2012 is the International Year of Cooperatives and provides an opportunity to highlight the importance of the cooperative business structure to the agriculture industry. Chuck Conner, president of the National Council of Farmer Cooperatives says 2012 is also a great time to show off just how important farmer cooperatives are to the success of the farmer.
The cooperative system has played a vital role in the agriculture industry. As 2012 is celebrated as the International Year of Cooperatives, Chuck Conner, president of the National Council of Farmer Cooperatives says it is an opportunity to highlight the cooperative business structure and its importance to agriculture.
“I think 2012 is an appropriate year to celebrate farmer cooperatives because it is something we reflect on and are thankful for – but it is also something we need moving forward,” he says. “We believe coops represent a business structure that is going to enable us to meet so many global challenges we are going to face down the road.”
Part of the success of cooperatives in the agriculture industry, Conner tells Brownfield, is because they are farmer owned. “We believe in the power of the American farmer,” he says. “Their work ethic is remarkable and they are capable of doing incredible things.” “When you give the farmer the power to come together through their cooperative,” Conner notes, “they are able to do things that they probably would be unable to do for themselves – and they become a strong force.”
A force that Conner says, will enable farmers to meet those future demands upon the agriculture industry.
Soon after the adoption of the Rural Electrification Act in 1935, Indiana Statewide became the first electric cooperative association in the nation. Today, Indiana Statewide Association of Rural Electric Cooperatives provides electricity to nearly 500,000 consumers and businesses in parts of 89 of Indiana’s 92 counties.
Like other cooperatives, Indiana Statewide Association of Rural Electric Cooperatives is celebrating 2012 as the International Year of Cooperatives. Katy Stegall, Development Coordinator with the Indiana Statewide Association (of Rural Electric Cooperatives) tells Brownfield keeping in step with the cooperative principles; they are giving back to the community.
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In Orange County Indiana the town of Paoli had just a few options for residents to do their shopping. Debbie Turner, a past steering committee member for the Lost River Market and Deli says while those places serve a purpose, the community felt they were under served. “We would often ask members of the community how often they would go over an hour away for a major grocery shopping excursion,” she says. The general answer was once a month. Turner says the question then became “How do we keep them buying here?” and “How do we keep their dollars local?”
Lost River Market and Deli is Paoli’s member-owned food cooperative dedicated to serving the needs of local growers, producers and consumers.
They operate on the seven cooperative principles, one of which is concern for the community. Turner says between the Orange County farmer’s markets and the local vendors that supply the store they generate over $250,000 every year that wasn’t in circulation before. She tells Brownfield it’s more than just reinvesting into the community, “it’s about the power that you have to make that change.”
In its fifth year, the Lost River Market and Deli in Paoli, Indiana is holding its own and continues to come together to support their local community.
Regional cooperatives play a large part in the agriculture industry. Growmark, based in Bloomington, Ill. began in 1927 providing services to farmers in Illinois. Over the past 84 years they have expanded to cover not only Illinois, but – Iowa, Wisconsin and Ontario, Canada. President and Chairman of the Board Dan Kelley says the most important thing is cooperatives are owned by the customer. “They have input.”
He says one of the reasons it works is because cooperatives understand the customer better than anyone else. “And they should,” he says. “Afterall, cooperatives are owned by the customer.”
Kelley tells Brownfield cooperatives work at the grassroots level and the benefits of that is bringing the customer quality products, service and knowledge. It also means sharing in the profits of those organizations. That has been a great benefit to the agriculture industry.
Moving forward, Kelley says the future of cooperatives is very bright. He adds the future is really in the quality of people that we have to continue to continue to deliver information to our owners. “As long as we have quality people who have the tools necessary to work with the producers as we move into an age of technology” he says, “the agriculture industry will continue to be well served.”
Agricultural cooperatives have the ability to perform at levels comparative to large corporations all the while delivering value to their communities and their members.
Dairy cooperatives in the United States peaked in the 1940’s with nearly 2,300 in 42 states. Because dairy farms were relatively small and remotely located, cooperatives – formed by groups of farmers seeking solutions to common problems – began to emerge. In 1919 a group Vermont farmers came together to figure out what to do with their excess milk. Roberta MacDonald, Senior Vice-President of Cabot Creamery says their co-operative has come a long way since its formation over 90 years ago. Having merged with several cooperatives, MacDonald says they are the largest cooperative in the Northeast. She says they represent over 1,200 farm families throughout that region.
MacDonald says the core of their business is to keep farmers farming and help sustain their future. “I know for a fact we would not have half of the farmers we do farming,” she says, “especially in the more urban states without the cooperative business structure.”
She tells Brownfield Cabot was born out of necessity in 1919 and the cooperative business model has helped them continue today. She says the business model continues to be solid and says “people are embracing the cooperative model and the cooperative principles even if they don’t understand what it means.” MacDonald says people, however, do understand it means 100 percent of the profit is returned to the members.
For many years, power companies ignored the rural areas of the nation. In fact, until the mid-1930’s nine out of every ten rural homes were without electricity. Martin Lowery, Executive Vice-President of External Affairs with the NRECA says in the early 1900’s then President Teddy Roosevelt suggested using the co-operative business model to bring electricity to rural America. It wasn’t until 1935 when his cousin, President Franklin Roosevelt, created the Rural Electification Administration. Their goal, Lowery tells Brownfield, was to figure out how to get electricity to rural communities and like the formation of many co-operatives, it came out of necessity. “You simply just didn’t have electricity in the vast majority in rural areas of the United States,” he says. Lowery adds investor owned companies were not willing to extend the service because they couldn’t make a profit.
When the administration couldn’t figure out how to make it work in rural areas, Lowery says their solution was to have farmers and ranchers and the rural communities around them take care of their own needs. “By creating a co-op and having access to low-interest loans from the federal government to get started,” he says they were able to provide Rural America with electricty. Lowery notes, “It began as a public/private partnership that today is seen as one of the most successful projects the US has ever under taken.”
Today, rural electric cooperatives provide power to 42 million people across 47 states and now own around 50 percent of the nation’s electric distribution system.
Farmer owned cooperatives are essential for America’s farmers and ranchers to provide food, fuel and fiber to the world’s growing population. Chuck Conner, President and CEO of the National Council of Farmer Cooperatives says a traditional farm co-operative benefits the average American farmer. “On average,” he says, “a farmer that belongs to a supply co-op and is able to take advantage of those volume sales and the ability of volume purchase has on average $5,500 higher income than a similary farmer who does not belong to the co-op.”
Many co-ops were formed out of necessity. Conner says farmer co-operatives are no different and that’s part of the reason why the business model is successful. Another reason, he says is because the entire ownership structure “has skin in the game”.
NCFC is an organization made up of approximately 60 farmer owned cooperatives and some state co-operative councils. They represent those co-ops on issues from farm policy to taxation. Conner says most importantly though, is their ensuring the co-operative has the right to exist through what is known as the Capper-Volstead Act. He says the Capper-Volstead Act provides very limited anti-trust immunity from the anti-trust laws in the United States that enable co-ops to exist. Conner notes they also enable farmers to come together collectively to do things that otherwise might be called into question under some of the anti-trust rules.
Conner says he feels the importance of farmer owned cooperatives is growing.
In December of 2009 the United Nations General Assembly declared 2012 The International Year of Co-operatives (IYC). Why co-operatives? According to www.2012.coop (a website dedicated to the IYC) the UN resolution recognizes the diversity of the co-op movement with hopes that governments will take up measures aimed at creating a supportive environment for the continued development of co-operatives.