DEPARTMENT OF AGRICULTURE


 Food Chain Cooperation

 In 1936 a special committee of the National Cooperative
 Council met with representatives of the National Associa-
 tion of Food Chains to discuss problems of common
 interest among agricultural producers and the distributors
 of their products, and especially a means of intensively
 handling seasonal surplus crops occasionally flooding the
 market.

 Leaders of the chain food store industry had been
 advised that certain practices of long standing in distribu-
 tion were regarded by a large number of farmers as harmful
 to their interests. According to the food chain association
 such practices had never been followed by the majority in
 the industry except at times when merchants were forced
 to meet a competitive situation. It was admitted, how-
 ever, that many chain food store operators had failed to
 understand the problems of the farmer; as for instance the
 advertising of "loss leaders" for the purpose of luring
 customers, resulting in depressed prices to the farmer.
 Above a clearer understanding between these two groups,
 lay the realization that one of the most pressing problems
 of the farmer are the occasional surplus crops and the
 consequent demoralization to the grower.

 Following a series of meetings between representatives
of many farm marketing organizations and representatives
of the food chains, agreement was reached in which chain
food store operators pledged their, aid toward the elimina-
tion from all branches of the industry of practices to which
thefarmer objected, as inimical to the best interests of both
retailingand agriculture. Preference was expressed on the
part of both chain food store operators and producer groups
to deal with one another on a net price basis, eliminating
from negotiations as far as possible all intervening broker-