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24. BULLETIN 1392, U. S. DEPARTMENT OF AGRICULTURE 
ORGANIZATION BY COMMODITY 
In the plan of organization adopted by the cotton growers it is a 
fundamental principle that the basis of organization is a single 
commodity or a group of related commodities. Separate associa- 
tions are formed for cotton, tobacco, rice, peanuts, etc., rather than 
one association for a group of commodities produced in the same 
general locality. With this principle as a basis the plan contem- 
plates control of the marketing of all or a large part of the par- 
ticular commodity, with only minor regard to the communities in 
which it is produced. Although separate cotton associations were 
formed in each State; this recognition of State boundaries was a 
matter of expediency rather than of principle. The purpose was 
the organization of the commodity—cotton—rather than the organi- 
zation of producers living in well-defined geographical areas. 
The phrase “commodity marketing,” in the restricted sense in 
which it is commonly used by leaders in the cotton, tobacco, and 
other associations formed on a similar plan, is associated with the 
idea of “commodity control.” Centralization of control in the 
marketing of all or a large part of the commodity rather than the 
handling of a single commodity is the distinguishing feature of this 
type of organization. The term “commodity marketing” is mis- 
leading, inasmuch as the majority of the cooperative associations in. 
the United States, whether locals, centralized associations, or federa- 
tions, handle only one commodity or a group of related commodities. 
Without an understanding of the peculiar sense in which the phrase 
“ organization by commodity ” is used, it is valueless in differentiat- 
ing between the centralized associations and those of the federated 
type, in which control is vested in the local units. 
LARGE-SCALE ORGANIZATION 
Most, if not all, of the cooperatives formed in recent years on the 
centralized plan provided as a prerequisite to organization that the 
contracts with growers represent a definite volume of business. 
Many provided for organization only in the event that the contracts 
assured control of the major portion of the total crop or of that 
produced in a specified area. One tobacco association placed its 
minimum at 50 per cent of the acreage, another at 6624 per cent, 
and another at 75 per cent. Control of a much larger percentage of 
production has been obtained by a number of associations handling 
perishable or semiperishable crops. 
The idea that monopoly control is vital to the success of a central- 
ized cooperative marketing association is not generally accepted at 
the present time by leaders in the movement, or, at most, it is not as 
deep-rooted as in earlier years. Many consider it advisable but not 
essential. In insisting upon large-scale organization as a principle 
the intention is, primarily, to obtain a volume of business sufficient 
to provide expert management and necessary facilities, to assure 
efficient operation at the lowest possible per unit cost, and to make 
possible an effective “ merchandising ” program. 
In the organization of the cotton associations each State organiza- 
tion committee fixed a definite number of bales rather than a definite 
and uniform percentage of the crop as its minimum requirement. 
In most instances this amounted to 20 to 30 per cent of the produc- 
tion of the State. This relatively small volume upon which actual 
