bership fee. In many cases the prospective member must also sign a crop contract. Control of the organization is based on each member having one vote, and investments are frequently financed by deductions from current business. PROBLEMS OF FRUIT AND VEGETABLE ASSOCIATIONS Interviews with the managers of many fruit and vegetable organizations have developed that, according to the summarized opinion of these managers, there were seven principal factors that operated to reduce the effectiveness of the associations. In all associations, studied in detail, one or more of these difficulties was present to a greater or less degree. The seven factors most frequently mentioned were as follows: 1. The volume of business handled by the association is not sufficient to stabilize the market. 2. Too many varieties are produced, including many varieties difficult to sell or of poor keeping quality. 3. Poor packing, careless handling, inadequate storage facilities, a lack of grade standards, and other difficulties are encountered incidental to the preparation of the products for market. 4. The association is unable to control the delivery of the product or to specify the time of delivery. 5. Sales service is inefficient. Small markets are not supplied regularly and directly, while the large markets are often oversupplied. Too many shipments are moved unsold or consigned to commission merchants or auctions. 6. Retailing methods and margins restrict the consumption of fruits and vegetables. 7. Car shortages, delays in transit, and other difficulties incident to transportation are encountered. The solution of these difficulties, which loom largest in the minds of those entrusted with the management of the marketing associations, should result in higher prices to the producers, primarily because of the savings that may be effected, and because the desirability of the product would be enhanced and consumption stimulated. The cooperative associations have brought about many improvements in the grading and packing of fruits and vegetables. They have influenced for the better the methods of distributing and selling perishable products. They have developed by-products for the utilization of products undesirable in the fresh state; and the large fruit organizations particularly have stimulated consumption by advertising and service to retail dealers. The difficulties outlined above indicate, however, that many problems essentially local in character remain to be solved. The order in which they are listed and are here discussed indicates approximately the importance assigned to them by the managers interviewed. VOLUME OF BUSINESS The difficulty most common in fruit and vegetable organizations is that the business is too small. The managers and directors gen erally feel that if the association handled a larger proportion of the local crop, it would be possible to reduce operating costs and stabilize the market for the products the association has to sell. The volume of business handled by an association often determines its success or failure. A study of organizations that have gone out of business shows that "insufficient volume of business" was the sole or was a contributing cause of failure in almost half of the cases reported. In general, the business handled by an association must be large enough to permit the performance of the services required at a per unit marketing cost comparable to that of private dealers. Table 4 shows that the business of many fruit and vegetable associations permits only a small expenditure for marketing services. TABLE 4.-Percentage of fruit and vegetable marketing organizations in the various volume of business classifications The information at hand indicates that a larger percentage of fruit and vegetable associations are doing a smaller volume of business than are either the cooperative creameries or the grain organizations. It is reasonable to conclude that there is some relationship between the volume of business handled by a cooperative association and the probable life of the organization. Local fruit and vegetable associations that handle but one crop generally have an insufficient volume of business. This handicap can be minimized in some cases by handling a larger variety of fruit and vegetable products. The condition is being corrected slowly by grouping small local organizations in federations, or by forming large associations that cover sufficient territory to assure an adequate volume of business under normal conditions. The business of all fruit and vegetable organizations that gave information on this point, arranged by commodities, is shown in Table 5, and Figure 2 shows the business of fruit and vegetable organizations arranged by geographical groups. Over a period of years, successful cooperatives are increasing their volume of business. In 1913, 67 fruit and vegetable organizations reported that they marketed products valued at $16,769,000. The same organizations reported their total 1922-23 business at $36,526,000, showing an increase of 117.8 per cent in nine years. ESTIMATED MEMBERSHIP AND AMOUNT OF BUSINESS FIG. 2. The Facific Coast States exceed all other sections of the country combined in the value of the fruits and vegetables handled by cooperative associations TABLE 5.-The volume of business of 1,141 cooperative associations in 1922, grouped according to products marketed Of the citrus fruit shipped cooperatively, 98.9 per cent was handled by 5 federations in 1922; 90.8 per cent of the grapes shipped cooperatively passed through the hands of 8 organizations; 63.7 per cent of the cooperative shipments of apples were sold through 8 large associations; and 3 associations handled 89.8 per cent of all the plums and prunes sold by cooperative organizations. Likewise, a few large associations handled large portions of the total reported cooperative shipments of vegetables. Six potato associations handled 76.1 per cent of the total; 5 sweet potato organizations handled 95.4 per cent of the cooperative shipments of this vegetable; 84.57 per cent of the tomato tonnage sold cooperatively was handled by 7 associations; and the cooperative marketing of Lima beans was confined to one association. The complaint of many managers, however, is that the volume of business they control is not sufficient to stabilize the market. The phrase, “stabilization of the market," is subject to various interpretations and was not always used to express the same thought. As the term is usually employed by fruit and vegetable shippers, it implies chiefly the elimination of avoidable causes of price fluctuations. The shippers, including the cooperative associations, particularly wish to avoid violent recessions in price, which may be due to a number of causes and which from the very fact that they are unforeseen are responsible for severe losses. 86142°-26-2 All marketing agencies suffer from unorganized competition. The man who sells without a knowledge of market conditions, who because of lack of knowledge ships to markets already overcrowded, or who puts an unstandardized, poorly packed product on the market, has a demoralizing effect on the market and nullifies to a greater or less degree the efforts of reliable, informed shippers. From the point of view of market stabilization, therefore, it may not be essential that an association should control a large percentage of the shipments of a certain commodity, but it is important that it should be in the hands of reliable well-informed organizations or individuals. Stabilization of the market is occasionally used to imply an advance in prices or the maintenance of a high level of prices. The ideas behind such a use of the phrase range all the way from price fixing by the growers to the maintenance of a favorable price by offering better goods and better services. The expectation that a fruit or vegetable association can increase the price received for its members' products by withholding all or a portion from the market, or by refusing to sell except at a predetermined price, is generally doomed to disappointment. With a crop of a certain size to market under certain economic conditions, the associations can do no more than obtain the best price that the market demand warrants and render this service to their members at an economical figure. They may grade and pack the products in such a way that the cooperative brands are worth more than common stock, and they may stimulate demand by advertising and judicious distribution, but the basic price will be determined by supply and demand, and the association's quotations must be in line with this price. TOO MANY VARIETIES The second difficulty confronting cooperative managers is a multiplicity of little-known and undesirable varieties. The problem of "odd varieties" is common among deciduous fruit organizations and some vegetable associations. The apple growers, particularly, attempt to place on the market many varieties which are little known or which have distinct marketing defects. Pomological societies and educational institutions have encouraged in the past the introduction and trial by growers of new, often untested varieties, and are partly responsible for this situation. Odd varieties make the task of the cooperative manager difficult and reduce returns to growers. First, the cost of packing, selling, and record keeping is made more expensive when several varieties must be handled. Secondly, these comparatively unknown varieties sell at lower prices than standard varieties. The lower price may not be due to inferior quality but to the fact that the variety is unknown or reaches the market in such small quantities that no special preference has been created for it. Again, odd varieties are generally shipped in mixed cars-that is, the quantity of each variety available is so small that several must be combined to make a shipment. Such a shipment is not desirable to the wholesale trade and must be sold at a discount. The problem is primarily a question of management in production. The cooperative associations are performing a service by |