—Lancaster Farming, Saturday, January 27,1979 100 Farmer co-op council He pointed out that cooperatives have sought market power more often than they have achieved it, and often they appear to have more power than they actually possess. This is due, he said, to the general practice of open membership and freedom to leave a cooperative. The agricultural economics professor noted that because of its inability in all but rare instances to control industry supply, a cooperative’s market share alone is a much less meaningful index of market power than is a firm’s share in the industrial market, where high market shares are often correlated with high entry barriers. Mueller concluded by saying that “it is imperative that any so-called ‘reform’ of the Capper-Volstead Act recognize the unique and fragile nature of market power held by most cooperatives.” Cooperative Financial Planning The serious financial situation that inflation has created for farmer cooperatives was discussed by Gail N. Brown, partner. Touche, Ross & Company, San Francisco. He said the cost of capital has forced some cooperatives into excessive short-term borrowings with attendant high interest rates and increasingly restrictive covenants. Brown suggested several ways cooperatives can un prove their financial positions including: sale of preferred stock; debt financing through commercial banks, in vestment banks and insurance companies; long-term facility financing; sale of a cooperative’s own paper: leasing; financing through industrial revenue bonds and facility bonds; and operating arrangements with non cooperative corporations and corporations formed by cooperatives. The San Franciscan noted that provisions of the Revenue Act of 1978 should facilitate build-up of unallocated earnings for cooperatives. He pointed out that this new law, which applies to all Subchapter T cooperatives, allows cooperatives to use the Investment Tax Credit, Energy Credits, and Job Credits. In addition, he said, the law permits cooperatives which don’t use the credits to allocate them to members. Brown emphasized that, now and in the future, the basic equity of cooperatives must continue to be provided by members. All other methods of increasing capital demand, he said, depend in large measure on that strong equity base. USDA’s Cooperative Programs Kenneth D. Farrell, administrator. Economics, Statistics and Cooperatives Service, U.S. Department of Agriculture, assured his audience that cooperative programs will retain high visibility and priority within his agency and USDA. Farrell stated that all information and education func tions and publications of the former Farmer Cooperative Service will be retamed by ESCS. He added that ESCS has Your calves are bom WEAK! They need more IRON! savAcafi ORAL IRON TRIAL OFFER 33 Calf Size Pump Dispenser Suggested Retail 5.95 Plus Shipping + .55 6.50 Trial Discount - 1.50 Total 5.00 (Continued from Page 99) also created three new program divisions: Cooperative Marketing and Purchasing, Cooperative Management, and Cooperative Development. The ESCS administrator cited examples of major economic and policy issues, confronting agriculture and cooperatives, which he said his agency should be prepared to address. They included: organization and performance of agricultural markets, procurement and use of capital, public policies toward agricultural cooperatives, and improved market access and par ticipation for low-resource agricultural producers. Farrell said that much needs to be done to further define the major issues and priorities toward which ESCS should direct its resources. He called upon the cooperative of ficials present to help develop a strong, responsive program to serve the changing needs of agriculture and cooperatives, and in turn, the public interest in food, fiber and agriculture. NCFC President Kenneth D. Naden reported that legislative achievements during the 95th Congress marked the most successful two years m the history of his organization. The achievements included enactment of legislation: extending the investment tax credit to cooperatives, deregulating natural gas prices, and authorizing con- 'Jf. s ■■■■ 'C" ■■■■ V ' ia« « cti ivArafj lomalimwl 1*<(«IOMi UCAIFSiZL ** «*«T|NT| T* f 3&*ix..'...:..' Most Successful Year Boost your corn profits with UNIPEL Starter Special 13-34-10. 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Significant historical Pennsylvania newspapers