COOPERATIVE AGRICULTURE 39




 Cooperative Purchasing of

 Farm Supplies
 Cost of supplies is a farm problem From an economic
point of view, farmers are comparable to manufacturers
and like manufacturers, are concerned with keeping down
costs of production. The more value a farmer receives for
each dollar invested in his supplies, the lower is his cost of
production. Farmers are entitled to buy the materials for
their industry at wholesale prices as much as a shipbuilder
or a factory proprietor. Profits lapse when farmers buy at
retail prices and sell at wholesale prices. The cooperative
purchasing form of business organization provides a
method by which farmers, through collective purchase, are
able to reduce the cost of basic supplies.
 By setting up their own purchasing organizations,
farmers are generally able to obtain trade discounts and
other price considerations customarily granted only to
retail agencies. Carrying the method still further and
combining the purchases of local associations, it is possible
for farmers to effect additional savings by obtaining basic
supplies direct from manufacturers or primary producers
for processing in cooperatives plants. Purchasing coopera-
tives are in many instances carried to an extent where such
associations engage in extensive manufacturing operations.
 Cooperative farm supply associations are interested in
enabling farmers to purchase supplies at the lowest possible
price. Prices paid by farmers too often must cover ineffici-
ency in distribution. Many existing agencies handle an
insufficient volume of business for efficient operation. Costs
are often unnecessarily high because of competitive sales
expense, carrying charges on unneeded, unstandardized,
or slow-moving merchandise, excessive delivery service;
poor credit and collection policies, and inadequate book-
keeping.