Grassroots Growth of American Co-ops
Daniels, John
Grassroots Growth of American Co-ops Unlike Europe, Farmers Took Lead in Building Co-ops By John Daniels DIRT-FARMER delegates war* muck in the majority at the recent Chicago congress ef...
...All follow their respective commodity lines, such si grain, livestock, dairy products...
...Both are centered in Chicago with interlocking directorates, snd the League has branch offices in New York and Washington...
...This gives the American movement its distinctive character and affects its structure, outlook snd prospects...
...This society was launched in 1867 in response really U> the mounting complaints of farmers against commercial and capitalistic exploitation...
...But, of course, allowance must be made for duplication, as many farmers join seversl units which handle different crops...
...Some are federations of units on the next level below, some centralised bodies, some hybrids...
...It presents not a still but a motion picture, showing the farmer co-ops in process of evolution and viewing them in their fourth dimension, that of time, which is indispenable for more than ephemeral success...
...But todsy, because the average unit is so much larger than before, total membership has increased from about 600,000 in 1915 to 2,580,000 persons, practically all of whom are presumably farm heads...
...Though its first announced aims were social and educational, economic objects soon became its chief concern especially after the panic of 1873 which hit farmers haul and made them very receptive to any program which appeared likely to relieve their hardships and improve their conditions...
...At its annual meeting in 1874, it formulated a memorable Declaration of Purposes which proposed to "foster mutual understanding and cooperation" through "buying together, selling together, and, in general, acting together for our mutual protection snd advancement...
...this purpose took the torm of buying in pool lots' through agents, who ordered the goods directly from manufacturers at a good discount and collected from the Grange at prices which included their own commissions...
...The average city-dweller ¦nay have noticed an urban CO-OP grocery store here and there, or read a newspaper item now and then...
...National Cooperatives is gradually developing superregional wholesaling and production...
...In 1918 there were roughly 10,000 farmers' cooperatives, seven-eighths of which had arisen after 1900...
...So he would be astonished to learn that in America farmers' cooperative associations bulk far larger than anywhere else in the world, and that in the newest major field of co-op activity, namely the processing and distribution of motor oil and gasoline, they are away out in front as pioneers and pace-setters for ('imperatives everywhere...
...The lure of obtaining farmer-dictated prices through monopoly control of crops, particularly cotton, grain and tobacco, brought on a veritable craze for bigness—not federations of local units but highly centralized organizations with tremendous numbers of individual members dispersed over whole regions...
...That was what befell many marketing cooperatives in a postwar boom, which produced more than 6,000 new ones in the four years 1918-21...
...In tbia respect it is strikingly different from the movements in Britain and most European countries, in which industrial workers of cities snd towns predominate...
...The total snnasj business vol one has grown from seme {$00,000,041 in 1916 to 83,180,000,000 at present...
...No groups engaged primarily in marketing belonf to either of these organizations...
...Presumably, too, they served as object lessons which set the Grange thinking about cooperation in handling commodities...
...The first purchasing association, so far as extant records show, was organized in 186.1 to buy fertilizer for its members...
...But then it'Speeded up and has kept on ever since, with good results in economy and efficiency—except when it has run wild into overbigness...
...Practically all were of local character, unrelated to one another...
...Marketing cooperatives, however, have to sell perishable farm products to commodity brokers, produce wholesales and other buyers who hold the money, can play different marketing groups against each other, and choose when and from whom they will buy...
...It is plain, there, fore, that cooperative marketing learns lsrge in Am*,, kan agriculture...
...Tin by-product is likely to be better mutual umleistandinf and team play in the future...
...Most of the regional purchasing associations belonf not only to the National Council of Farmer Cooperatives but also to the Cooperative League and to National Cooperatives, both of which promote closer relstions between them and ths urban consumer groups...
...Within a few years there were hundreds of these stores, widely distributed from coast to coast...
...It also 'went ambitiously into manufacture of farm machinery, with good savings until overproduction and underservicing brought financial failure...
...At the same time, though we can barely mention this in the present space, it advanced cooperative marketing' in leading commodity lines...
...CONSOLIDATION of small units, operating in correspondingly small areas, into larger units covering larger areas, was a trend already somewhat under way when the war ended...
...It fs the educational body, whil...
...It began shortly after the Civil War ended, and resulted from vigorous action by the Grange, America's earliest national organization of farm folk—men and women...
...One of the principal proposals placed before the Chicago congress, st a special meeting attended by representatives from ten countries, was that an International Cooperative Trading and Manufacturing Association be incorporated in tha United States for the purpose of handling petroleum products chiefly, also food snd other commodities, in deslings between cooperative organisations throughout the world...
...But a goodly number kept on sturdily well into the present century, and a few grizzled veterans still survive...
...Lsunched in the depression which followed the 1873 psnic, many soon succumbed to its stress and strain...
...So while farmers banded together can usually get better prices than they could individually, they suffer from these strategic disadvantages...
...About 90% were doing marketing, the rest purchasing...
...F ROM the 1820's onward those local fire insurance units, whicji were cited in our initial article as constituting the first chapter of America's cooperative epic, got farmers used to working together for .common benefit and thus prepared the way for other kinds of cooperative action...
...Today, owing partly to after-effects of that visitation and later misadventures, partly to routine mortality, and partly to constructive consolidations from year to year, the number of marketing cooperatives is considerably less than it was in 1918...
...As there are roughly seven million farms, it would appear that 36V* of the country's farm heads are members of marketing cooperatives...
...Looking about, the Grange was impressed with the economies effected by the farmers' fire insurance groups...
...Others failed primarily because they violated the prescribed plan and specifications, which in themselves were wellnigh perfect...
...MEANWHILE Um Grange executive committee had been studying the feasibility of setting up cooperative stores...
...Its first attempt to cany out...
...Now at length all three have found common csuM in resisting a concerted drive by commercial interns* to have all cooperatives taxed on patronage refufW to members, which the cooperatives contend woujd lj» unreasonable, unjust and destructive...
...The next advance—chapter three -commenced right after the World War of 1914-18 and still continues...
...He may have a haxy idea that cooperatives figure considerably in some countries, but he usually assumes they don't amount to much here...
...Grassroots Growth of American Co-ops Unlike Europe, Farmers Took Lead in Building Co-ops By John Daniels DIRT-FARMER delegates war* muck in the majority at the recent Chicago congress ef the Cooperative League of the United States...
...They corresponded with leaders ef the English cooperative movement, which dated from 1844, and had some of them visit the United States for consultation...
...The second chapter of this epic is like the first in being commonly little known, or overlooked...
...But so far ss the general public or at any rate the urban public is concerned, there is as yet little understanding of what magnitude the movement has attained among the nation's farmers...
...The purchasing associations, however, havi played ball with both sides...
...What ef its structure and affiliations...
...But too many agents got to playing both ends in favor of themselves in the middle, scandals ensued, and this attempt ended disastrously...
...Farmers cooperated somewhat in processing and selling cheese, in driving livestock t« market, in storing and selling grain, and in marketing fruits and vegetables...
...This, at bottom...
...Its salient features have been consolidations, integration, and over-all augmentation of stature and strength...
...How farmers' cooperative organizations in the United States have attained their position of national strength and international importance is a story of grsssroots growth—an American epic...
...Especially notable has been its contribution during the present war in getting virtually all the regionil purchasing associations to join hands with the Council in an autonomous National Committee for Fans Production Supplies, which has worked successfully to obtain for the country's farmers supplies necessary for maxium f+od production...
...Since 1915 their membership has increased from 60,000 to 1,270,000— which means that 18% of the country's farm heads belong to purchasing groups...
...Then it was 8,978, and now (1942-43 season) it is 7,708...
...All in all, therefore, the Grange opened up these severs...
...Purchasing cooperatives are built on a surer and solider foundation...
...No doubt that state of mind had much to do with the phenomenal growth of the new society, which ere long had thousands of local Grange units widely distributed over the country with the total membership running towards a million...
...It got behind them and encouraged its members to form similar groups wherever possible...
...TuRNING now to purchasing cooperatives on their own merits we find that instead of decreasing, their number has more than doubled since 1918: then 1,341, now 2,742...
...But these dictatorily run mass-formations found it impossible to control supply of fsrm products or dictate their prices, and down they fell with a crash that shook cooperative marketing to its foundations, decimated its ranks and chastened its zealots...
...the Cooperative League and the National Council...
...Here cooperatives began and have had their main development among cultivators of the good earth...
...The lasting and constructive net result was that the Grange advanced farmers' cooperation in America from provision of insurance to purchase of commodities...
...Heretofore there hsi been a rather sharp cleavage between urban consume' co-ops and farmers* marketing associations, the former regarding the latter as un-Rochdelian, while the latt* have not paid much of any attention to the urbs" co-opers...
...Thus grassroots growth continues and cooperatives integration marches on...
...So far as there it any one organization which represents the whole rang* (though not the whole number) of marketing groups that one is the National Council of Farmer Cooperstives, headquartered in Washington, D. C. Most of the farmers' regional purchasing associations too, including the three largest, are members of this Council which, besides rendering many important services to the marketing associations, fosters collaboration between them and the purchasing groups...
...Their number increased rapidly thenceforth...
...The present brief sketch is meant to project a picture of these organizations as a whole, including marketing as well as purchasing associations...
...Above tkt local level there are several hundred mai keting M. gsnisations of district, regioaal, state or nationsl scom and functions...
...They are buying (or themselves producing) goods for their own assured constituency of members snd they hold the trump card, money, to get the goods they went...
...The attack » being fought through a joint.committee represent...
...Then, at the annual meeting in 1876, they recommended and the Grange adopted, a comprehensive plan for cooperative retail and wholesale stores which com* bined the basic Rochdale principles with the American farmers' horse sense and way of life...
...fields of cooperative enterprise, which thereafter American farmers tilled with cumulative success...
...imply because the American cooperative movement ia predominantly one of farmers...
Vol. 27 • December 1944 • No. 48
