DEPARTMENT OF AGRICULTURE


However, it is the policy of most cooperatives to keep
the amount of nonmember business as low as possible
Regular patrons. if eligible, should become members.

 24. Q ON WHAT BASIS DOES A COOPERATIVE
 DEAL WITH ITS MEMBERS?
 A Different plans are followed. It is considered
good practice among marketing associations to advance
only a reasonable part of the market value at the time
products are received from the producer. After the as-
sociation has performed such marketing services as
grading, processing, packing, shipping, selling, etc., the
actual cost of these services is deducted, and limited
interest on capital is paid, any sum remaining is returned
to the producers as final payment. Many associations
retain an amount of money on each unit of produce
handled which becomes the member's investment to
supply working capital and reserves.

 25. Q. HOW WOULD THIS PLAN WORK IN THE
 CASE OF A COOPERATIVE CITRUS OR
 VEGETABLE PACKING PLANT?
 A. Each producer will pay to his cooperative at
the time of delivery a rate sufficiently high to cover the
expense. At the end of the season, after all expenses,
such as salaries, labor, fuel, repairs, depreciation, insur-
ance and taxes, are paid, the amount of the net saving
for the season can be determined. The directors will then
provide for the distribution of this net margin or saving.
If the association is in debt, a portion of the cash pay-
ment to members may be withheld for payment of prin-
cipal and interest installments For these amounts with-
held, each member will receive stock, certificate of
equity, or book credit. In this way the capital of the as-
sociation is built up. From any cash remaining, the di-
rectors will provide for payment of limited interest on
the capital invested in the association. They also will set
up reserves and the remainder shall be paid to the mem-