xt7tht2g912f https://exploreuk.uky.edu/dips/xt7tht2g912f/data/mets.xml   Kentucky Agricultural Experiment Station. 1963 journals 127 English Lexington : Agricultural Experiment Station, University of Kentucky Contact the Special Collections Research Center for information regarding rights and use of this collection. Kentucky Agricultural Experiment Station Progress report (Kentucky Agricultural Experiment Station) n.127 text Progress report (Kentucky Agricultural Experiment Station) n.127 1963 2014 true xt7tht2g912f section xt7tht2g912f I · I I   I _ . OQ;-·- I
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· —· PROGRESS REPORT 127
I   (Filing Code 7)
UNIVERSITY OF KENTUCKY
AGRICULTURAL EXPERIMENT STATION
l Department of AgrEcuItur¤I Economics
LEXINGTON
V", .

   I

   ‘i ·3—
  HOW MUCH DO FARMERS KNOW ABOUT THEIR COOPERATIVES?
-- A STUDY OF ONE KENTUCKY COUNTY -—
by
’ - Eldon D. Smith
, The legal papers of cooperatives and cooperative laws give the member--patrons the
right to control cooperatives. In actuality, however, member control of cooperative or-
ganizations depends equally on the members' knowledge of these rights and ability to use
them effectively. U
How much do farmers understand of these rights of members? How many recognize
that they are members? How many know how to use effectively their rights as members
in obtaining modes of operation which are in their own interest? What are the things about
cooperatives which are least understood? What kind of member information and education
is needed?
Answers to these questions are not easily obtained, but some clues are now available.
’ An explqratory survey of farmers in a central Kentucky county was conducted in late
1960. E This survey asked a series of factual questions regarding farmers' understand-
ing of basic cooperative principles such as voting rights, who runs a cooperative, the re--
fund principle or principle of operations at cost, and so forth. These were followed by a
group of questions which asked farmers what they would do in various problem situations
requiring the exercise of these rights in order to solve the problems.
» We here report some of the results of this survey, that is, the answers given
to these questions. Since not all of the farmers were members of the primary cooper-
atives in the area, and the sample was small, the answers given may not be completely
representative of cooperative members. However, 42 of the 48 farmers surveyed were
members of one or more of the following types of cooperatives: rural electric, farm supply
purchasing, Production Credit Association, or Federal Land Bank Association. Many are
members of several other types of cooperatives such as milkbargaining, or tobacco mar-
keting associations.
l/ The motivation or willingness to exercise these rights is also required, but this will not be discussed
in this paper.
;/ Th€ COIIIITZY Sl11`V€y€d is ODE with 3.D 2.bOV€-3.V€1'3.g€ 3.1'l'10llI`1t of COOp€I`3.lClV€ activity. ThE COLLHCV has 3. l‘L1I`21l
electric cooperative headquarters, a farm supply purchasing cooperative, a P, C,A, field office and
several cooperatives located outside the county which do a substantial volume of business and have a
l substantial membership in the coimty.
The information on which this dicussion is based is part of a broader study of factors related to the degree
of participation of members in the business affairs of their cooperatives. A part of this study will attempt
to appraise specific means for developing member attitudes favorable to enlightened participation and
sources of specific attitudes.
1 F 

 -4-
VOTING RIGHTS AND MEMBER CONTROL V
General Philosophy
In the survey five questions were asked which attempted to determine whether farmers U U
felt that the members either controlled or had the right to control their cooperative assoc-
iations. These were questions of a general nature which did not measure their under-
standing of w_hy_ farmers did or did not have these rights. Table 1 shows these questions {
(in abbreviated form) and the number of correct and incorrect answers received from the _
group of 48 farmers. 2/
Slightly less than half of the answers given to these questions were correct. Since
these were multiple—choice questions, one would expect to have one third or 16 right on
each question if the farmers interviewed knew nothing and simply guessed. How many .
did quess is not known, but this fact tends to emphasize the conclusion which the data
suggest, namely, that the general concept of member-patron control is not well understood
by the farmers interviewed.
Focal Points of Confusion
What is the source of this confusion? What are the ideas farmers hold that account C
for so many failing to recognize the fact that farmers legally can control these organi-
zations? The detailed answers given to these questions provide some clues.
Of the total of 15 possible incorrect answers to the five questions (including the "don't
knows") that could be chosen by each individual farmer, two (question 1-c and question 3-b)
or 13 percent of the possible incorrect answers, contained the idea that those people who
invest money in cooperatives have the power to control them. $/ But one third, 34 per-
cent of all incorrect answers to the five questions, were accounted for by these two pos-
sible answers (computation not shown). It would, therefore, appear that either (1) the
system of voting rights (one man - one vote) is misunderstood by many farmers or (2) they
do not understand its significance as a device for keeping control in the hands of the patrons
or users rather than in the hands of investors (as investors). These possibilities will be I
examined more in detail lat.er. -
Fourteen of the 48 farmers interviewed stated the idea (question 2-c) that the board
had discretionary power to grant or to withhold from members their right to exercise ul-
timate control over their cooperative association. This accounted for I1 percent of all
§./ In this table and all subsequent taliles, to avoid confusioxmnonresponses were distributed in proportion to the re-
sponses on other questions. Nonresponses were in all cases less than five,
il By investing money we refer here vo funds in excess of the requirements for membership which are usually
nominal. Of course, in credit cooperatives this depends on the size of loan obtained, but membership can
be obtained with only a very small loan.

 -5-
TABLE 1. OPINIONS ON WHO CONTROLS FARMER COOPERATIVES ·
  l
` { I Number Percentage
  of of
Question 9‘ Responses Total
 
` ` 1. Farmer cooperatives are run by:
a. Farmer—Patrons 17 35. 4
=‘ b. Government 1 2. 1
‘ c. People who invest in them 23 47. 9
d. Don't know _7_ 14. 6
Total 48 100. 0
2. In a cooperative farmer-members:
a. Have no say about how it's run 2 4. 2
b. Can run it by voting 21 43. 7
c. Can run it only if board allows it 14 29. 2
d. Don't knowb I1 22. 9
Total 48 100. 0
3. Which is correct:
a. Farmers control way cooperative is run 21 43. 7
b. Controlled by capital suppliers ' 13 27. 1
c. Manager has final authority 5 10. 4
_ d. Don't know j 18. 8
Total 48 100. O
4. Control of farmer cooperatives is in hands of:
, a. Farm Bureau 3 6. 3
b. Government 4 8. 3
c. Member-patrons 31 64. 6
- d. Don't know 12 20. 8
Total 48 100. 0
5. Is a cooperative run by:
a. Government 2 4. 2
b. Member-patrons 24 50. 0
c. All farmers in the area 17 35. 4
- d. Don't know j 10. 4
Total 48 100. 0
Grand total number of responses (5 questions) 240 100
A Grand total correct 114 48
 
3‘Underscoring indicates "correct" answers.
b Includes one nonres onse. .

 -6-
incorrect answers to the five questions. Those men who rationally chose this answer
would seem to have a mental picture of a cooperative which would be appropriate to a
noncooperative corporation in which the patrons have only those powers granted to them
by the board or the stockholder—owners of the business. A controlling interest in the _ V
stock is often owned by the board members themselves. Apparently, they did not under-
stand that they, as cooperative patron—members, grant such power to the board of directors
and not vice versa.
There was little evidence that farmers think of a cooperative as being a government F V
agency, something controlled by the government or as being controlled by general farmers‘
organizations such as the Farm Bureau Federation. In the two questions in which it was e
possible to select an answer suggesting government control of cooperatives or control by ~·
the Farm Bureau (a total of three answer categories) a total of only eight such answers were
given. .
Almost all of the remaining incorrect answers were "don’t know" (34 percent) .. the
others being scattered among seven other possibilities. This suggests that the two pri-
mary errors referred to earlier- are not primarily due to chance resulting from guesses.
but were a result of positive misinformation or misinterpretation of the facts.
Voting Rightsz Membership, and Election of Directors '
Voting rights in cooperative membership business meetings in Kentucky Q/and most
other states are allocated on a one man - one vote basis irrespective of volume of busi-
* ness or amount of stock owned. Membership and voting rights in election of directors and
other business matters are usually available to anyone who does business with the co-
operative and contributes a nominal fee of $1.00 to $10. 00 for a membership. Q To what
extent are the misunderstandings about who has the power to control the organization a
result of lack of knowledge of these simple facts?
The answers given to two questions show, in view of the one-third chance of guessing ‘
correctly, that substantially less than one half of the farmers covered in the survey understood
these matters adequately. Almost one third of the answers were correct (see Table 2). -
The answers to question number 1 in Table 2 suggest that a large proportion (per-
haps a majority) of the farmers in the county is not acquainted with the fact that cooperatives
are "democratically" controlled. Only slightly more than one half indicated that patron-
members are responsible for electing directors even though the election of directors is the
single most influential act by members with respect to exercising control over the policies
of their cooperatives (question number 2).
:5*/ This refers to associations organized under the Kentucky Cooperative Marketing Act(K.. R.S, 272), under the Rural
Electric Cooperative Act (K, R. S. 279). and under Farm Credit Administration charters.
9/ Only farmers may become membew of cooperatives organized under K. R,S, 272. This is for practical
purposes true of farm credit cooperatives despite some exceptions. Any user of electricity may be a
member of 21 rural electric cooperative.

 . ·7· 0
TABLE 2. OPINIONS OF FARMERS CONCERNING I
MEMBERSHIP ELIGIBILITY REQUIREMENTS, VOTING RIGHTS,
AND SELECTION OF DIRECTORS
_ Number Percentage
a of of
Question Responses Total
1. Should each member have:
a. One vote only 20 41. 7
b. One vote per share of stock or 6 12. 5
c. Should it depend on amount of business
done 12 25. 0
d. Don't know LQ 20. 8
_ Total 48 100. 0
2. The board of directors is:
a. Elected by patron—members 27 56. 2
b. Appointed by governor 2 4. 2
c. Selected by manager 5 10. 4
d. Don't know b 14 29. 2
. Total 48 100. 0
3. Who can become a member:
a. Any farmer who wishes to 24 50.0
b. Any farmer who invests money 4 8. 4
c. Any farmer who uses services and pays
a nominal fee 10 20. 8
d. Don't know 10 20. 8
48 100. 0
Grand total number of responses (3 questions) 144 100
Grand total "correct" 57 39.6
a Underscoring indicates the "correct" answer.
b Includes one nonresponse.

 -8..
A still larger proportion did not know the usual requirements for membership in a
cooperative, even though most of them (42 out of 48) were members of one or more co-
operatives. Twenty-four out of 48 said (incorrectly) that any farmer could join a cooper- ‘
ative (without cost or without doing business), 10 did not know and 4 indicated that it would i
require some investment in the cooperative.
Furthermore, in question number 5, Table 1, the most common response, other than _
the correct one (17 and 24 respectively), was that a cooperat:ive is "run by all farmers in _
the area." If farmers believe that any farmer can become a member irrespective of V
patronage or fees (and many have no reason to believe anything else), or that both members
and nonmembers have the right to exercise control over the cooperative by voting, then ‘
there is little reason for members to be concerned about exercising their rights as mem·—
bers even if they understand them. There is also little reason to have a feeling of owner-- `
ship and identification with the organization. To use a time--honored expression, "Every— (
one's business is nobody’s business. " The cooperative logically would be considered as
"everyone's business" by those members who believe that anyone can become a member or
that the cooperative is run by all farmers in the area.
In part, at least, this belief may be due to the rather common practice of involun-— `
tary membership. Patrons of many farm supply purchasing cooperatives are given a
membership when accumulated refunds have exceeded a minimum of $1. O0 or some other small
amount. Commonly, they are not notified specifically when this has been done. Electric
power distribution cooperatives combine a meter deposit and a membership fee often
calling it a meter deposit rather than a membership fee. Credit cooperatives usually de-
duct 5 percent of the loan proceeds for "stock," but frequently fail to mention that this
confers on them a voting membership and associated member responsibilities. Some .
follow the practice of sending a letter of welcome to each new member notifying him
of his rights and responsibilities; this, however, is by no means universal.
Whether an awareness of membership and voting rights is important depends on
whether the member understands the meaning of these facts. This involves an under- (
standing of the process by which responsibility is delegated from the members to the
board of directors and on to the general manager and other employees. This will be
discussed later in detail. However, some indications of the lack of understanding
these processes are shown by the simple lack of information about who hires the
manager of a cooperative. The question was asked. "Is the manager of a cooperative
elected by vote of the members, appointed by the president, or appointed by the board
of directors?" Only 24 of 48 farmers interviewed indicated that the manager was ap-
pointed by the board of directors. Sixteen, on the average, would have answered cor-
rectly if they had simply guessed. 2/
Z/ Data not presented in table form.

 A ECONOMIC PURPOSE AND NONPROFIT OPERATION
A Various information regarding the rights of members, the fact that board mem-
" bers are elected by patron—members, and the like is important only if what happens in
T the cooperative importantly affects the members. Unless the member understands the
potential effects of board actions on him and his neighbors, he has little reason to be
interested in participating in elections of directors or other actions through which he
, expresses his views on the operation of the cooperative.
. Economic Purpose
A To what extent are members aware of the economic purposes of cooperatives? To
what extent do they understand that "true" cooperatives operate "at·—cost" or on a non-
profit basis? Are they able to recognize these benefits when they receive them?
The primary objective of a farmer cooperative is an economic one. As a business
organization a cooperative is distinguished from an ordinary proprietory corporation by
the economic benefits it conveys to farmers primarily as patrons and only secondarily
as investors in the cooperative; that is, economic benefits take primarily the form of de-
creased costs of feed, fertilizer, loanable funds, and other expense items or increased
returns for products sold.
Three questions were asked pertaining to the purposes and distribution of benefits.
Taking into account that some respondents probably obtained correct answers by chance,
it would appear that substantially less than one half of the farmers interviewed have even
a general idea of the economic purpose of a cooperative. Slightly more than one half, 26
out of 48, selected an answer indicating that they recognized a cooperative's purpose to be
that of making more money (profits) for its patrons (see question 1, Table 3). Twenty
of the 48 correctly selected the answer "a cooperative makes profits for the member-
 ” patrons, not for itself" (see question 2, Table 3). Seventeen of the 48 properly indicated
that farmers join and patronize cooperatives to make more income from farming rather
than to get a good return on invested capital or in order to learn to work together.
Nonprofit Operation
Only 17 of the 48 farmers interviewed indicated that a main feature of a true co-
operative is that of turning all profits back to the farmer. Twenty indicated in answer
to another question that the patrons really "owned," i. e. , had a legal claim on, the
difference between income and expenses or what is generally called "savings" by many
` cooperative accountants. §/
§/ The Q¤€$'¢i¤¤$ T€f€FY€d F0 could not properly be classified into any of the specific groupings indicated by
the three tables. Summaries of answers to them are not shown in table form.

 -10-
TABLE 3. OPINIONS OF FARMERS RELATING TO THE ECONOMIC
PURPOSES OF COOPERATIVES
Number Percentage V
of of A
Question ‘1 Responses Total
1. Which is closest to the way cooperatives should work:
Make as much as possible for — `
a. Shareholders 10 20. 8
b. Bggns 26 54. 2 ‘
e. Managers 2 4. 2 `
d. Donlt know 1Q_ 20. 8
Total 48 100.0
2. Which is correct: _ A
a Coops have profits like others 12 25. 0
b. Coops are against. tree enterprise 3 6.2
e. Coops make prgys for patrons, not for
themselves 20 41. 7
d. Don't know 1;); 27. 1
Total 48 100. 0
3. Farmers join and patronize coop to:
a. Get good returns on invested money 6 12. 5
b. _l\/lake more__m_oney from farming 17 35. 4 V
c. Help farmers learn to work together 16 33. 3
d. Don't know j _&_8 .
Total 48 100. 0
Grand total number ol` responses {3 questions) 144 100 6
Grand total "correct" 63 43. 7
3 Underscoring indicates the "correot" answer.

 -11-
‘ AN INTERPRETATION
The language of the previous sections has been such as to suggest that the facts we
have presented are rather shocking. To have so many farmers ill-informed regarding
I facts relating to member control, voting rights, economic purposes, and the principle of
nonprofit or "at—cost" operation would seem to indicate a condition not conducive to opera-
tions geared to member needs. This is not necessarily correct.
Assume that only one-third of all farmers adequately understood these facts and
were capable of, and interested in, using this knowledge (1) to guide their decisions re-
_’ garding the use of cooperative services and (2) to exercise intelligent member control
over the business affairs of their cooperatives. Would this be a serious situation? Prob-
ably not! For Kentucky generally, if purchasing and marketing cooperatives were to do
as much as one third of the total business volume in marketing and purchasing, it
would represent a very large increase in volume of business. Estimates for the 1954-55
fiscal year indicated that cooper/atives did between 16 and 17 percent of the retail feed,
fertilizer, and seed business. 2 A great deal of cooperative business volume is accounted
for by people with little or no awareness of the significance of the cooperative form of
_ business. Moreover, students of democratic political participation by voters concede
that a democracy can function quite satisfactorily with a small, actively participating,
informed minority and an in-active majority. E/ No doubt the same principles apply in
cooperatives.
There are two flaws in this argument, however. We have assumed that those who
know about the principles of "democratic control" and "operations at cost" understand
their significance. For this knowledge to have meaning they must be able to interpret
these facts in terms of (1) the relative advantage or disadvantage of using the services
of their cooperative and (2) the ways members may exercise their influence to affect
control over the business affairs of the cooperative which is consistent with their ob-
jectives.
Previous research tends to suggest that understanding of these principles does
help the farmer make a wiser choice between the use of cooperative services or the
services of some other establishment. E/ However, this is not so true with respect
to members' ability to effectively exercise control over the management of the co-
operative. This will be discussed in the following section.
- 2/ No later estimates are available.
LQ! David Sills, The Volunteers (Glencoe Free Press, Glencoe, Ill. 1957).
l g/ Smith, Eldon, "Check Your Merchandising, " Cooperative Digest, june 1961, p. 13.

 -12-
FARMERS” ABILITY TO USE RIGHTS TO CONTROL OVER
COOPERATIVE ORGANIZATIONS
ln the present survey study a group of problem situations was developed. Farmers - ~
were asked to consider these situations which involved, in all cases, the exercise of these l
fundamental member rights in order to affect a solution or to obtain information necessary
to a solution. They were required to formulate as an answer (I) what they would do in such
a situation or (2) how they would deter mine certain facts which would be needed in formulating ,
a solution. — `
A summary of the "free response" answers was recorded by the interviewer. These ‘
summary statements were then classified into major groups of ideas. The answers so
coded or classified were reclassified as "right" or "‘m‘0ng" on the basis of whether the -
farmer indicated that he had any idea of what procedure should be followed or who should ‘
be contacted (or both) to effect a solution or· obtain the necessary information.
A detailed analysis of each question will not be attempted. However, two questions
will serve to illustrate the answers given.
The first question is a rather simple one designed to ascertain whether these farmers ·
knew what sources of information they could tap to determine certain facts regarding their
cooperativels financial success and/or disposition of net margins.
In interpreting these results, it is well to keep in mind that probably a relatively
small proportion of farmers could satisfactorily interpret a financial statement without
assistance, and that a complete reaudit would be both expensive and legally difficult to ` .
obtain if the board and manager were to object. But, disregarding these considerations,
only a little more than one third of the farmers interviewed had even a vague idea of how
to obtain relevant information regarding the performance of their cooperatives. Only l
slightly more than one fourth recognized that the financial statement would be a satis-- _
factory source of information (if they could understand iti. g
Another question provides some insight into the question of whether these farmers l
would know how to collectively bring acting to correct an undesirable situation if it were A
found to exist. This involves the very straight--forward problem of replacing an in-
competent manager.
In no cooperative that we know of is the membership empowered to vote directly
for amanager. The job of manager is typically an appointive position Yet, nearly one
fourth of the farmers interviewed indicated that they would attempt to "vote him out" or
words of similar meaning. TW€UlY’OU€ (44 percent) said that they would bring their
wishes to the attention of the board of directors. indicating at least a general aware-
ness of the fact that the manager is appointed by the board.

 -13-
i TABLE 4. ANSWERS TO THE QUESTION "IF THE COOPERATIVE
. HAD NOT RETURNED ANY PATRONAGE REFUND OR STOCK DIVIDEND, »
HOW COULD YOU DETERMINE WHETHER THEY SHOULD HAVE DONE SO?"
 
Answer Number Percentage
 
‘ Examine books or financial statement. 13 27
t _; Have an audit 4 9
Ask the manager. 3 6
Other 2 4
Don't know Q g
. Total 48 100
 
TABLE 5. ANSWERS TO THE QUESTION "IF THE MANAGER OF
A COOPERATIVE WERE VERY INEFFICIENT, IS THERE ANYTHING
THAT YOU AND OTHER MEMBERS COULD DO TO GET HIM REPLACED? WHAT?"
 
Answer Number Percentage
Appeal to directors. 20 42
Petition directors. 1 2
Vote him out. 11 23
Other 4 8
Don't know 12 _2§_
Total 48 100

 -14-
In this situation an important question is "Why hasn't the board acted before?" .
Either the board was derelict in not observing the performance of the manager more (
closely or for other reasons was not willing to dispose of him. In either event, some A
action to improve the performance of the board would be central to the problem. How- l
ever, only one farmer suggested some action to replace directors at the next election
as a means of correcting the situation. Moreover, even though such actions require
the support of other people, ogg one farmer made a statement which suggested the de--
velopment of group pressures by the members. ¢ »
In response to a situation involving the hiring of relatives of board members . I
(nepotism), only eight members or one sixth suggested the possibility of establishing l
a rule against the practice, and six suggested that the solution to the problem was to
vote in new directors.  
The picture we get, then, is one of relatively limited ability to use the power of
the vote and the other legal protections given to members of cooperatives. It is true
that these were abstract situations far from the experience of most members. Pos-
sibly, if they were motivated to do so, some of these men might have been able to fg}
sources of information of these matters. However, in view of the fact that such a high 4
proportion recognized neither (1) the fact that they would receive the benefits from im-
proved management nor (2) their voting rights as members, it is unlikely that they would
be aware of, or interested in, taking action to get such information or to do anything about I
the situation. V
DOES KNOWLEDGE OF COOPERATIVE PRINCIPLES HELP I
MEMBERS CONTROL THEIR COOPERATIVES?
Do farmers who know basic cooperative principles do a good job of figuring out
solutions to problems in their cooperatives? Do farmers understand the meaning of
these principles well enough to put them to practical use? ’
To simplify matters we will call ability to solve problems involving the use of mem-- .
bers' rights "member participation ability."
To see whether there is a close connection between knowledge of principles and mem·~
ber participation ability, a "score" was developed for each. The "cooperative knowledge
score" is the number of correct answers to several multiple—choice questions which were
asked. The "participation ability score" is a very crude one. It consists of the number
of "problems" to which the farmer gave an answer which could be regarded as adequate
under some assumed set of circumstances. If he said he would register a complaint
with the manager, this was judged a correct answer if it were not clearly inconsistent
with the conditions described in the problem, and if it were conceivable that the manager
might respond to his complaint.

 . -15-
From the total number of questions, seven questions were selected which, on the .
` basis of technical criteria used in social psychology, appeared to comprise 2. good "scale"
{ or measure of knowledge of voting rights and other principles relating to control pro- A
cesses of cooperatives. ly A similar "scale" of what we have called member partici-
pation ability was constructed which appears to measure how well the farmer could judge
how to solve problem involving the use of his rights as a member, such as how to re-
place an inefficient manager, etc. §/
. While this is not precisely correct in general, if the knowledge of voting rights
and other principles were all that was required to solve problems involving member
participation ability, we would expect the two scores to be closely correlated. That is,
when one was high the other would be high and when one was low the other would be low.
This would appear on a chart as a series of dots or checks which tend to fall along a
line as illustrated in Fig. 1. Each dot or check on the verticle axis represents the mem-
· ber-participation score. On the hortizontal axis, the symbols represent the knowledge-
of-control processes score of a single farmer.
6
2 5 "
O
I2
E` /
E 4 xx xxxxx xxxxx
Q
¤
.9
EL 3 x xxxxx x xx _
FE
Qi 2 xx xxxx xxxxx
.*3
E
Q)
2 I  xx x
O  
. I 2 3 4 5 6 7 8
( Knowledge of Control Process Principles Score
FIG. 1. - HYPOTHETICAL "HIGI-I" DEGREE OF RELATION BETWEEN FARMERS' KNOWLEDGE
OF CONTROL PROCESS PRINCIPLES AND MEMBER PARTICIPATION ABILITY SCORES
 
‘· 2/ Coefficient of reproducibility I O. 916.
L2-! Coefficient of reproducibility :0. 934 for six items or questions. All scale anal sis was done b Dr. C.
Y Y
Milton Coughenour, Department of Rural Sociology, University of Kentucky.

 -l6-
If these checks were grouped closely along a line, it would tend to suggest that
knowledge of the principles relating to control processes affects the ability of the mem-
ber to participate or solve problems involving use of his rights as a member. However, »
Fig. 2 shows that there seems to be no such effect. Farmers with the highest scores on
knowledge of principles (scores of 7) appeared to have no more ability to solve problems _
(member participation ability) than those with scores of only 1 or 2. Apparently, know-
ledge of cooperative principles has very little to do with a farmer's ability to decide I
what to do in relation to obtaining desirable changes in the operation of the cooperative of g y
which he is a member. *
5 x x x _
2 5 X X X X
8
  ‘
g 4 x xxx x xx
..D
<:
¤
.9
E 3 xx x xx x
E
E 2 xx xx x xx xx
is
E .
QJ
2 I x xx
O **·—·’$—·"’§"·—’5·—"?-*?"‘ "%"‘—<_‘ X
I 2 3 4 5 6 7 8
Knowledge of Control Process Principles Score ,
FIG. 2. - ACTUAL RELATION BETWEEN FARMERS' KNOWLEDGE OF CONTROL
PROCESS PRINCIPLES AND MEMBER PARTICIPATION ABILITY SCORES
IMPLICATIONS FOR COOPERATIVES ‘
What do the results mean to cooperatives and educational agencies that work with
them and their members? Obviously, their educational job is far from completed des- ·
pite active attempts in the past several years to educate farmers and farm youth regarding
cooperatives. Both in terms of potential increases in business volume and in terms of
encouraging members to exercise intelligent member control of their cooperatives, a
challenging educational job lies ahead which management can ill afford to ignore. This
job is the education of members about their role and rights as members.
The type of educational program which is likely to be most fruitful involves many `
issues beyond the scope of this research. However, the information that has been ob-
tained indicates that an effective program must do more than communicate facts of

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~ cooperatives , such as their purposes , the principles of at-cost operations, democratic con- g
_ trol procedures, and limited returns on investment and related matters. The program
must, in some manner, teach members something about how to use the legal rights, which
their charter and bylaws provide, to bring about appropriate and feasible reorientations of
policy and procedure. For example, it is important for the member to know that details
V of operations are the specific responsibility of the manager, and that specific suggestions
or complaints should first be brought to his attention or to the attention of an appropriate
`F department head. But it is equally important for him to know that the board of directors
establishes general policy and evaluates and hires or fires the manager.
‘ Since members apparently do not infer from their knowledge of democratic election
procedures and other "principles" of coopera