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One quarter of a million farmers own and control the Farmers National Grain Corporation through its 27 members, consisting of pools, elevator groups, and regional sales agencies, according to the corporation's membership estimates in November, 1930. Under a unified plan these growers market their grain through the National.

In the first three and a half months of its operations in the 1930–31 crop year the Farmers National Grain Corporation handled over 50,000,000 bushels of grain. Of this amount, more than 40,000,000 bushels was wheat, about onefifth of which was sold for export into eight different foreign countries. In addition to this amount, millions of bushels of grain have been marketed by stockholder agencies, operating under the direction and control of the National.

Most of this grain was originated by cooperative members of the National Corporation. The latter acts as sales agent for the cooperatives, merchandises the grain through regular channels, and secures for its members all of the benefits and profits that accrue from warehousing, improving the grades, and merchandising. These profits belong to the member cooperatives and in turn to the farmers who compose the membership. .

The Farmers National Grain Corporation was established
October 29, 1929. Its head office is at 343 South Dearborn
Street, Chicago, Ill.

Growers own and control the Farmers National Grain Corporation. It was established by cooperatives, with the advice and assistance of the Federal Farm Board. The corporation is not a governmental institution nor a subsidiary of the Farm Board. This organization, with an authorized capital stock of $10,000,000, was the first national cooperative organized in accordance with the provisions of the agricultural marketing act.

Various kinds of grain are marketed by the corporation, including wheat, oats, rye, barley, corn, buckwheat, flax, and grain sorghums. Every grower in this country has the privilege of selling his grain through the National.

The grain corporation was brought into existence by growers in order to centralize their cooperative marketing efforts, to unify the activities of all farmer-owned grain agencies, to minimize speculation, to avoid duplication of marketing machinery, to eliminate com

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petition among grain cooperatives, and to enable grain producers to exert a stronger stabilizing influence on market prices.

Plans for the Farmers National Grain Corporation were launched by representatives of the principal grain cooperatives at a meeting held in Chicago on July 26 and 27, 1929. This conference was called by the Federal Farm Board.

NATIONAL SET UP BY COOPERATIVES At the time the National was formed there were approximately 4,000 cooperative grain associations in the United States. The grain corporation was established by representatives of the wheat pools, cooperative sales agencies, farmers' elevator associations, and general farm organizations, such as the American Farm Bureau Federation, the Farmers Educational and Cooperative Union of America, the National Grange, and the Farmers' Equity Union.

Great care was taken in establishing the National so that eventually it will become entirely independent of any outside aid or supervision. Reserves are being set aside, and the corporation will be developed to the point where it ultimately will be fully capable of financing and managing itself. At all times the Federal Farm Board will further the interests of the organization in assisting it to serve the grain farmers of the country to the best advantage.

The management and policies of the National must be satisfactory to the Farm Board and the corporation's records open to inspection and audit so long as it has money borrowed from the board. The board does not supervise the corporation; it acts only in an advisory capacity to the manager and other officials.

Large sums of money are required to carry on the operations of the Farmers National Grain Corporation. It borrows but a relatively small amount of its money from the Federal Farm Board. Most of the money used by the National is loaned to it by private or commercial banks and Federal intermediate credit banks, and some from the sale of stock to its member farmers' grain cooperatives.

Any grain cooperative meeting the requirements of the CapperVolstead Act may become affiliated with the Farmers National Grain Corporation.

ORGANIZATION BEGINS WITH FARMER Organization of the National begins with the farmer. The producer is linked with this nation-wide sales agency as indicated on the accompanying chart.

The individual grower's hook-up with the central sales agency in Chicago is in one of two ways, depending on the kind of organization that exists in his section of the country.

First. Where the pool plan is followed, the grower takes out membership directly with one of the pools, which in turn owns stock in the National Corporation.

Second. Where the grain is handled through a regional elevator association or a regional sales agency, the grower takes out stock in a local association in his own community. The local in turn owns stock in an elevator association or a sales agency. These regional organizations own stock in the Farmers National Grain Corporation.

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The Farmers National Grain Corporation is owned and controlled by growers under a centralized plan charted above. Growers partici-
pate in the control of the National either by taking out membership in a wheat pool or by buying stock in a local elevator association, which
in turn owng stock in a large-scale cooperative. In some cases growers may buy stock direct in a sales agency.

The corporation's stockholders are divided into wheat pools, elevator associations, and sales agencies. The farmer's grain is delivered
to the local associations or pools, and it is sold under the triple-option plan controlled by the National.

The Federal Farm Board's money is loaned to the National, which in turn advances it to farmers through cooperatives.


In some cases growers may own stock direct in regional sales agencies.

The Federal Farm Board makes loans to grain cooperatives only through the Farmers National Grain Corporation. This money, together with funds secured from other sources, is in turn loaned to regional organizations, which include the pools, elevator associations, and sales agencies. Regional pools advance the money direct to individual farmers. Elevator associations and sales agencies pass the money down to farmers through local cooperative associations. When the farmer borrows through a cooperative he signs a marketing agreement giving the association authority to pledge the grain as security.

TRIPLE-OPTION PLAN Under a triple-option plan the member grower has the privilege of selling his grain through the cooperative in one of the following ways:

First. The farmer sells his grain for cash at the competitive market price, receiving payment in full at the time of delivery.

Second. Grain is placed in storage, to be sold later at the call of the grower. At the time of delivery the grower receives a partial cash advance, the remainder being paid when the final settlement is made. Deductions are made for marketing costs.

Third. Grain is placed in a pool and the producer receives an initial cash advance at the time of delivery. Subsequent advances may be made as the grain is merchandised. Final settlement is made when all of the grain in a pool is sold, and the grower is paid on the basis of the average price received for all the grain entered in the pool, grade and quality considered.

A farmer member delivering grain to the cooperative under either the first or the second plan described above receives patronage divi. dends on the basis of the number of bushels he delivers. The third, or pool plan, is operated on a nonprofit basis and all proceeds are returned to the growers after the actual marketing costs and a small amount for reserves have been deducted. The grower retains ownership in the reserves in proportion to the amount he contributes.

A nonmember may sell his grain to the cooperative. He is merely paid the market price and does not share in the profits of the organization.

PROFITS GO TO FARMERS The Farmers National Grain Corporation acts as sales agency for the cooperatives. Profits of the corporation belong to the cooperatives and in turn to the member farmers. ,

The National Corporation has contacts with flour and feed mills all over the United States and also with buyers in foreign countries. Although headquarters of the National are in Chicago, shipments of grain from the various cooperative agencies are directed over the shortest possible route to the mills in this country or to docks for export.

As indicated on the accompanying map, district branches of the Farmers National Grain Corporation are operated at Pendleton, Oreg., for the Pacific Northwest; at Kansas City, Mo., for the near

na the pools memecong the one th in the farmer thesis

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The above map shows the location of the Farmers National Grain Corporation and its branch offices, local agents or representatives, and offices of its 27 stockholder member associations. Through these organizations approximately 250,000 farmers market their grain under a centralized selling plan operated by the National Corporation, with headquarters in Chicago.

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