12 BULLETIN 1266, U. S. DEPARTMENT OF AGRICULTURE. 
STRONG LOCAL ORGANIZATION. 
The structure of these cooperative associations is characterized by 
a strong local development, with a democratic membership control. 
The larger cooperative associations have been built from the bottom 
up around local undertakings. The need for cooperating with other 
similar associations, which was soon felt by leaders and local of- 
ficers in the early days, prompted the local associations to federate 
into district, and eventually into provincial and national associa- 
tions, along commodity lines. But the large associations operating 
to-day in every case have started from comparatively small be- 
ginnings. 
"Whether the central association, which is organized to handle one 
commodity, embraces the whole nation or only one province or 
district, its membership consists of local associations: the contract 
agreement is made through the local association. However, if a 
local association organized for a definite purpose desires to become 
a member of the central association which handles its commodity, 
its individual members must agree to the terms and conditions of the 
contract agreements as required by the central association. This 
form of organization is common with all the agricultural cooperative 
associations, except the Danish Farmers' Cooperative Association 
for Seed Growers. In this association, the central association oper- 
ates on a contract agreement directly with each individual member. 
It is significant to mention here, that the rate of mortality among 
local cooperative associations in Denmark has been very low. This 
is equally true of the large central federated marketing and pur- 
chasing associations. Among this latter group the Danish farmers 
have experienced but two failures : The Farmers of Denmark Butter 
Export Association, 1899-1908; and the Danish Farmers' Cooper- 
ative Potato Marketing Association, 1919-1921. The first is treated 
with the butter marketing associations (p. 25) ; while, in connection 
with the potato association failure, it may be said that, as yet, the 
Danes have failed to organize the marketing of potatoes successfully 
on a cooperative basis. 
The Danish Farmers' Cooperative Potato Association (Dansk 
Kartojfi -hh/rkerf orening), a nation-wide potato marketing organi- 
zation, was formed in 1919. Contrary to the common Danish 
method, this new potato association set up 'the central machinery 
and then began to build the locals. With an enormous organization 
force and the advantage of a favorable foreign market demand, the 
association closed the first year's business with export sales amount- 
ing to $8,283,000 at exchange, and its membership totaled 350 local 
associations with 25,000 producers. 
Instead of capitalizing its favorable position in the business cycle, 
by laying aside substantial reserve funds during the high prices in 
1919 and the early part of 1920, the management continued its pro- 
motion work, both in membership organization and the building of 
warehouses. Enormous losses incurred in export trade, together with 
i In- market depression in 1920, wrecked the association in its second 
year's operation. Its failure 1 is attributed to inefficient management 
and a mushroom-like growth during an inflation period. 
