PALMAR, ALASKA
Dorothy M, Bel1,Editor
Published every Thursday at Palmer, Alaska, for the Matanuska Valley Parmers'
In
Cooperating Association for the purpose of giving news, of the Associations ork,
Problems and Accomplishments.
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- , COOPERATIVE PURCHASING OF FAR1.I SUPPLIES .
Cooperative purchasing by farmers is not a new development in'the United States where
farmers have traditionally aided each other in agricultural activities. The- simple
partnership of two neighbors to buy a bull or d seeder may serve as an illustration
of the early aspects of cooperative purchasing. As agriculture has gpown more com
plex and commercial, the manner in which farmers have joined together for their nutal
interests in production has changed. Early informal partnerships have given way to
incorporated assodiatiohs, Instead of'a few neighboring farmers joining together to
buy a car of feed, seed, or fertiliser, thero are now associations which bring thou
sands of farmers into one farmer-controlled buying unit, enubling them to obtain the
supplies and services which they need with assurance of quality and saving in cost.
Cooperation in agriculture in the United States has two major aspects— (1.) selling
agricultural products, and (2) purchasing the supplies and services needed in agri
cultural production and marketing. While many Government bulletins have been devoted
to cooperative marketing, there is no comprehensive publication of the Federal Govcra
ment devoted to the cooperative purchasing of farm supplies even though this form of
cooperation is fully recognized in Federal and-State laws. This bulletin is dosignod
to provide information on this important phaso of agricultural cooperation in the
United Statos.
Aj.i..o ana Jt'ruwiKu.s
Farmers aro essentially manufacturers', and, like other manufacturers, are concerned
with'koeping dorm costs of'production. The major costs of farmers other than for '
lend, buildings, and labor, are for such basic materials of production as seed, food,
fertilizer, insocticidos, oil and gasoline, farm machinery, and package materials.
The more value the farmer receives for each dollar'invested in such supplies the
lo\7cr tb his cost of production. It is, therefore, the aim of farmers participating
in cooperative purchasing associations to obtain their basic supplies economically
through their own agencies designed for this purpose. This objective is well sup
ported in the following statement by Russoll (39, p. 52)
"We must bear in mind, what is too often forgotten, that farmers, arc manufacturers,
and as'such arc entitled to buy the raw materials for their industry at wholosclo
prices* . Every other kind of manufacturer in tho world gets trado terms whon ho buys.
The'farmer, who is as much a manufacturer as the shipbuilder or the factory proprie
tor, it as much entitled to trado tcrm& when'he buys'the rdw materials for his in
dustry, which he uses to produce wheat, beef, mutton, pork, or whhtover olso. Is it
any wonder that agriculture decays in countries whero the farmers arc expected to buy
at retail prices and sell at wholesale prices?”
COST OF SUFPLIES A FARM PROBLEM
The extent'of formers’ expenditures in production is Often overlooked. In 1933 the
feed, seod, and fertilizer bill in the Unitod States was estimated by the 3urcau of *
Agricultural Economics'of tho United States Department of Agriculture'at $486,000,000,
The cost of containers, spfay material, and twino amountod to $92;000j000’, and the
cost "of operating tractors, farm automobiles, and tfucks was $380,000,000. Othor non
clnssificd farm expenditures were estimated at $196,000,000. In addition farmors'had
in 1933 capital'expenditures of $309,000,000 represented by the cost of machinery,
tractors, autos, trucks, repairs, etc. Wiilc this expenditure cannot bo considered
a direct operating oxponso for 1933, since such capital goods arc consumod over a
p.ariod’of years, similar capital expenditures for ossontial fam supplios occur an
nually. Thus'the'combined outlay of farmers for productive purnosos in 1933 amounted
to $1,463,000,000,
For the 8 year period 1926-33, tho combined operating expenditures of’ farriors amounted
to 31 percent of their total cash income.' This indicates that the cost of farm sup
plies is of great significance to farmers. If the average income of tho'farmer-wero
as groat as the averago income of individuals in other industrial groups, the cost
of supplies woPld be relatively less important. Since tho average farm incono is very
small, however, a modest saving in tho cost of form supplios may bo of great importance,
to tho famor,
This above information wds obtained from a Government Bullotin'put out by tho
Shm Credit Administration, Cooperative Division, Washington D.C, Under tho title of
Cooperative Purchasing of Farm Supplies By Joseph G. Knapp & John H. Lister.