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Bell, Florence C. (Florence Colfax), 1899- / Farmer co-ops in Wisconsin

Credit has role in development of cooperatives,   pp. 50-52 PDF (753.4 KB)

Page 50

Potatoes are graded in thefield by this farmer who obtains creditfrom his
production credit associa.
tion. Part of the proceeds will be used to retire the member's loan. The
money was advanced
to him on a budget plan-the first payment for plowing and planting, the second
for spraying
and cultivation, and the third for harvesting.
operative one-man one-vote principle.
Every farmer who obtains a loan pur-
chases a small amount of stock in his
association, so that eventually the
organization may be owned entirely
by the farmers who borrow from it.
Credit Has Role in
Development of Cooperatives
  Over the years the extension of
credit has been an important factor in
the development of farmers' coopera-
tive associations. In order to operate
successfully, a cooperative must have
a sound financial structure. If the
business requires a building and equip-
ment, adequate funds must be avail-
able to meet these capital expenditures
and also to finance current operating
expenses. Cooperatives have three
main sources of funds: (1) Proceeds
from the sale of capital stock to mem-
bers, deductions from receipts for
commodities marketed or supplies re-
sold that are retained by the coopera-
tive as a capital contribution from
patrons, and membership fees paid as
entrance requirements or annual dues;
(2) the money which the cooperative
is able to earn or save on its operations;
and (3) credit sources such as banks,
which lend money subject to repay.
ment from the business operations of
the co-op itself.
  A substantial percentage of Wiscon-
sin cooperatives require that new mem-
bers purchase capital stock. When
the national survey of farmer coopera-
tives was made in 1937, all of the Wis-
consin cooperative associations were
visited. Over 900 of them, it was
found, required the initial purchase of
capital stock or certificates, or member-
ship fees. About 25 provided for the
payment of annual dues; 100 did not
require any financial contribution. In
1936, the business of the marketing and
purchasing cooperatives of Wisconsin
resulted in net earnings of $1,562,090,
after all expenses of the year's opera-
tions were met. Almost half of 1ins
amount, $730,000, was returned to ihe

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