Page 26 - DMGT509_RURAL MARKETING

Unit 1: Rural Marketing – An Introduction

14. Once a firm has established one of its brands as a leader it diversifies to include Notes
complementary:
(a) price (b) products

(c) sales (d) value
15. ........................ manufacturing cost have a major bearing on how well it can be sold in the
market.

(a) goods (b) cost
(c) credit (d) product



Case Study Farm Cooperatives

T have formed cooperatives for many purposes, as given below:
he cooperative movement in the U.S. has been strongest in rural areas. Farmers

1. Marketing of produce,
2. Purchasing of production and home supplies,
3. Provision of credit.
Farm marketing associations are the most important type of agricultural cooperative.
Farm purchasing cooperatives rank second in importance. The modern farmer-member
who depends increasingly on off-farm products, can realize maximum savings by ordering
goods through cooperatives. Regional cooperatives order some items from manufacturers
and produce others in their own plants. The most important manufactures of these
cooperatives are feed, fertilizer, and petroleum products; other cooperatively produced
items include paint, lumber, and farm equipment. The cooperative petroleum industry is
one of the most complex of the industrial enterprises; it includes oil wells, refineries,
pipelines, storage facilities, and service stations.
Trends in agriculture since World War II have vastly increased the size of farmer
investments in land, buildings, and equipment and, therefore, the need for farm credit. A
cooperative farm-credit system satisfies this need through land banks, production credit
associations, 12 district banks and 1 central bank for cooperatives, and rural credit unions,
all of which furnish loans and credit to farmers. Passage by the U.S. Congress of the Farm
Credit Act of 1916 created the 12 federal land banks, the first credit program established by
the federal government and the forerunner of what has become the largest cooperative
credit system in the world, the cooperative Farm Credit System. Initially capitalized by
the federal government, the entire system has been owned by its borrowers since December
31, 1968. The Farm Credit Act of 1971 expanded the percentage of long-term loans to 85
percent of market value, broadened coverage to include rural homes owned by non-
farmers and ranchers, and allowed the production credit association to provide credit to
commercial fishers and to farm-related businesses. The Farm Credit Administration, a
government agency, regulates the banks and associations of the system in the public
interest, and the borrower ownership of the system has no effect on that responsibility.

Contd...

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