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University of Wisconsin. College of Agriculture. Dept. of Agricultural Economics / Cooperation principles and practices: the application of cooperation to the assembling, processing and marketing of farm products, to the purchase of farm supplies and consumers' goods and to credit and insurance

IV. Cooperative purchasing, insurance and credit associations,   pp. 28-39 PDF (3.4 MB)

Page 28

                     CREDIT ASSOCIATIONS
     S OME of the earliest cooperative effort among farmers
     [   in this country was for the purpose of buying farm
          supplies. Farm organizations for many years have
    fostered this type of cooperative activity. In recent years
    cooperative oil associations have sprung up in large numbers
    in rural areas so that today there are probably more than
    1,000 associations engaged in this type of business in the
    United States. Cooperative grocery stores, of which there
    are probably 500 in the United States, are also found prin-
    cipally in the rural areas in the Great Lakes region. Whole-
    sale purchasing associations that supply local cooperatives
    with farm supplies, groceries and petroleum products, also
    operate in several sections of the country. It is estimated
    that about 55%6 of farm property is insured by farmers'
    mutual fire insurance companies. More than 5,000 credit
    unions are serving members at the present time. The na-
    tional farm loan associations and production credit assoc-
    iations are also aiding farmers in their financing problems.
    The earliest cooperative purchasing in the United States was probably
carried on by neighbors without any formal organization. Buying clubs, how-
ever, soon developed, but even these were usually loosely organized with
or no capital stock, no buildings, and no equipment. Sometimes farmers' clubs
served both as social and educational associations, and as buying clubs.
    These buying clubs either developed into business organizations with
capital and facilities, employing personnel, giving regular service, or they
tended to fade out of the picture. Usually the clubs attempted to operate
a very narrow gross margin. They made no provision for handling credit or
for taking care of unclaimed orders. All too often the local leaders in these
buying clubs furnished the money for the group purchases, and served with
little or no pay. It is natural that they sooner or later became discouraged.
The system demanded too great a sacrifice on the part of a few individuals.
   Early general farm organizations In Wisconsin set up a number of buy-
ing clubs, practically all of which have gone out of existence. Many of these
clubs purchased car loads of sugar, flour or feed, but when prices dropped,
after orders were placed and before deliveries could be made, the patrons
          11,arl11~ ~ ~ ~~~~45l nueupmn.MOems amrs lb
I~ ~ ~ ~ ~sre   bot   as socia  an  dctonlascaios n sbuigcus
                 Teebyn club   ihrdvlpdit   uiesognztoswt

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