Recognizing the Power of Collaboration in Cooperatives


orange citrus fruits with juiceIf you’ve ever sipped Florida’s Natural orange juice, buttered a dinner roll with Land O’Lakes, or spread Welch’s grape jelly on a peanut-butter sandwich then you’ve done business with a farm co-op.

Those are just three of the most recognized co-ops in the United States—not necessarily the biggest, but among the best known. They’re also great illustrations of how cooperative associations here and around the world help farmers grow the food that everyone needs, especially as we approach the International Day of Cooperatives on Saturday, July 1.

Most agricultural co-ops aren’t as familiar as these brand-name behemoths. Instead, they’re often invisible to consumers, even as they keep grocery prices in check by letting farmers like me stay economically sustainable. Here in rural Iowa, I work with a co-op that helps me buy crop inputs and bring to market what I grow.

The idea of a co-op is simple: It’s a business organized and run by the people who use its goods and services. By banding together, member-owners achieve strength in numbers. When I need to purchase fertilizer for my corn and soybean fields in Iowa, for example, I’ll get a much better price if I join with my neighbors and negotiate a bulk rate with a supplier versus trying to do it as a single farmer on my own.

When we enjoy profits, we either put them back into the co-op or distribute them to member-owners in a payment known as a “patronage dividend.”

Co-ops can exist in any industry, and they are a major presence in the financial and energy sectors, in the form of credit unions and power cooperatives. Ace Hardware is a co-op of retailers. At least 12 percent of the global population—around 1 billion people—are members of co-ops, claims the International Cooperative Alliance.

Co-ops are especially important for farmers, in part because we work in bulk. They make a huge amount of sense for the high volumes and low margins of agriculture. They play an especially vital role in the United States. About half of the hundred largest American co-ops are involved in agriculture. A century ago, Congress passed the Capper-Volstead Act, which gave farmers special abilities to collaborate.

As with so much in agriculture, then and now, the original farm co-ops were driven by innovation. Back in the 1920s, farmers were starting to replace an old technology with a new one, as tractors succeeded horses and plows.

brown rolled hays in roomHorses eat hay, but tractors burn fuel—and that’s more expensive. Farmers knew that if they worked together, they could strike better deals for gas. So that’s what they did. Today, lots of farmers buy gas used on the farm not from pumps at the local station, but through their co-ops.

One of the best features of co-ops is that they support competition. They keep private companies honest. Farmers and consumers both come out ahead. When I save money on my farm, I can pass along a portion. Consumers won’t ever see these savings on a receipt, but they have more money in their pockets because farmers work with co-ops.

The concept of co-ops has been around for as long as farmers and others have tried to organize themselves for economic gain, but they began to take their modern shape during the industrial revolution, when an English organization developed the Rochdale Principles, which are a set of best practices for co-ops.

These have evolved into a series of ideals that guide the strongest co-ops today: Co-ops should have voluntary and open membership, maintain democratic member control, include the economic participation of members, preserve their autonomy and independence, make a point of cooperating with other co-ops, and seek to develop their own communities.

Those are six principles. There’s also a seventh, involving education: Co-ops must train their members in the business of the co-op. In addition, they have a broader educational goal, which the International Cooperative Alliance describes this way: “They inform the general public—particularly young people and opinion leaders—about the nature and benefits of co-operation.”

So that’s what I’m trying to do here—and show that when farmers work together, everyone does better.

Tim Burrack

Tim Burrack

Tim grows corn, seed corn, soybeans and produces pork. Has been very involved with Mississippi River lock improvements and has traveled to Brazil to research their river, rail and road infrastructure changes. Tim volunteers as a board member for the Global Farmer Network and is currently serving as Vice Chairman.

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