And there seems to be little interest by hired management in some 

 instances and by board members in others. to explore the possibilities 

 of doing business with urban or surburban patrons -- the lawn and 

 garden phase of the supplies business, for example, as a means of 

 building volume. 



Indifference, undue concern about the tax treatment of nonmember 

 business, and unwillingness of farmer patrons to defer to nonfarmer 

 customers contribute to an inertia in developing urban-oriented 

 business . 



The cooperatives in many cases are forced into too lenient credit 

 terms as a competitive factor thus ending up as bankers not only to 

 their own patrons but also the buyers of their produce. Agway, Inc., 

 Syracuse, N. Y„, is "just another supplier" which, because of its 

 taut-ship credit terms, is patronized only sparingly by the associ- 

 ations as a wholesale source of supplies. Because the cooperatives 

 believe they must extend lenient credit terms, they in turn seek to 

 do business only with wholesale suppliers who will give them extended 

 terms. (Our mention of Agway does not mean that we hold a special 

 brief for that organization. Rather, because it is a cooperative, 

 ultimate economic benefits do flow to its farmer patrons on a 

 patronage basis. Can we say the same for other than cooperative 

 wholesale suppliers you often patronize?) 



Background to Problem 



What is the basis for the need for commitment presented in the fore- 

 going? The Fabian-Burns reports — ' provide substantial documentation 

 to several significant factors and trends. Briefly, their reports 

 document that most growers have the advantage of several competitive 

 marketing outlets; that a substantial sample of members interviewed 

 (74 percent) expressed no desire for a change in their marketing 

 organizations' selling methods. 



On the other hand, nonmembers ' Responses give a distinct impression 

 that they would support a strong central sales agency that had strong 

 membership support and that used membership contracts to assure a power 

 base in bargaining for price and other terms of trade. 



1/ 



~ The Role of Farmer Owned Fruit and Vegetable Marketing Organizations 



A. Eo 315 and 316. Rutgers Univ., New Brunswick, N„ J., 1966 and 1967. 



