attaining a high degree of success in the
sharing of associated costs and benefits.
6. Difficulties in offsetting counter strategies of
opponents.
These points are undoubtedly valid and are basic
to the outcome of any bargaining effort.
Consequently, their development was an invaluable
contribution to the body of economic knowledge
pertaining to this important subject. Recognition of
these points is essential in any well-reasoned
consideration of the bargaining issue. However, there
are few, if any, agricultural groups who can fully
overcome all of these obstacles in establishing
bargaining power. In fact, some agricultural groups
may find that they can master few, if any, of these
obstacles to maximum success in bargaining. These
inherent or acquired inadequacies undoubtedly serve
to limit the power potential of affected groups.
Establishing and maintaining bargaining power is
difficult; and the degree of such difficulty increases at
a rate which is at least proportionate to the success of
the enterprise. The existence of power invites the
formation of a counter force; and this is no less true
of those who are in a superior power position than of
those who have relatively limited power. Despite this
fact, bargaining power has been developed by various
agricultural groups and has yielded benefits to the
farmers--and in some cases in substantial amounts.
DEVELOPMENT OF BARGAINING POWER
THROUGH COOPERATIVE ORGANIZATION-
AN EXAMPLE FROM THE DAIRY INDUSTRY3
One of the most successful examples of the
creation and use of producer bargaining power
through cooperative action is provided in recent
organizational developments in the dairy industry.
This movement received its major stimulus with the
formation of two large cooperative federations during
the first half of the 1960’s. One of these
organizations, Associated Dairymen, Inc., covered
much of the central one-third of the nation from the
Gulf of Mexico to the Canadian border and had over
50,000 farmer members in 1970 producing
approximately 20 billion pounds of milk. The second,
the Great Lakes Milk Marketing Federation (which
was later expanded under its new name Great Lakes -
Southern Milk, Inc.), covers much of the nation east
of the Mississippi River (excluding the area in the
extreme northeast). In 1969, this federated group had
34,000 members who produced 13.2 billion pounds
of milk.
The formation of these federated groups was a
reaction to a felt need arising primarily from:
1. Extremely low incomes in dairy farming.
2. Rapid technological developments in the
industry which greatly expanded the
geographic interdependence of milk
producers.
3. A strong conviction among some dairy
cooperative leaders that effectiveness in
government and political relations was basic
to the primary objective of improving
income to dairy farmers.
4. A growing concern over adverse trends in the
consumption of milk and dairy products.
The primary activities of these federated
organizations were directed toward:
1. Co-ordination of bargaining efforts of
member cooperatives for the purpose of
improving the level and alignment of milk
prices.
2. Presenting a unified front in federal milk
market order hearings.
3. Development and use of increased
sophistication in government and political
relations.
4. The expansion, initiation, and co-ordination
of programs designed to increase the use of
milk and dairy products.
5. Providing technical assistance in merger and
consolidation efforts among dairy farmer
organizations throughout the nation.
Guided by the experiences of federated action,
managers of some of these member cooperatives
recommended adoption of inherently stronger forms
of organization. An unprecedented wave of mergers
followed, which between 1967 and 1970 brought
more than 170 local cooperatives and 70,000 milk
producers together in four large regional cooperatives.
Combined milk production of producers in these
organizations was approximately 28 billion pounds in
1970.
The largest of these cooperatives is Associated
Milk Producers, Inc. (AMPI). More than 100 dairy
cooperatives were ultimately brought together to
form this single, fully-merged organization. AMPI
reported 16.1 billion pounds of milk and 2.2 million
pounds of cream produced by almost 44,000 farmer
members in 1972 [1].
Many of the goals and activities of such
fully-merged cooperatives are essentially the same as
those enumerated for the cooperative federations (at
least as regards activities related to bargaining).
2
A detailed account of this development is contained in [ 10 ].
40