What Can Cooperatives Bring To A Shifting Iowa Population?

What Can Cooperatives Bring To A Shifting Iowa Population?

Iowans continue to leave rural parts of the state and move to larger cities. Rural people have a working knowledge of how co-ops work, and are moving to communities where common problems may be addressed by the cooperative business structure.

Iowa residents are leaving rural areas and moving to larger cities. Four of the state's five biggest cities grew from 2000 to 2010, but only a third of the 99 counties did so, according to 2010 Census data just released. The rural population takes with it a working knowledge of rural cooperatives and is relocating, potentially, in communities where common problems may well be addressed by the cooperative business structure.

Greg McKee, director of the Quentin Burdick Center for Cooperatives at North Dakota State University, says there are a set of principles that define cooperatives and differentiate them from other types of businesses. "Cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership," he says.

McKee believes economically challenging times foster the growth and interest in cooperatives, in part because start-up capital comes from member-investors and because of the civil engagement that is intrinsic to cooperatives.

More people would be interested if they understood co-ops better

Madeline Schultz, a specialist who works with communities for Iowa State University Extension, believes more people would be interested in cooperatives if they understood them better. She gives co-leadership to the team of university experts generating a collection of online educational materials on cooperative creation and management. "We believe youth and adults can increase their understanding of the cooperative business model; become more engaged as cooperative business members, employees, board directors and managers; and achieve greater economic and social improvements in their communities from the information available at www.eXtension.org."

Interest in cooperatives is finding fresh support in cities through models like the Producers & Buyers Co-op in Eau Claire, Wisconsin and the resources available from land-grant universities through www.eXtension.org.

Cooperative guiding principles support community well-being

Stephen Ronstrom, Sacred Heart Hospital CEO, wanted the healthiest foods available served at the Eau Claire, Wisconsin hospital. So, in 2008 he gave his hospitality service director the directive to begin buying local food for the institution's kitchen. The directive stemmed from Ronstrom's belief that healthy, fresh nutritional foods are part of the healing cycle of the patient. He was tired of sending the hospital's money around the country and beyond to truck in food that could be grown and raised better by people in the hospital's own community.

Ronstrom was concerned about the quality and nutritional content of foods served at the hospital, especially those picked before they were naturally ripened. He recognized the carbon footprint of globetrotting food and the likelihood that he was buying foods treated with preservatives to extend shelf life. He wanted healthier food for the people eating at Sacred Heart and recognized the locally grown beef, pork, poultry and produce as part of his patients' recovery and a contributing factor to the well-being of employees and guests.

Rick Beckler, Sacred Heart Hospitality Services Director, admits it took a bit of fumbling around to figure out how to work with local producers to get the quantities of product needed by the hospital on an ongoing basis. "I knew I couldn't just show up at the farmers market and buy 1,500 pounds of ground beef," Beckler says. The other thing he knew was ten percent of the hospital's food budget was committed to purchasing local food products and he used that to publicly challenge growers and producers to address this compelling community need and opportunity. As a result of that public challenge a new business, the Producers & Buyers Co-op, rose to meet the need.

Forming a co-op, owned and controlled by people who use it

In communities across the country, people are working together through the cooperative business model, to get the things they need to live better and save money.  Co-ops are owned and controlled by the people that use them. From telecommunication, electric and farmer cooperatives in rural areas to housing, organic food and childcare cooperatives in metropolitan areas – cooperatives bring people together to improve their quality of life and financial well-being.

Greg McKee of North Dakota State University explains the set of principles that define co-ops and differentiate them from other types of businesses. "Co-ops are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership," he notes. "Members set policies and democratically make decisions; they control these autonomous businesses and contribute equitably to the capital of their cooperative."

Since June 2008 when Ronstrom first pledged 10% of Sacred Heart Hospital's $2 million food budget to purchasing local foods, the Producers & Buyers Co-op has become a business that produces, processes and delivers nutritious local produce for institutional use. "There was no business example that fit what we wanted to accomplish and there were preconceived barriers that needed to be broken down," says Beckler. "The cooperative business model has made it possible for us to achieve what we set out to do."

Membership includes producers, buyers, processors, transportation

With assistance from Pam Herdrich of the River Country Resource and Development and Margaret Bau, Wisconsin-USDA Rural Development cooperative development specialist, the Producers & Buyers Co-op was formed using a multi-stakeholder approach with a membership that includes the producers, buyers, processors and local transportation. "This co-op is interesting from so many different perspectives," says Bau. "For example, buyer-members aren't mere customers. Buyer members serve on the board, work on committees concerning product standards, work through fair pricing and sweat through details of initial product runs."

Through co-op membership, the Producers & Buyers Co-op buyers are part of the learning process about the seasonality of food, the constraints of not having enough processing facilities, crop failures, etc. "If a hospital likes the idea of obtaining locally grown food but isn't willing to put in this extra effort or pay more for high quality food, then local food isn't for them," said Bau. "Cooperatives are all about being in an ongoing relationship with the other co-op members. It is a relationship of equals."

Education and training for co-op members, elected representatives, managers and employees so they can contribute effectively to development of their co-op is another principle of the cooperative business model. This involves understanding both how co-ops and how the particular business functions successfully. "The first product the hospital received was ground beef in 40 pound frozen blocks," says Beckler. "It was a wonderful product, but we needed to address the packaging. As co-op members, we are learning together what the producers can raise and grow; what options the processors have; and what the buyer can use."

The community benefits from cooperatives in various ways

As of September 2010, the Producers & Buyers Co-op had facilitated the purchase and transportation of over $177,000 of locally grown product from more than 18 producers and four processors to three buyer members.

Michelle Miller, associate director for the Center for Integrated Agricultural Systems at University of Wisconsin, says cooperatives also have an altruistic side that's appealing. "Cooperatives are self-affirming – you see a need and you address that need through a business," she says. "Cooperatives are also an entrepreneurial way to bring values back into business." Miller's comments reflect another of the guiding principles of cooperatives - while focusing on member needs, cooperatives work for the sustainable development of their communities.

Miller learned about cooperatives through her family's participation in Farmers Union. Her grandfather was a board member for several co-ops in North Dakota and her mother directed the Wisconsin Farmers Union co-op summer camp where campers create and run a cooperative. "It is important for the continuation of cooperatives that children understand how co-ops operate and are empowered to contribute to their communities."

Knowing what market price will be is beneficial for co-op members

Folks around Eau Claire recognize the value of the Producers & Buyers Co-op. Member Darrell Lorch of Lorcrest Farms, Inc., in Blair, Wisconsin, says having a stable market price allows him to do more long range planning with his farm operation. Sacred Heart's Beckler reports an outpouring of warm compliments on the hospital's food from patients, Meals on Wheels patrons and employees. "We have learned a great deal about our community through the co-op," says Beckler. "The civic engagement has been good on many levels. We are eating healthier and supporting a healthier local economy."

Producers and processors that sign up for the Producers & Buyers Co-op promise to employ growing practices and animal husbandry that's good for the land, good for the animals and good for the people who eat the food. The buyers, in turn agree to pay a price that reflects the cost of producing food that lives up to those standards plus a reasonable profit. Buyers also agree to be flexible if certain products or quantities aren't available when they want them, filling the gaps through other suppliers.

Education materials about cooperatives available online

River Country RC & D and Wisconsin Rural Development personnel assisted Beckler and the Eau Claire producers as they organized the cooperative in 2008-2009. They and others interested in learning more about or starting a cooperative now have additional resources available. Miller, McGee and other professionals from state Cooperative Extension services, industry and USDA are collaborating to provide a Web based source of educational information about cooperatives.

An educational partnership of 74 land grant universities known as eXtension provides research based information and learning on one website: www.eXtension.org.

Information at www.eXtension.org is organized by communities of practice (CoP), or resource areas, populated by a virtual network of faculty, professional and para-professional educators, industry experts and federal government representatives with expertise in the subject matter. The cooperative CoP recently launched with six content areas: 1) basic cooperative principles, 2) cooperative development, 3) youth and cooperatives, 4) management and marketing, 5) cooperative finance and 6) board of director strategy.

"The leadership team developing the cooperatives community of practice hopes their work will became an essential source of high-quality information and education," says Madeline Schultz of Iowa State University, cooperative community of practice co-leader. "We believe youth and adults can increase their understanding of the cooperative business model; become more engaged as cooperative business members, employees, board directors and managers; and achieve greater economic and social improvements in their communities from the information available at eXtension."

Miller and McKee believe economically challenging times foster the growth and interest in cooperatives, in part because start-up capital comes from member-investors and because of the civil engagement that is intrinsic to cooperatives. That interest is finding fresh support through models like the Producers & Buyers Co-op in Eau Claire, Wisconsin and the resources available at eXtension.

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