24 DEPARTMENT OF AGRICULTURE


law. Often the rate is 3, 4, or 5 percent. This interest
payment must first be earned, then declared by the board
of directors.
 29. Q. DO ALL COOPERATIVES PAY CASH PA-
 TRONAGE REFUNDS?
 A No, very few cooperatives can pay cash refunds
in their early life. Often too much emphasis is placed
on patronage refunds at the time of organization and
members soon become dissatisfied when no checks are
passed out. While an organization is young, margins
are usually required to pay debts or to build capital
strength.
 30. Q. IS THE PRACTICE OF LEAVING MARGINS
 IN A BUSINESS PECULIAR TO FARMERS'
 COOPERATIVES?
 A. By no means. Most of the large and successful
commercial businesses in the country started with small
investments. Year after year, a part of the profits are
"plowed back" into the business. Cooperatives, in fol-
lowing this practice, are acting in good American busi-
ness tradition.
 31. Q. ARE THERE OTHER BENEFITS THAN
 PATRONAGE REFUNDS TO BE OBTAINED
 FROM A COOPERATIVE?
 A. Yes, farmers can often improve the quality
of service they receive. By mixing their own feed or
fertilizer, they can be sure that the formulas used meet
their requirements. It is not practical for large manu-
facturers that distribute over many sections to do this.
Keeping ownership and control of marketing, processing
and distributive facilities in the hands of a large group
of citizens reduces the concentration of economic power.

 32. Q. WHO DETERMINES THE BUSINESS POLI-
 CIES OF A COOPERATIVE?
 A. The affairs of the association are managed by