HOW WILL PRODUCTION, MARKETING, AND CONSUMPTION BE COORDINATED? FROM A FARM ORGANIZATION VIEWPOINT



3. Work for a marketing system where prices translate consumers’
wants to producers. This cannot be accomplished in a government
controlled environment that fixes prices, piles up surpluses, and pre-
vents the pricing mechanism from signaling the desire of consumers
for products. Nor can it be accomplished in the absence of grade
and quality premiums that carry through from the feed lot to the
consumer’s table.

4. Be willing to contract if necessary to produce and sell on rigid
specifications. Buyers who are in need of volume, uniformity, quality,
continuous supply, and definite delivery dates will pay for what is
needed, and farmers will be rewarded for helping the buyer meet his
requirements.

Some of these contracts will run between an individual producer
and his retailer, packer, or other purchaser. Others will be between
a farmers’ marketing organization and the buyer. In cases where the
contract is with a large chain store buyer, or other large purchaser,
farmers may need to arrange for custom processing or go into the
processing business themselves.

Contracts may also be made between the producer and the packer
or buyer with the producer’s bargaining association approving the
terms of the contract before it can be consummated.

A contract embodying specifications poses a problem for coopera-
tives that have been accustomed to selling what farmers offer. One
solution—and a very hard one for many to accept—is iron-bound
contracts between the farmer and his association to deliver what is
needed for the market with agreements to produce according to
minute instructions concerning breed, feed, time of purchase, time
of sale, and prescribed management practices.

5. Help develop a system of intelligent pricing for the many sales
that by-pass the auctions and terminal markets. Many are concerned
that the large volume of direct buying has dissipated the price-making
power of some central markets and are asking what effective structure
can be substituted to provide more reliable price quotations.

A frequently suggested solution is the establishment of bargaining
associations which would assist members in arriving at proper prices
based upon supply and demand conditions and involving contracts
covering prices, volume, premium differentials, and many other re-
lated items. Some envision that these bargaining associations would
involve central market sales as well as direct sales.

If farmers do get involved in bargaining associations, they must
realize that contracts must be advantageous to both the buyer and

118



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