been able to set up their own machinery for financing production during a period of acute credit stringency; and what is equally important, for minimizing unwise extension of credit and consequent expansion of production later on when money is easy.

A number of associations have been able to secure funds, frequently with the assistance of the board, to enable them to make advances to their members at the time of shipment or prior to the time at which warehouse receipts can be obtained on the stored product. For instance, a commitment to the National Fruit and Vegetable Exchange (Inc.) from the revolving fund makes it possible for this organization to meet the needs of member associations for advance payments on shipments marketed through the exchange. Similar loans have been made to other associations handling vegetables, canned fruit, nuts, and poultry and dairy products.

Loans by the board have in many instances made credit available from other sources, so that the effectiveness of the Government funds has been multiplied many times. Advances from the revolving fund have thereby proved of untold benefit to cooperatives and their members during the difficult months of 1931-32.

INDUSTRY COOPERATION

Some of the most important services of cooperative associations are of a long-time character and deal with the development of coordinated production and marketing. There is need within each agricultural industry for a program which will give consideration both to production and marketing. Such a program must take into account and be supported by all factors in the industry-producers, the trade, and consumers-but can best be developed under the leadership of organized producers as the group vitally interested in its stabilization.

The beginnings of an industry program for livestock were made during the past year by the selection of a council of 100. The personnel of the council was chosen by the board at the request of the livestock advisory committee and includes representatives of producers and their marking associations, consumers, packers, retailers, stockyard companies, railroads, bankers, the agricultural press, State agricultural colleges and the United States Department of Agriculture. The first meeting was held in Chicago in March, 1932. At this time committees were appointed to study the various problems common to each of these groups. It is confidently anticipated that out of the work of the council there will develop a forward-looking program for better balanced production, more systematic marketing, and the elimination of wastes in handling of livestock and meat products.

The services of cooperative associations during 1931-32 give additional proof that cooperation is the most helpful movement in agriculture, that it is permanent and that it offers many possibilities as yet unrealized. From the local shipping point to the terminal market the activities of cooperatives are instrumental in standardizing and improving products and handling methods, systematizing distribution, and steadying and expanding markets.

COOPERATIVE MARKETING DEVELOPMENTS

Cooperative marketing made continued progress during the 1931-32 fiscal year. The number of members enrolled in cooperative associations increased from 3,000,000 to 3,200,000. Eliminating the duplication arising out of the fact that one man is frequently a member of two or more associations, this indicates that nearly 2,100,000 farmers, or more than one-third of all farmers in the United States, are now cooperative members. The quantity of products handled by cooperative associations increased by about 15 per cent during the the year, but the value decreased from $2,400,000,000 in 1930-31 to $1,925,000,000 in 1931-32, due to the decline in prices of farm products. If farm prices had been at the same level in 1931-32 that they were the previous year commodities handled cooperatively last year would thus have had a total value of about $2,750,000,000.

The steady increase in the total quantity of farm products sold through cooperative associations has brought the volume of cooperative sales up to a significant proportion of the total production of many products. In the case of certain specialized products, such as walnuts and almonds, three-quarters or more of the total output is handled by cooperatives. Cooperation has reached significant proportions among producers of many types of fruits and vegetables. Among the more important farm products, nearly half of the dairy products, and one-third of the wool was sold through cooperatives in the past crop year. A very large proportion of the grain moved through local cooperative elevators, and about one-sixth of the commercial movement was handled by cooperative associations at terminal markets. One-sixth of the cotton crop was sold cooperatively, and cooperative sales of livestock were equal to one-sixth of the slaughter under Federal inspection. In several other fields where cooperation was not so fully developed at the time the marketing act was passed, it is now making definite progress. In tobacco, for example, the part of the crop sold cooperatively advanced from under 2 per cent in 1929 to about 6 per cent in 1931, and the number of members in active associations increased from 9,200 in 1929 to over 50,000 in 1932.

In addition to the growth in number of members and volume of business, continued progress has been made in the better coordination

of the activities of the associations in each field, and in the services rendered by the associations. The growth of the cooperative movement and the increased effectiveness of cooperative associations have been stimulated through the board's efforts in many ways in addition to the provision of loans. As is more clearly developed in the commodity sections which follow, services rendered by the board have now become an integral part of the whole structure of cooperative marketing in this country, and are one of the major elements explaining the uninterrupted growth and vitality of this movement through the depression period.

During the year cooperatives were assisted in meeting varied and complex membership and operating problems. Both borrowing and nonborrowing associations have been aided. Assistance has been given in strengthening the business structure of existing cooperatives, in revising and improving operating plans, in formulating marketing policies and sales programs, and in meeting financial problems. In the organization of new associations, preliminary surveys were conducted to determine the possibilities of cooperation and the opportunities for the creation of a successful association. Conferences have been held by members of the staff with producers in many communities and help given in the preparation of the organization plans and in developing the business structure of new cooperatives.

Work of this kind has been carried on through the Division of Cooperative Marketing. During the past year a total of 471 projects dealing with some phase of the board's service to cooperatives were carried on in 45 States. This work of the board since its formation, conducted in many cases in cooperation with State agencies, directly affected well over half of all existing local and regional associations, and demands for such services are constantly increasing.

Many agencies and organizations, public, semipublic, and private, have interests and responsibilities in connection with cooperative marketing and its development, as well as the Farm Board. These include State agricultural colleges and experiment stations, the extension services, State bureaus of markets and agriculture, general farm organizations, the vocational educational service, State and national cooperative councils, the American Institute of Cooperation, and the agricultural press. The board has endeavored to coordinate its activities with these agencies and cooperate with them wherever possible in order to make all the services available for the development and improvement of cooperative marketing of maximum effectiveness. Although the work of the board and the activities by the cooperatives naturally occupy a primary place in the following discussions, it should be kept in mind that these other agencies have participated or helped in nearly all of the developments discussed.

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The purpose of the board's service to cooperatives is to assist in building up strong, efficient marketing organizations. Loans from the revolving fund are only a part, and not the most important part, of these services. Not all cooperative associations have needed to use the financial facilities provided by the board's revolving fund, but up to the fall of 1932 loans had been made to many of the larger associations, and small local associations had participated in these advances through reloans by the regional or national cooperatives of which they were members. These associations had a total membership of 1,216,000. Allowing for the fact that many farmers hold membership in more than one organization, it is estimated that over 830,000 individual farmers are members of one or more cooperative associations which have thus taken advantage of the financial facilities provided under the agricultural marketing act. A year ago this number was 730,000. There was thus an increase of 14 per cent in the number of farmers whose marketing agencies were helped through loans from the revolving fund.

The producers who are members of associations which have received loans, directly or indirectly, from the revolving fund, may be shown as follows, according to commodity groups:

The volume of credit available to farmers' marketing associations during the past three years has been materially increased by the board's revolving fund. This fund of $500,000,000, however, amounted to only 4 per cent of the annual value of farm products in normal times. To make the resources at its disposal go as far as possible, the board early adopted the policy of using them as a supplement to, rather than a substitute for, funds from other sources. The availability of supplemental board credit did, however, improve the credit of cooperative associations, and enabled them to negotiate loans from commercial and Federal intermediate credit banks which they would not otherwise have been able to secure. In addition, advances from the revolving fund for the express purpose of buying the stock in credit corporations enabled the cooperatives to arrange for production credit from the intermediate credit banks for the use of their members in cases in which funds for such purposes would not otherwise have n available. Where funds were loaned for commodity advances, rate of advance was based on a conservative percentage of the

current value of the commodity, and overadvances were carefully avoided. The long-continued and unprecedented decline in the general price level, however, turned conservative advances into overadvances in many instances, and left many cooperative associations facing some of the common difficulties that the depression has visited on almost all business enterprises.

Loans from the revolving fund to cooperative associations are shown in detail in the tables at the end of this report, according to the commodities handled by the associations, the States in which the associations operated, and the purposes of the loans. Advances for acquiring or constructing facilities are mostly on a long-period basis, with regular amortization payments. Such loans totaled $14,893,517.98 up to June 30, 1932. In view of the usual long period of such loans, repayments as yet have been small, amounting to $1,308,932.85 up to that date. Loans for effective merchandising totaling $181,441,439.11, have been used partly for operating capital of the associations, and are being repaid out of returns from each unit of commodity marketed, thus letting the members of each association gradually acquire complete ownership of all its capital. In spite of such arrangements for gradual repayment, more than half of these sums have already been repaid, repayments to June 30 totaling $102,819,157.59. Loans on commodity advances, which totaled $160,576,469.24 up to June 30, had been reduced by repayments of $82,682,474.45 to that date. These loans include a large part of the funds advanced to cotton cooperative associations for carrying cotton, as explained under the cotton stabilization section, page 77. The remaining funds outstanding for commodity advances are not unduly large in relation to the business of marketing farm products valued at nearly $2,000,000,000. Loans to cooperatives for all purposes have exceeded $100,000,000 in each of the three years of the board's operation; and repayments from cooperatives have also been large, amounting to over $186,000,000 up to June 30, 1932.

The progress made by the cooperative movement, together with the services rendered by the board to cooperative associations, is discussed in some detail for each commodity field, in the sections of the report which follow.

LIVESTOCK

Cooperative livestock marketing has made substantial progress during 1931-32. Further development in the direction of a nationwide system, coordinating the activities of separate agencies to furnish comprehensive and efficient services to all branches of the industry has been made.

The total volume of business handled by all cooperative livestock sales agencies was reported as approximately 14,300,000 head for the year 1931 as compared with 13,746,000 in 1930, and 12,990,000 in