Page 27 - DMGT509_RURAL MARKETING

Rural Marketing

Notes In the mid-1980s, as the economic situation of the nation’s farmers worsened, the Farm
Credit System incurred steadily growing losses, necessitating further federal assistance.
Successive farm credit legislation enacted in 1985, 1986, and 1987 provided this assistance
along with authority to reorganize the system. Of 13 banks for cooperatives, 11 have since
merged into the National Bank for Cooperatives (CoBank). The federal intermediate
credit banks and federal land banks have also merged in each district, as have many
production credit associations and federal land bank associations.
Producers’ and Consumers’ Cooperatives

Producers’ cooperatives have been formed within the fishing industry for purposes of
marketing, purchasing marine gear, providing miscellaneous services (dock maintenance,
unloading), and bargaining collectively. In the retail food industry, consumer-goods
societies provide goods and services for more than half a million members. Grouped
around a core of supermarkets, in many areas, are substantial furniture, pharmacy,
hardware, optical, and service-station operations. Most of the local consumer-goods
cooperatives obtain their supplies from full-line cooperative grocery wholesale
warehouses. These warehouses, in turn, buy from a central purchasing, manufacturing,
and merchandising service owned by and operated for the wholesale cooperative
associations throughout the United States, Canada, and Puerto Rico.
Housing cooperatives classified with consumer goods, own some developments with
individual houses that may be new or rehabilitated, but most holdings are large apartment
developments. Members of the housing cooperative actually own a share of the cooperative
corporation. That share gives the member the right to occupy a particular unit. The cooperative
corporation, however, is the legal owner of the property, and is responsible for meeting
financial obligations such as blanket mortgage payments, property taxes, and management
costs. The members determine how the corporation will fulfil these responsibilities through
participation in membership meetings. According to the U.S. Census Bureau, in 1990 about
630,000 housing units in cooperatives provided shelter for 1.5 million people. Housing
cooperatives formed to develop housing are of two types, sales and management. The sales
type constructs dwellings but dissolves on completion and sale of dwellings to individual
owners; the blanket mortgage insured by the Federal Housing Administration is replaced
by individual mortgages as each unit is sold. The management type continues in existence
for the purpose of managing the property after construction is completed. Most housing
cooperatives today arise out of sponsoring organizations. The areas of land purchase,
architectural design, financing, incorporation and construction are too specialized for families
to master on their own. Sponsoring organizations include churches, trade unions, veterans’
groups, private foundations and other cooperatives.
Cooperative Service Organizations
Credit unions, group health plans, cooperatively oriented insurance companies and
memorial (funeral) societies are some of the important types of cooperative service
organizations. Credit unions act as savings institutions and provide loans at favourable
rates to their members; in 1990 membership was about 55 million and total assets exceeded
$198 billion at U.S. federally-insured institutions. Group health plans, including those
sponsored by communities, consumers, unions, and employers and employees jointly,
provide millions of people with needed health care every year.
Among other cooperative associations formed to meet special needs are rural electric and
rural telephone cooperatives and day-care and cooperative schools. Student housing

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