b. Should excess working capital be used to redeem equities 

 held by long-suffering and patient equity holders? Such 

 redemptions not only would affirm the concept that the 

 economic benefits of cooperative marketing go to patrons, 

 but also would be a tremendous membership relations gambit. 



Co Should the associations seriously consider borrowing 

 seasonal funds to finance receivables and inventories 

 rather than attempting to harbor such funds during the 

 off-season in the form of certificates of deposit or 

 other forms of investment? The organizations' purpose, 

 it should be remembered, is not to invest members' funds. 

 Rather, it is to perform marketing and purchasing functions 

 and related services. 



Fourth, New Jersey growers realize the need to gain marketing strength 

 through greater unity. The Fabian-Burns reports point out that over 

 60 percent of growers interviewed believed that merging all locals or 

 affiliating with a regional or national organization was quite desirable, 



This finding confirms what we know to be true in so many situations 

 throughout the country -- that members of cooperatives are much more 

 ready for major changes in the structure and functions of their co-ops 

 than their directors believe to be the case. The New Jersey reports 

 highlight the weaknesses of membership relations of these organizations. 

 Our contacts with these organizations appear to confirm that in too 

 many cases board policies are shaped by personal rather than member- 

 ship considerations. 



Fifth, there is a lack of understanding of the new Federal income tax 

 laws especially as these laws relate to their patrons' tax responsi- 

 bilities. For example, associations that issue nonqualified written 

 notices of allocation should inform their recipients that these 

 allocations should not be reported as current income. By the same 

 token, associations that issue qualified allocations should inform 

 their recipients that such allocations should be reported as current 

 income. We strongly suggest that the associations take steps to 

 familiarize themselves with both the cooperatives' and their patrons' 

 respective tax responsibilities to avoid both legal and member 

 relations problems. 



Sixth, because the minimal membership fee provides a flimsy and casual 

 basis for a producer to either become a member or to terminate his 

 membership, the associations make little, if any, effort to acquaint 

 present and potential members with the "rules of the game" embodied in 

 their bylaws o We suggest as a matter of ordinary cooperative business 

 practice that the associations provide copies of their bylaws to their 

 members . 



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