18 
market; and (4) permits management to explore and develop new mar- 
kets, something the individual cannot do on his own. 
Grading is important to successful pooling. If grading is not suffi- 
ciently fine to pay the producer according to the market value of his 
product, he may be reluctant to participate in the pool. 
The individual account method has some definite advantages. It enables 
the grower of top grade produce to get any premium price his particu- 
lar lot brings. This method appeals to producers of top quality pro- 
duce. It permits the grower to sell at a time of his choosing, but 
this makes it difficult for the association to market in an orderly 
manner. Under this method the product cannot be stored in the associa- 
tion's name. 
Two other methods--outright cash purchases from growers and growers be- 
ing paid directly by buyers--are little used by fruit and vegetable 
cooperatives. 
The outright purchase method involves two separate price negotiations. 
One takes place between the association and the grower at the time the 
product is delivered. The other is between the association and the buyer 
when the association makes a sale. The price received by the grower is 
usually based on the country shipping point price, while the price re- 
ceived by the association is based on the terminal market or f.o.b. 
selling price. Any annual net margins above operating costs resulting 
from differences between the cooperative's purchasing and selling 
prices are allocated to members on a patronage basis at the close of 
the association's fiscal year. 
Under the grower-to-buyer method the cooperative arranges or approves 
the general terms of the sale. However, the grower and the buyer es- 
tablish the specific conditions of the sale. For example, the asso- 
ciation may negotiate the selling price but the grower and buyer ar- 
range the delivery schedule. Payment under this method goes directly 
to the grower rather than through the cooperative. 
Figure 7 and appendix table 11 show the grower-member payment methods 
used by 339 fresh fruit and vegetable cooperatives in 1965. 
Among producers of important fresh fruits, citrus and apple growers 
preferred the pooling method (table 4). Most apple cooperatives using 
the pooling method were located in the Pacific States, mainly Washing- 
tion. However, Central States and Eastern apple growers preferred to 
have their apples marketed by the individual account method. Payment 
methods used by associations in the important potato regions of New 
England and the Mountain States were about equally divided between pool- 
ing and handling for the individual account of growers. 

