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Agricultural Co-Operation


AGRICULTURAL CO-OPERATION. The develop ment of agricultural co-operation has taken widely different courses in various countries according to their specific needs. The main difference to be observed is between countries which are primarily producers of agricultural commodities for export, and those which produce mainly for home consumption. In the former, the co operative movement has chiefly concentrated upon the organiza tion of marketing; in the latter—apart from the development of rural credit and insurance—mainly upon the purchase of farm requisites, or the formation of co-operative dairy, bacon or other producing societies. Although this broad distinction holds good, it is nevertheless true that practically all types of co-operation are to be found to a greater or lesser extent in the principal agricul tural countries.

Co-operation in Great Britain.

Agriculturalco-operation in Great Britain may be said to have begun with isolated experi ments during the 19th century, but very little resulted from these early attempts. The Agricultural Organization Society in 1901 was the centre of the movement from its formation until it was wound up in 5924. During this period a considerable number of societies were established, as is shown by the fact that their number rose from 33 in 1901 to 1,558 in 1920, and the total membership from 517 to over 200,00o.

The post-war period brought forth a considerable intensification of the efforts to promote co-operation amongst British farmers, and the Agricultural Organization Society was assisted by grants from the State. A number of new societies were formed between 1918 and 1924. Unfortunately these efforts met with only limited success, and the creation of new societies was largely off set by a considerable number of failures. This was due to several factors—to the rapid fall in agricultural prices which took place after the spring of 192o, to the fact that a large number of the new societies were small and financially weak and were therefore unable to secure competent management, to the failure of many societies to adopt certain principles in co-operation which in other countries had proved to be essential, and to the lack of interest shown by farmers themselves.

Amongst agricultural co-operative societies in Great Britain the most successful have been the relatively large-scale societies concerned with the supply of farm requisites, a few dairy societies, and a certain number of others engaged in the sale of eggs, wool, fruit and vegetables, etc. A full description of the requisite socie ties may be found in the report on "The Co-operative Purchase of Agricultural Requisites" (Economic Series, No. 5) and of socie ties engaged in the marketing of agricultural produce in the report on "Co-operative Marketing of Agricultural Produce in England and Wales" (Economic Series, No. 1), both published by H. M. Stationery Office.

Mention should be made of the formation of the Agricultural Wholesale Society in 1918, which was an attempt to provide a central wholesale organization from which the local requisite societies could obtain their supplies; its relation to the latter was similar to that between the co-operative wholesale societies and the retail consumers' co-operative societies. Such central whole sale societies had for some years been an integral part of the agricultural co-operative organization in several European coun tries, as will be seen below. Although the turnover of the Agri cultural Wholesale Society amounted to no less than f 1,890,00o in 1919, with the sharp fall in prices which began in 192o, the society was involved in difficulties, and for this and other reasons it failed and was brought to an end in 1924. (See AGRICULTURE.) In 1924 the total number of agricultural co-operative societies in Great Britain were 1,631 (including 52 societies connected with the fishing industry), having a total membership of 298,401.

Co-operation in Europe.

Inwestern Europe, where the ma jority of countries are importers of food or are approximately self supporting, the growth of co-operation has been mainly in the direction of developing rural credit societies (see AGRICULTURAL CREDIT) or of societies for the purchase of agricultural requi sites, though often combining these functions with that of the sale of produce. But even here, Denmark, conducting a con siderable export trade, has developed its marketing organizations on co-operative lines in addition to its highly organized system of supply societies; indeed it has been the model upon which many of the marketing organizations in the newer countries have been based.

Leadership in agricultural co-operation belongs to Germany and Denmark. Of the 38,00o agricultural co-operative societies in Germany in 1924, there were 19,00o rural banks, 4.70o purchase and sale societies, 3,50o dairies and Io,000 societies for other purposes, together with 98 "central" societies. In 192o Denmark possessed more than 5,00o co-operative associations, including over 1,60o consumers' societies, 'Jo() creameries, 4o bacon fac tories, besides a number of central associations, export associations and co-operative bodies for various minor purposes.

A general characteristic of the European co-operative move ment is that both in its origin and subsequent development there has been a certain idealism which has given it a special vitality. Thus, in Denmark, the movement was associated with a moral educational revival accompanied with the development of the people's high schools; in Belgium the co-operative organization had a basis of religious and social culture; in Germany the birth of the co-operative credit movement was largely a question of the social regeneration of the rural population. In most of these cases it started with the clubbing together of a small number of villagers to carry out a common object, whether it was the pur chase or sale of produce, or the provision of credit. But, althou' h built up upon this small foundation, the movement has gradually assumed a different character through the consolidation of the small units into large federated organizations, the gradual cen tralization of control, and the development of many of the fea tures of big-scale enterprise. Indeed, federation describes in a word the modern development of the co-operative movement in most agricultural countries.

The main divisions of the co-operative movement in Europe are supply, production, marketing, credit and insurance. Other minor, but important, branches, are the co-operative use of farm machinery, cattle breeding, the supply of electric light and power, the manufacture of potato meal and potato alcohol, forestry and fishing.

Supply Societies.

Thesehave aimed at purchasing agricul tural requisites in bulk at wholesale prices and delivering them to members at cost. They have been widely developed upon "Roch dale" principles, the goods being delivered to members at certain fixed prices and the profits of the societies being distributed amongst its members as a "dividend" in proportion to the gross amount of their purchases. This principle applies in many European countries, though an exception is to be found in France, where the profits of the "syndicats" go to the formation of a reserve fund which belongs to the members equally, irrespective of the amount of their purchases. The recent tendency in the development of these societies is to federate the local distributive societies to central wholesale societies on the general plan of the British distributive movement.

In Germany, the pioneer society in the movement towards wholesale federation was the Haas Society at Insterburg, founded in 187r. This example was subsequently followed by the rest of Germany, membership of the provincial wholesales being usually confined to the local distributive societies. The first permanently successful federation amongst consumers' stores in Denmark started in 1884 with the formation of the Co-operative Wholesale Society of Denmark amongst the societies on Zealand (Sjalland), for the supply of farm requisites as well as ordinary household requisites. Four years later a similar wholesale society was started in the Jutland Peninsula, and in 1896 these two were amalgamated into one organization—the Co-operative Wholesale Society of Denmark. Since then it has made remarkable growth, the number of consumers' societies which were members of the wholesale having risen from 310 in 1896 to 1,259 in 1910 and 1,805 in 1922. The Co-operative Wholesale Society is a member of the Scandi navian Co-operative Wholesale Society, which is a joint buying organization for the wholesale societies of Denmark, Norway and Sweden.

In Switzerland very similar progress has been made. The Ver band-Ost - Schweizerischer - landwirtschaf tlicher - Genossenschaf ten was formed as a central society. The business was divided into two departments—the agricultural, dealing with seeds, manures, cattle food, etc., and the store department, dealing with household requisites. The organization has also undertaken the sale of members' produce, though its supply side remains its more im portant function.

In France, the local, and more particularly the communal, "syndicats agricoles," have united in departmental unions, and these unions have formed the starting point of larger organizations —the "unions regionales." The growth of the movement in France may be judged from the fact that the number of syndicats rose from 39 in 1885 to 4,948 in 1910, and to 6,667 in 1914. In the latter year the total membership exceeded I,000,000 persons.

Production Societies.—Probably the most successful branch of productive co-operation is to be found in the dairy societies existing in large numbers in all countries in which agricultural co-operation is firmly established. Leadership again belongs to Germany and Denmark, the former having as many as co-operative dairies in 1924, while the latter had some 1,118 at the outbreak of the World War. Switzerland, France, Holland, Belgium and some of the countries of south-eastern Europe have also made considerable progress in recent years. Ireland, one of the most successful countries in developing co-operative cream eries, had, in 1921, 336 of these societies. (See CREAMERIES.) Mention should also be made of the bacon factories and egg and poultry societies, the former of which have been brought to a high degree of efficiency in Denmark. In 1922 there were 4o bacon factories, dealing with 2,215,000 pigs per annum. These are factories requiring a considerable amount of capital and provided with subsidiary plants for the disposal of by-products. They are usually financed by loans jointly and severally guaranteed by the members, and receive the pigs from members under contracts binding them to supply their whole output for a period of years. The individual bacon factories are federated in the National Federation of Danish Co-operative Bacon Factories, with head offices in Copenhagen. One of the most remarkable achievements of this co-operative organization is the improvement of breed which it has enabled producers to bring about. A close study of the requirements of the British market (the principal export market) combined with scientific pig breeding under the super vision of the Government and the National Federation of Co operative Bacon Factories, has led during the last 3o years to an improvement in quality, without parallel in other countries.

Marketing.—ToDenmark also belongs the credit of co operative marketing which has lately been developed on an enormous scale in the newer countries. The tendency is to estab lish strong central selling or export agencies of which local pro ductive societies are members. The need for co-operation amongst the local co-operative societies gave the impulse towards the centralization of marketing, and the formation of provincial and ultimately national associations, but many difficulties were ex perienced before the structural development of the marketing organizations was complete. The turning point was reached when the principle of binding contracts for the supply of produce was adopted. Under this system the members of a local co-operative marketing association undertook to supply the whole of their pro duce to their society for a term of years. The term ranges from one to as many as 20 years. On this firm foundation it has been found possible to build up the modern organization which markets the greater part of Danish agricultural produce. The local units, having a democratic membership control, are usually federated to the central society on "commodity" lines, that is to say, the federation of local societies is usually concerned with one agricul tural commodity or commodities of closely allied character. Mem bers are paid for produce by an advance at the time of delivery followed by a distribution of the profits at certain intervals. The produce thus delivered is classified and graded at the headquarters of the association, and the initial payment is made on the basis of this classification. For the purpose of marketing, the produce is "pooled."' These principles—contracts, commodity organization and pooling—form the basis upon which a great part of Danish co-operative marketing is conducted, and have been widely copied in America, Canada, Australia and elsewhere.

The benefits which agriculture has derived from the European co-operative system are many. By the centralization of purchase and of sale, considerable economies have been effected, not merely in consequence of the elimination of the middleman and of bulk handling of the produce, but by the removal of the powers of ex ploitation which buyers and sellers of agricultural commodities not infrequently exercised over unorganized farmers. In organized marketing, large-scale handling has enabled scientific grading and standardization to be carried out, which in turn has led to the pro duction of standard grades of produce and standard breeds of live stock on the farms. This again, as in the case of bacon, has led to a general improvement in the quality of farm produce, and has greatly added to the competitive strength of the central export associations in foreign markets. Their firoducts have earned a reputation for uniformity and sustained high quality against which unorganized farmers have found it increasingly difficult to compete.

Canadian Wheat Pools.

Canadaaffords some remarkable examples of the development of large scale co-operative market ing enterprise, of which the wheat organization is the most sig nificant. The Saskatchewan Co-operative Elevator Company (which handled in 1922-23 about one-fifth of the grain produced in the province, amounting to over 4o,000,000 bu.) originated in the widespread discontent which was felt by farmers at the grow ing powers of the elevator companies. In g24 it owned 425 country elevators, and as development took place it was found necessary for the institution to own terminal elevators and "hos pital" elevators for treating damaged grain, and it has at the present time over 6,5oo,000 bu. of capacity in terminal and hos pital storage.

Alberta followed the lead of Saskatchewan by setting up the Alberta Farmers' Co-operative Elevator Company in 1913, and four years later this company was taken over by the United Grain Growers, Limited. Within recent years, the movement towards centralized marketing has undergone further important develop ments. For the purpose of selling, an organization known as the Saskatchewan Co-operative Wheat Producers, Limited, was formed, with headquarters at Regina. Members of the company, who already form a substantial proportion of the wheat growers in the province, enter into a five years' contract to sell the wheat through the company. Very similar arrangements have been made in Manitoba and Alberta, the respective organizations being the Manitoba Co-operative Wheat Producers, Ltd., with head quarters at Winnipeg, and the Alberta Co-operative Wheat Pro ducers, Ltd., with headquarters at Calgary. To complete the sys tem of centralization only one step remained, namely, to unite the three provincial pools into one organization. This step has now been taken. The Canadian Co-operative Wheat Producers, Ltd., with headquarters at Winnipeg, was formed as the central selling agency for the above three producers' pools, and operated for the first time in respect of the 1924-25 crop. It then represented more than 127,000 farmers. The handling of milk, butter and cheese, the marketing of wool, live stock, poultry and eggs, fruit and other produce by co-operative enterprise has also made considerable advance in Canada since the World War.

Australian Wheat Pools.

Theco-operative wheat pools of Australia are an example of a somewhat different character, since they came into being as the result of direct State action in order to meet the abnormal conditions during the War. They have brought about a fundamental change in the system of marketing wheat in that country. The original scheme was compulsory. It was entered into by the Governments of the Commonwealth, the States of New South Wales, Victoria, South Australia and Western Australia for the purpose of realizing to the best advantage the wheat harvests of the respective States, and for making advances to farmers pending the realization. The scheme was first applied to the g 15-16 crop, and it was subsequently decided to deal with the succeeding crops on the same principle. This actually took place in respect of each crop up to that of 1920-21. The duty of realizing the crop was placed in the hands of the Australian Wheat Board, consisting of ministerial representatives of the Govern ments of the Commonwealth and the respective States, and one representative of the growers from each State.

In each State a local board or commission controlled the opera tions of the scheme within its area, and the local board effected all local sales, including sales to millers. Under arrangements with the Australian banks made by the Commonwealth and State Governments, advances were made to farmers upon delivery of their wheat at railway stations to the appointed representatives. The proceeds of the wheat sales were applied, as realized, in re duction of the bank over-drafts which had been used for the pay ment of advances and expenses. In 1922 the compulsory pooling of wheat was abandoned, but the principle of pooling the export able surplus was continued on a voluntary basis under the respec tive State Governments. Under this scheme, as in the case of the compulsory scheme, each State ultimately receives, in respect of the grain actually shipped, the average net profit from the over seas realizations, which, after paying expenses, is distributed pro rata amongst the growers. This system of pooling remains in operation (though some doubt has been expressed as to its future), and the grain exported to the United Kingdom is distributed there through the Australian Wheat Pools Agency, consisting of two firms, which receive and market the whole of the wheat ex ported by the respective wheat pools (with the exception of Victoria, which sells independently) operating upon the British corn exchanges, mostly in London.

Mention must also be made of the rapid growth of agricultural co-operation in India, which has mainly taken place during the present century. Indian co-operation bears a much closer resem blance to European than to the American or Australian systems. As in Germany, it has been developed largely to provide credit (and insurance) facilities. and to a limited extent for the purchase of requisites and the sale of produce. Its remarkable growth may be judged from the figures. The total number of co operative societies in 1907 was 149; in 1914 it was 15,673; at the end of the War 26,465; and in 1922 it had reached 52,000. Of this total, 46,70o are agricultural societies, 3,60o are non-agricultural, 1,200 are supervising and guaranteeing unions, and 48o are central societies, including provincial and central banks, and banking unions. Of the agricultural societies all except 1,165 are credit societies. Production is represented by 302 societies, the remain der being organized for purchase and sale. (R. E.)

societies, co-operative, wheat, marketing and produce