Farm cooperatives: Reaping a bigger share of the harvest;

              American farmers have created
some remarkable cooperative I business organizations. As a result, they are harvesting an increasing share of the benefits generated by our food system.
Some of these cooperatives are well known by brand name-Sunkist, Welch's, Land O' Lakes, Ocean Spray, Sun-Maid, Sunsweet, Diamond, and Sioux Bee-even though they are not widely recognized as farmer-owned cooperatives. Such organizations are among 82 that produce more than 300 brands of processed food, plus dozens more of fresh products. They are also among the 6,700 farmer cooperatives which had a sales volume of $43.5 billion in 1977. (This net volume is expected to exceed $55 billion for 1979.) In 1980, at least a dozen cooperatives wilt register annual volumes in excess of $1 billion each. The largest, Farmland Industries, Inc. of Kansas City, has announced sales of 54.75 billion.
Why Cooperatives?
How significant is this growth in cooperatives? Increasingly so. For the farmer has learned through experi-ence that by working with other farmers he can:
• Become more competitive.
• Develop auxiliary services.
• Broaden marketing capability.
• Improve efficiency.
Farmers have long recognized that they have been at a disadvantage in the nation's food system Required to deal individually, and from dispersed locations, with firms thai are far larger and far more concentrated
reaping a bigger share of the harvest.
/
by RANDALL E. TORGERSON/ Admin. Agricultural Cooperative Service U.S. Dept. of Agriculture
than themselves, they have had little bargaining power. By investing $18.6 billion in all types of cooperatives-an average of $8,055 per farm-farmers have sought to lessen that disparity and increase their competi-tiveness in the marketplace.
The lack of a product or a service
has also prompted the start of many cooperatives. A current example is the need for rail transportation. Someone may soon ask why farmer cooperatives are getting into the railroad business. The answer is thai rail line abandonment reduces the farmer's ability to transport his produce from rural America.
Farmers also have had to join forces in order to supply to consumers the volume, uniform quality, continuing supply, and product form that the market requires. Otherwise, corporate farms and food conglomerates would pursue the job of aggregating and processing, and leave to farmers the more subservient role of raw supplier. Through cooperatives, farmers have been able to expand marketing functions, bringing a value-added dimension to farm products.
The efficiency that one finds in larger organizations has also motivated the development of cooperatives Farmers first learned that lesson right on the farm, as increased landholdings increased their operating efficiency. Applying that lesson to off-farm cooperative ventures has enabled farmers to expand their business horizons. The bottom line for this interest is the same for farmers as for other businessmen-higher profitability.
Market Share
How extensive are farmer coopera-tives in our agricultural economy? How large are they as compared to food corporations? Is their rate of growth significant? A few statistics
21