How is bargaining strength attained? What pro-po-rti-on of the volume 

 must an 'association control to bargain effectively?- These ere im- 

 portant questions which, immediately come to the fore, when a coopera- .-. 

 tive has as one of its objectives the influencing of prices through 

 bargaining t 



It is desirable, from a seller's standpoint, that he' control a large 

 enough portion of the volume to be sold so that the buyers cannot 

 obtain a sufficient quantity, for' their needs without dealing: with him. 

 From- a. buyer's standpoint, it is desirable that; he have, access to a 

 volume sufficient for his- needs' without. being dependent on the volume 

 controlled: by any one seller. : 



The difficulties that associations have in trying to obtain' monopoly -<;-.- 

 control of supply in their effort to influence price has long been 

 recognized. There are so many farmer's producing each nroduct and so 

 many others who would produce it if the price were increased slightly 

 that any permanent, .monopoly control is extremely difficult. . . .. • 



Most attempts at monopoly control of supply have failed because of : 

 (l) Inability to bring about the effective cohesion of a sufficiently 

 large-- proportion- of the producers ; (2) inability t,o-. prevent the 

 entrance of new producers into agricultural production or to control 

 output of those already rroducinp; ^nd (3) inability, to prevent sub- 

 stitution of one food product for another by the consumer. 



Mr ny Writers in the cooperative field have emphasized the-' importance of 

 tryinp to adjust volume of production to market demands. However, for 

 the most part cooperatives have been organized to take care .of the selling 

 function rather than production. The association necessarily leaves con_ 

 trol of production with the individual grower. In the case- of temporary 

 over-supriy of a non-perishable product a marketing association may render 

 valuable service by adjusting time of sale accordingly. Nevertheless, it 

 is the farmer's responsiblity rather than the associations 's to adjust 

 production. -The a ssociation can help by supply information on the future 

 outlook, but this is effective only when the farmers translate this infor- 

 mation into action on their individual farms. 



A bargaining association, to be effective, must have control over a 

 sizable volume. The portion of the total volume of a given commodity 

 needed defends upon a number of circumstances. Most important is the 

 nature of the- demand for the oroduct. If demand is inelastic, that is, 

 the product has few substitutes and is more a necessity than a luxury, ■ 

 a small volume is likely to sell for a higher price and.net the farmers 

 a greater total return than if the demand for the product were elastic. 

 Other things being equal, the more elastic the demand for the product , 

 the higher proportion of control over total supply an association must 

 have to effectively Influence prices. Obviously, much also defends 

 upon the status and number of buyers in the market. 



