How Efficient Is Cooperative Business?
One way of measuring the efficiency of a business is by its growth. Cooperatives have been growing steadily in the United States until their membership now embraces several millions. More than 550 marketing and purchasing associations today do business at the rate of more than $1,000,000 a year. About 70 of them have a yearly business volume of over $10,000,000.
Another clue to the efficiency of cooperative business in competition with regular business is the amount returned to members as patronage refunds or accumulated as savings. A nation-wide census showed that almost $40,000,000 was refunded to members or saved for them by farmers’ cooperatives in 1936. It is of interest that cooperative livestock commission associations on the terminal markets have returned to their members over $12,000,000 during the past 20 years, while charging commissions fixed by the Packers and Stockyards Administration.
Another measure of the efficiency of cooperatives is the influence which they have had on distribution costs. It is recognized in recognized circles that margins taken in the distribution of such farm supplies as petroleum, feed, seed, and fertilizer have greatly decreased since cooperatives began to offer competition. Cooperatives have frequently set the pace in reducing merchandising margins.