1955, there were 1,476 artificial breeding organizations in the United States (fig. 13). They served nearly 600,000 herds and owned or leased about 2 450 bulls. In 1954 they provided breeding service for over 5.1 million cows (table 17). Not all of these organizations were cooperatives but a high proportion of the business of artificial breeding of dairy cattle is handled by farmer associations. This form of organization is expected to expand further and to have far-reaching effects on the average quality of dairy animals and on the efficiency of milk production.

Farmers obtain many advantages through these associations. By means of artificial insemination, a single bull is sufficient for several herds. Farmers with small herds who could not otherwise afford the services of outstanding sires can obtain them through the cooperative. It is possible to increase production greatly by keeping only bulls that can transmit high producing characteristics to future cows.

Most of the associations are set up on a nonstock basis. They may be independent locals, federations of locals, or large centralized cooperatives.

CREDIT as in marketing farm products and in buying farm supplies, cooperatives bring many business advantages to farmers and ranchers. In particular, they have made possible improved credit services at lower costs. They also assure that farmers with a sound basis for credit will have a dependable source of credit in years of low farm income as well as in years that are better for farming.

Many farmers belong to more than one credit cooperative. For this reason it is difficult to determine the exact number of farmers receiving direct benefits through the Cooperative Farm Credit System supervised by the Farm Credit Administration. However, it is conservatively estimated that between 2 and 3 million farmers borrow through their national farm loan associations or their production credit associations, or are members of cooperatives whose operations are financed in part by loans from the banks for cooperatives.

Farmers and their marketing, supply, and business service cooperatives in recent years have been borrowing about $2 billion annually from the Cooperative Farm Credit System. They also have had about the same amount in loans outstanding from the System from year to year.

The direct advantages, of course, accrue to farmers who use cooperative credit to help finance their farm businesses. However, most other farmers who use credit benefit indirectly from the pace-setting effect of the Cooperative Farm Credit System on terms and

costs of credit provided by other lenders.

Local credit cooperatives within the Cooperative Farm Credit System are the 1,100 national farm loan associations and the 498 production credit. associations. As their names imply, these associations provide a means for farmers to obtain mortgage or operating credit, respectively. In addition there are 12 Federal land banks, 12 production credit corporations, 12 Federal intermediate credit banks, and 13 banks for cooperatives.

Early in 1955, farmers had more than $193 million invested in this System. These organizations had built up reserves and surplus accounts totaling $571 million.

The Cooperative Farm Credit System has expanded and improved its services gradually by various steps and stages over a period of nearly 40 years.

The growth in services offered, and the use and importance of the System have been accompanied by, and in large measure been made necessary by, the rapid specialization and mechanization of farming.

Farmers have had to increase their investments in their farm businesses as they have found more ways of mechanizing farm operations, as they have. improved their soil, and as they have adopted measures to conserve their soil. It took larger investments as they electrified their farms and homes, and as they improved their livestock, and their buildings. Rising rural standards of living, including such things as the installation of water systems, and the purchase of cars, trucks, radios, televi

sion sets, and home appliances all have necessitated an increased cash outlay.

Modern farming methods have also increased farmers' needs for cash. They need money to buy fertilizer, lime, feed, seed, petroleum products, insecticides, fungicides, weed killers, and a host of other items-many of

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these unknown or hardly dreamed of 40 years ago.

Farmers' needs for credit also have grown as they have integrated their business as they have taken on responsibility for acquiring their farm supplies and marketing and processing their products through cooperation with other farmers.

HILE the first units of the Cooperative Farm Credit System were not authorized until 1916, farmers organized cooperative banks as early as the 1870-90 period.

About 1874, for example, farmers organized the Granger Bank of California with headquarters in San Francisco. Incorporated under State statutes, it was authorized to issue capital stock in the amount of $1 million. Shortly after its establishment it had paid-in capital amounting to more than $700,000. Loans were made directly to farmers and their cooperatives. This bank made loans on grain, wine, raisins, and other salable fruits stored in warehouses. By December 31, 1890, it had assets of $2.3 million.33

Two years later, in 1876, Grangers organized the Patrons' Cooperative Bank of Olathe, Kans., as part of the Johnson County Cooperative Association. Confining its business to the immediate locality, this bank was credited with helping to reduce interest rates in that vicinity. On January 1, 1891, it had $198,888 in assets. 34 Since the Cooperative Farm Credit System has been in operation, farmers have made similar efforts to finance their busi

own a bank was the purchase of one at Beech Grove, Ind., in 1939. The principal stockholders were the Indiana Farm Bureau Cooperative Association and the Indiana Farm Bureau Federation. Other stockholders were several county Farm Bureau cooperatives and Farm Bureau credit unions. It operated successfully for about 10 years. However, it was sold to the Merchants National Bank of Indianapolis because of the difficulty of operating a specialized bank and at the same time serving the local community as required by its certificate of convenience from the State government. At one time as many as 20 county Farm Bureau cooperatives in Indiana used the bank and were responsible for 70 percent of its loans and discounts. Its assets exceeded $1 million.

The National Cooperative Financ ing Association was organized in Columbus, Ohio, in June 1944. The purpose, as the name implies, was to assist cooperatives, rural and urban, to obtain adequate financing. Charter members were National Cooperatives. Inc., Albert Lea, Minn., 6 farmer cooperatives operating on a regional basis, and 2 wholesale associations serving urban cooperatives. Up to 1955. this cooperative had not been active. However, the Cooperative League of the U. S. A., Chicago, and the Farm Bureau Insurance Companies, Columbus, Ohio, were engaged in putting the association into operation to help cooperatives expand.