New & Next: Helping Farmers Work Together to Develop Stronger, Smarter Business Models

Imagine farmers and ranchers located hundreds of miles from their greatest market opportunities, without the resources to tap those markets. Then imagine those farmers and ranchers deciding to work together to access those faraway markets. And then imagine the business they formed to market and distribute their products together growing by double-digit percentages each year since its formation, with new opportunities abounding.

This was the reality for producers in western Kansas and eastern Colorado several years ago, as they looked hundreds of miles away to the growing local market opportunities along Colorado’s Front Range. They had individually tried to sell their products in various marketplaces, only to find that the costs of marketing and distribution were prohibitive given the distances involved. But thanks in part to the expertise and work of Rocky Mountain Farmers Union’s Cooperative Development Center, these producers were able to become member-owners of their own cooperative – the High Plains Food Co-op – which has seen dramatic growth in revenues and membership (including both producer and consumer members) since beginning operations in 2008.
   
 Imagine a region where . . .

• communities control their resources
• democracy is encouraged and practiced daily
• people work together to own and manage their businesses, which are more stable as a result
• wealth disparities are minimized and wages are higher

      Then imagine an organization dedicated to helping transform the economy by making meeting the needs of members and their communities as important as profits.

    RMFU’s Cooperative Development Center is a dynamic and innovative program of the Rocky Mountain Farmers Union Educational & Charitable Foundation, the 501(c)(3) arm of RMFU, created to grow cooperative and related businesses, and provide education about, among other things, the cooperative business model across rural areas of Colorado, New Mexico, and Wyoming, and recently in Metro Denver and other urban areas. What a future the Center imagines – a region where everyone can meaningfully participate in a just, democratic, and sustainable economy through cooperative enterprise!    Our country faces many significant challenges. We suffer from growing economic disparity and relatively stagnant wages. Nearly 15 % of Americans live in poverty (one in six children) and large numbers live in food deserts. For each of these issues, cooperatives can provide a powerful, practical, and viable solution.  

    A cooperative, or co-op, is a business that is owned and democratically controlled by its members. A co-op is founded by its members to meet a need – thus a fundamental principle of every co-op is that its members actually use and participate in the business: outside investors, if any, will not have majority control. It’s a powerful way enable people to collectively own and manage a business that is profitable and meets their needs. 

Historically, cooperatives have provided sound economic and social solutions for people for whom more conventional (at least in the U.S.) economic approaches may not have worked to their benefit. For example, in 1934, only 11% of U.S. farms had electricity. The nearest investor-owned utilities deemed the capital expenditures to electrify rural America too great to justify to their shareholders. In 1935, the Rural Electrification Administration was established to offer loans and other assistance to organizations seeking to bring electricity to rural America. The result has been a vast and resilient network of rural electric cooperatives that brought electricity to almost all of rural America in less than 20 years.

    Today, there are tens of thousands of cooperatives of all sizes and configurations in the U.S., including everything from agricultural and other producer co-ops, to credit unions and rural electric associations, to cooperatives of small businesses, to consumer and worker co-ops. As a proven business model, some U.S. cooperatives are well into their second century of operations. In addition to empowering people through member ownership and democratic control, cooperatives contribute to a more stable economy by helping to spread the wealth to all engaged in the business, and often by returning investments and profits back into the community. They tend to be more resilient than traditional businesses and to better weather economic downturns.

    RMFU’s embrace of the cooperative model goes back to its founding in 1902. Nationwide, Farmers Unions are progressive, grassroots, member-driven organizations dedicated to advocating for family farmers and ranchers and their communities. Cooperatives fit that philosophy by empowering smaller agricultural producers to come together to secure greater market presence and share.

Since the RMFU Center was started in 1996, the more than 100 cooperatives and other entities the Center has assisted have raised more than $84 million in capital and created or saved approximately 770 jobs. We average about 25-30 educational and informational presentations about the cooperative business model and related topics each year.

The Co-op Development Center recently established an urban program to focus primarily on the development of worker cooperatives in lower-income communities of Metro Denver, thanks largely to funding support from local foundations.
Our efforts have made a lasting difference in the lives of people, in the economic opportunities within communities, and in encouraging a culture of engaging in cooperative solutions.