors connected with tobacco marketing which make it 

 particularly acute and difficult. 



The first difficulty arises from the fact that tobacco must be proc- 

 essed, stored, and aged before it is used in manufacture. Under a sys- 

 tem of private sale, the buyers assume the risk and expenses of carry- 

 ing the crop until it is manufactured. But when a cooperative asso- 

 ciation comes into the field, there is a tendency on the part of manu- 

 facturers and buyers to pass back to the association, at least in 

 part, the burden of carrying stocks not immediately required for 

 manufacture. 



The second difficulty is the availability of land suitable for tobacco 

 production, and the comparative ease with which acreage may be 

 expanded. This usually results in an increased acreage following 

 years of high prices for tobacco and a decreased acreage following 

 years of low prices. From the standpoint of permanently profitable 

 production, the established tobacco growers are interested in the 

 stabilization of prices at a level which will reward the normally 

 efficient producer, but which offer little incentive for inexperienced 

 men on poor tobacco land to enter into competition with them. With 



