A theoretical analysis of marketing cooperatives indicates that in imperfect markets where cooperative members possess the resources to expand production to levels where their marginal costs equal their marginal returns, both producers and consumers are better off than if the producers sell smaller output quantities to investor-oriented firms at a lower market price. Although the United States government has supported the formation and operation of many small-scale marketing cooperatives in the southeast, their success has been low.

This thesis describes one approach used to increase the viability of small-scale vegetable marketing cooperatives through a federated cooperative, the Horticultural Producers Federation (HPF). The HPF provides marketing and management services that address specific market failures and intra-firm inefficiencies encountered by its member cooperatives. HPF services include record keeping, market information, financial planning and management, accounting and payroll, educational and technical support. centralized marketing, and a newsletter. The development and implementation of these services is described in this thesis as is the cooperatives' evaluation of these services through the five year duration of the study. The cooperatives' final evaluation of the services and the HPF indicated that on average they were more than satisfied with the individual HPF services and the impact of the HPF on them and their members.

Future challenges for the HPF include the development of more services by the HPF or other agencies to address a few remaining problems. Services which would target areas of concern include centralized computer support; public relations and promotion activities; as well as member, director, and management training. The large majority of cooperative members which are part-time farmers also poses a significant challenge. Until these farmers gain the resources and expertise to intensively manage their operations, the individual cooperatives and the HPF centralized marketing service will face problems of under production and poor quality.