The Nonpartisan Leader Newspaper, April 18, 1921, Page 7

successful business has always been and probably always will be to buy as cheaply as possible and sell to the greatest advantage. ' The stories of great holdover crops were invented to support that rule. It was gambling pure and simple. No speculator was strong enough to place on the market and ad- vertise a single brand. It would have been business folly for him to attempt it, for the expense of ad- vertising dried peaches would only make good busi- ness for his competitor and there was no security for him. Competition was the law of the day and some competitor might take from him his source of supply, providing the price was raised a few cents. So it was seen that the salvation of the grower was to pool his crop with his fellow growers, to standardize the product and establish a system of . contracts so that the supply would never fail the organization that stood ready to create the demand, if it did not already exist, for dried peaches. Eighty per cent of the dried peach growers in the state were ready for an organization that would at least eliminate the speculator. Meetings were held throughout California and in a short time $600,000 (Continued on page 17) The Proposed Grain MarketingSyStem Chairman of Committee of Seventeen Explains Selling Plan for the BY C. H. GUSTAFSON Chairman of Farmers’ Grain Marketing Committee : of Seventeen 3 VER since the Committee of Seventeen | announced the adoptiorn of a plan for the national marketing of grain co« operatively, farmers in the grain states have been asking the question, “How does this plan affect me and what am I expected to do?” This article is written to answer the foregoing "question. Every farmer who has grain to sell will be eligi- ble to membership'in a nonstock, nonprofit national selling association. This national association is to be an entirely new co-operative agency. To become a member of this national selling or- ganization the farmer will probably be asked to con- tribute $10 for a five-year membership. Each farmer will make a contract to the general effect that he' will deliver all of his grain, except that needed for seed and feed, to the national marketing association through his local co-operative elevator. The local co-operative elevator will in turn contract to deliver all of the grain which it receives to points designated by the national sales agency. ‘Where no local co-operative elevator exists,. farmers who have taken out memberships will or- ganize a local association. - One of the outstanding features of the .entire - marketing plan proposed by the Committee of Seventeen is the fact that the farmer will be given three options in his contract as to the methods of disposing of his grain—that is, he can market his grain by consignment, by direct sale to his co-oper- ative elevator, or by pooling One farmer or several farmers, who have sufficient grain to load out one or more carloads and who wish to sell their grain on consignment, may ship their grain by car- loads through co-operative elevators ' to the terminal markets, such as Chicago and Minneapolis, with the instruction that the grain be sold at market price upon arrival. SAVINGS POSSIBLE BY CO-OPERATIVE ACTION The farmer may also sell his grain as at present to his local co-operative elevator at the current market price. Further, he can avail himself of the warehousing facilities of the co-operative elevators in terminals and not sell until weeks or months later. Producers who dispose of their grain in this manner, in addition to having the benefits of selling through their own national marketing machinery, will realize other co-operative benefits. The warehousing facilities, the export com- pany, the financing corporation and other co-operative departments of the national _plan will realize profits, or effect savings, which will be pro-rated back to the co-op- erative elevators on the basis of the amount of grain shipped to the national marketing agency. These profits when re- “ceived by the co-operative agencies will in turn be distributed back to the individual farmer members of the co-operative ele- vators on the basis of the number of bush- els which they delivered to the elevators, that is, in the form of patronage dividends. Still another -avenue of marketing his grain is open to the producer under the new plan, that is, pooling his crop with the grain of other local growers. When grain is marketed in this manner each farmer contributing to the pool will receive the average price obtained for all the grain of similar kind, variety and grade, to be sold' when the market conditions are most advantageous. Pooling products in Benefit of Leader Readers this manner has reached its highest development among the California co-operative organizations, “which were thoroughly investigated by the Com- mittee of Seventeen and found to be highly success- ful. Grains that are pooled in this manner will pass out of the control of the individual producer and the grain will be sold by the directors of the pool at the time that they deem most opportune. When the grain is sold, the total receipts will be distributed among the producers on the basis of number of bushels of a certain kind, variety and grade of prod- ucts contributed to the pool. Of these three alternatives, the method of marketing which proves to be most satisfactory and more nearly returns a price that will make farming profitable, will be the marketing method that will develop and increase in popularity. But if one method should prove highly unsatisfactory for one reason or another the marketing plans as a whole will not be endangered. - The national selling association will provide facilities for marketing the grain of its grower members on a cost basis. The Committee of Seven- teen was convinced that the time was here when the farmers must enter upon a program of conduct- ing their own business in a businesslike manner. It was for this reason that from the outset the com- mittee had in mind a complete marketing machine comparable to those representing other important industries. The facilities contemplated for serving this great grain marketing machine include first, branch sales agencies at important terminal mar- kets in each grain district; second, terminal ware- house and elevator facilities where the grower mem- bers’ grain can be cleaned, processed and stored un- til market conditions are advantageous for its sale; third, an export corporation for marketing to for- eign countries surplus grain not needed for domestic N I TWO BIRDS WITH ONE STONE | “Why shouldn’t the grain grower have and use the same kind of a gun that the California fruit grower uses?” Cartoonist Morris asks. PAGE SEVEN 4 consumption; fourth, a finance corporation to fur- nish credit to grower members so that grain may be sold in accordance with the demands of consumers, and, fifth, a department to collect information con- cerning market conditions, world’s supply, foreign crop conditions and other statistics.zs The proposed operation of the finance corporation is of particular interest. Lack of credit, more than any other single factor, has been responsible for nearly 75 per cent of our national wheat crop being forced into market channels during a four months’ period of the year. The result is that the price of wheat is depressed during the time that the bulk of the wheat is marketed, while the peak of prices occurs months later when but few farmers have wheat to sell. Financing and warehousing this periodical surplus devolves upon dealers and trad- ers, speculation runs rife and, while the farmer takes comparatively low prices for his crop, the city consumer almost invariably pays prices for finished cereal products that are reflected by the highest peak of prices. FARMERS CAN HOLD GRAIN TO PREVENT GLUT OF MARKET Under the new marketing. plan the farmer who does not wish to sell at once will be issued ware- house receipts for grain held in local or terminal warehouses. These receipts will be passed along to the finance corporation where debentures or some other form of short-time securities will be issued against them, bearing a good rate of interest and sold in the open money markets. This system will allow the farmer a fair percentage of the value of his crop in immediate cash if it is needed, although his wheat may not be sold for several months after it is delivered to the elevator. All of the service corporations will undoubtedly show a profit or realize savings for the farmer. The Committee of Seventeen learned that Canada’s co-operative export corporation reduced the cost of marketing wheat for export from around 6 cents, as charged by private export cempanies, to less than 2 cents a bushel. Every farmer knows that grain is reclassified many times and sold as higher grade after it has been cleaned and processed. North- western farmers declare that reclassifica- tion has given increased profits for dealers amounting to millions of dollars annually. Such savings under the new marketing plan will be to the advantage of the farmer and no one else. The national marketing agency will feed supply into the markets only to meet real demand. If one million bushels are needed and one and one-fourth million bushels are offered, it is only natural .that the bottom drops out of the market. No other pro- ducer of essential commodities would mar- ket his products in the way that the farm- er has marketed in the past. ‘With a marketing machinery in his con- trol the farmer will eventually eliminate the speculators and gamblers who now de- rive their income from the fluctuating prices which are paid for his grain. Through the development of the pooling feature of his contract, the grower will eventually enjoy many advantages to be derived from a scientific system of direct routing, thys saving in transportation costs. Through the equalization of sup- ply, his price will be more stable. The business of farming will then lose its most hazardous character and will become an enterprise which will repay the farmer for his efforts in line with the remuneration received by other businesses. T e