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Total number of permanent positions.
Full-time equivalent of other positions.
Average number of all employees.
Average GS grade.
Average GS salary...

100

106

108 FARMER COOPERATIVE SERVICE

2 90

9.7 $12, 146

2 92 10 1 $14, 166

2 94 10. 3 $14,201

Purpose Statement

The Secretary of Agriculture established the Farmer Cooperative Service in December 1953, after Congress, in the Farm Credit Act (Public law 202, August 6, 1953), transferred its functions from Farm Credit Administration to the Secretary of Agriculture.

The Secretary has assigned to the Service (1) the functions under the Cooperative Marketing Act of 1926 (7 u.s.c. 451-457), (2) the functions that relate to the economic and marketing aspects of farmer cooperatives under the Agricultural Marketing Act of 1946 (7 U.S.C. 1621-1627), and (3) his responsibilities authorized by the Agricultural Fair Practices Act of 1967 (7 U.S.C. 2301-2306).

Farmer Cooperative Service conducts research; advises directly with cooperative leaders ano others; nromotes cooperative organization and development through other Federal and State agencies; and publishes results of its research, issues News for Farmer Cooperatives and provides other educational material.

l'armer Cooperative Service works to help (1) farmers get better prices for their products and reciuce operating expenses, (2) rural and smallton residents use cooperatives to develop rural resources, (3) rural cooperatives expand their services and operate more efficiently, and (4) people understand the work of these cooperatives.

Farmer Cooperative Service has no field offices. Its work consists of three programs: specialized cooperative research, cooperative marketing and farm supplies, and cooperative development.

Available Funds and Man-Years 1969 and Estimated. 1970 and 121

Item

Farmer Cooperative Service

Salaries and expenses... Obligations under other USDA appropriations : Miscellaneous reimbursements......

Total Agricultural Appropriation Bill....

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Other funds:
Agency for International
Development:
Technical consultation

and support program... Training foreign

participants... Special project to provide technical development assistance for farmers cooperatives in Brazil Paraguay and Calambia.. Oter.. Total, Agency for International Development..

: Actual
. Estimated

: Budget Estimate : 1969

:Available, 1970 : 1971 : :Man- : :Man- :

: Man: Amount :Years: Amount :Years: Amount :Years :

:
:

.
:

: :

:
:

:

: :$1,396,878: 90 :$1,631,000: 92 :$1,666,000: 94

:
.

.
:

:
:
:

:
:

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:
.

:
.

:
:
.

:

:
9.300:
26.000

_26.000 1 :

: :

:

:

: :1,406.178: 90 : 1.657.000: 93 : 1,692,000: 95 :

:
:

:

:
:

:
:

: :

:
.

:

: :

:
:

.
:

:
:
:

:
:

:
1,528:

1,500: . 1,500:
:
:

:
:

: 20.803: 2 : 21,700: 2 : 21,700: 2 : :

:
:
:

:
:
3

:
:

: :

: 151,987: 6 136,000:

136,000
6.632:
:
:

:
:
:

:
180,950: 8 : 159, 200: 7 159, 200:
:

: :

:

.
:

: :

:
:

:
:

: :

:
:

:
:

: :

:
:

:
:

:
19,299: :
55,000: 1 :

87,000: 1 :

:

: :

:

: 2,065:

:

.
21,364: :
59,000: 1 :

91,000 :

1 :

:
:

:
:

:
:

:

: ,:

:1,942,200 : 103

.

Funds received from States, local organizations and others for work under cooperative agreements...

Miscellaneous reimbursements...

4,000

4.000:

Total, Other runds.

Total, Farmer Cooperative Service.

1,608

08,292 98 1,815,20010

,;

00103

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Project

1970

1971

1969 :(estimated): Increases :(estimated) 1. Research and technical assistance: for agricultural cooperatives ...

$1,666,000 Unoblicated balance

17.122: Total available or estimate : 1,414,000: 1,631,000: +35,000

1,566,000 l'roposed supplementa) for pay costs :

-131,000: Total appropriation

: 1,714,000: 1,500,000:

42,396,878: $1,631,000: +$35,000(1)

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INCREASE

(1) An increase of $35,000 for research and technical assistance for agricultural cooperatives consisting of:

(a) An increase for technical assistance to cooperatives to initiate an expanded study of Farmer Integrated Forward Marketing 6061,000 available in 1970: Need for increase: Through cooperatives, farmers can improve their production decisions, reduce production expenses, acquire on-farm services otherwise not available to them, cain economics of scale in marketing their products and locate new or better markets. Farmers urgently need new marketing proposals of demonstrated feasibility.

Plan of work: The Farmer Cooperative Service will use the additional funds for

advisory assistance to determine opportunities and specific benefits of further cooperative integration in the fields of livestock and processed fruit and vege etables. The work will include assistance in determining feasibility of Joint distribution proprams among fruit and vegetable cooperatives; and joint feeding and feed procurement procrams in the cooperative marketing of livestock.

STATUS OF PROGRAM

Farmer Cooperative Service conducts research, advises rural co-op officials, and lielps farmers and other rural people develop new cooperative services or improve or expand existing cooperatives. Farmer Cooperative Service achieves these objectives through three programs: Specialized Cooperative Research, Cooperative Marketing and Farm Supplies, and cooperative Development. Farmer Cooperative Service also administers the Agricultural Fair Practices Act of 1967.

The Research program focuses on uniquely cooperative aspects of organization structure, financing methods, cost and efficiency, merchandising methods,, management practices, and membership relations. The Cooperative Marketing and Farm Supplies program on request advises individual cooperatives, helping them solve specific organizational or operating problems.

The Cooperative Development program serves all residents, especially those who most need additional income, new services, and skills to establish and maintain viable co-ops.

Farmer Cooperative Service programs aim to help cooperative members increase their net incomes and improve rural life through:

1. increased emphasis on new or improved cooperative services to help farmers and

other rural resiucnts meet changing conditions ;

2.

more effort to develop effective techniques that will enable cooperatives adequately to serve rural people; and

3. greater attention to basic research of (a) cooperatives' role in a diversified,

integrated, and conglomerate economy, (b) ways to increase farmer bargaining power, (c) patterns o cooperative organization to increase their efficiency and effectiveness, and (a) cooperatives' potential role in rural development.

Selected Examples of Recent Progress :

Research

Cooperative Mergers: Their Objectives, Success and Impact on Growth. Normally, only half of the acquiring co-ops involved in mergers achieve their stated objectives of economies of scale within two years. These co-ops also fail to increase their rate of return on investment. The acquired co-ops, on the other hand, generally achieved economies of scale objectives and increased their rate of return on investment. Both types achieved their pre-merger objectives of improved member services, additional facilities, and diversification. Equity of Patronage_Refunds by Cooperatives. Farmer Cooperative Service studied 75 regional marketing co-ops' distribution of year-end net margins. Three-fourths distributed all their net margins on the basis of each member's pro rata share of the co-op's total business. The others depended largely on this method. Together they distributed 92 percent of their net margins on the basis of each member's share of the total business, put 2 percent into corporate reserves, paid 4 percent in dividends to their members on the basis of investment, and paid 2 percent in income taxes.

Advisory Service

Consolidation of Mid-Continent Dairy Cooperatives. Farmer Cooperative Service studied a proposal to consolidate 21 cooperatives servicing 48,000 dairymen in 20 states. The study showed farmers could increase their marketing returns

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