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Rura

lCOOPERATIVESCOOPERATIVESJuly / August 2014

WhatWe’ve

LearnedSo Far

4

2 July/August 2014 / Rural Cooperatives

By Elanor Starmer

Editor’s note: Starmer is senior advisor to Agriculture SecretaryTom Vilsack on local and regional food systems.

Agriculture Secretary Tom Vilsack in Mayannounced a historic level of fundingavailable for local and regional food: $78million. This funding includes $48 millionavailable through USDA’s Business and

Industry Loan Guarantee Program and $30 million availablethrough the newly expanded Farmers Market and Local FoodPromotion Program.

The 2014 Farm Bill gave USDA these and other tools andresources, expanding our ability toconnect rural and urbancommunities, increase access tohealthy foods and to support ruraleconomies through local foodsystems. Farmer cooperatives areeligible for these programs, andmany co-ops have received fundsunder them.

Since 2009, the Farmers MarketPromotion Program (FMPP) —now expanded into the FarmersMarket and Local Food PromotionProgram — has funded more than450 projects. Penn’s Corner FarmAlliance is an example of a co-opthat is using the FMPP program.

A farmer-owned cooperative of30 farms in southwesternPennsylvania, Penn’s Corner FarmAlliance used the funds to makeinfrastructure upgrades to itscooperative market, including new refrigerated storage andtrucks. The Alliance, which serves three dozen restaurantsand more than 700 community supported agriculture (CSA)members in Pittsburgh, has seen its business grow 12-fold inthe past five years. The co-op’s farmers use sustainablefarming practices, and many of them grow organically, producinga wide variety of fruits, vegetables, dairy foods and meats.

While Pittsburgh consumers benefit from the project,rural farmers and ranchers in the surrounding area are equalpartners. Fostering this type of rural-urban connection and

mutual opportunity through local food systems is acornerstone of USDA’s work.

With expanded authority and funding through the 2014Farm Bill, the Farmers Market and Local Foods PromotionProgram has the potential to help establish morecooperatives and other businesses across the country that arehelping to meet the demand for local foods. The goals ofFMPP grants are to increase domestic consumption of, andaccess to, locally and regionally produced agriculturalproducts.

The maximum amount awarded for any one proposalcannot exceed $100,000; the minimum award is $15,000. Theprogram supports new market opportunities for farm andranch operations serving local markets. Farmers markets,

roadside stands, community-supported agriculture programs,agri-tourism activities and otherdirect producer-to-consumer marketopportunities can benefit from theprogram.

Information about how to applyis available at: www.ams.usda.gov. USDA’s Business and IndustryGuaranteed Loan (B&I) Programcan be used to support a wide rangeof rural businesses. The Cellars atJasper Hill in rural Greensboro, Vt.,was able to expand its dairy facility,grow its business and reach newmarkets using the B&I program.

The owners, the Kehler brothers,took their passion for dairy andfounded a cheese-making operation10 years ago. Partnering withVermont’s Community NationalBank, USDA’s B&I program helped

the company construct a 22,000-square-foot facility andexpand its on-farm value-added cheese production. Theproject helped save 20 existing jobs and created 14 new onesin a town with fewer than 1,000 residents.

The B&I program is available on a rolling basisthroughout the year and can finance local food enterprises inboth rural and urban communities. To learn more, contactyour local USDA Rural Development office, which you canreach, toll-free, by calling: 1-800-670-6553, or visit:www.usda.rurdev.gov. ■

Commentary Local food investments expand market opportunities

Blackberry Meadows Farm was first certified organicin 1992 and has since provided the Pittsburgh areawith high-quality, local fruits and vegetables, meatsand eggs. The farm joined the Penn’s Corner co-op in2013.

Features

Rural Cooperatives / July/August 2014 3

Volume 81, Number 4July/August 2014

Rural Cooperatives (1088-8845) ispublished bimonthly by USDA RuralDevelopment, 1400 Independence Ave.SW, Stop 0705, Washington, DC. 20250-0705.

The Secretary of Agriculture hasdetermined that publication of thisperiodical is necessary in the transactionof public business required by law of theDepartment. Periodicals postage paid atWashington, DC. and additional mailingoffices. Copies may be obtained from theSuperintendent of Documents,Government Printing Office, Washington,DC, 20402, at $23 per year. Postmaster:send address change to: RuralCooperatives, USDA/RBS, Stop 3255,Wash., DC 20250-3255.

Mention in Rural Cooperatives ofcompany and brand names does notsignify endorsement over othercompanies’ products and services.

Unless otherwise stated, articles in thispublication are not copyrighted and maybe reprinted freely. Any opinions express-ed are those of the writers, and do notnecessarily reflect those of USDA or itsemployees.

The U.S. Department of Agriculture(USDA) prohibits discrimination in all itsprograms and activities on the basis ofrace, color, national origin, age, disabili-ty, and where applicable, sex, maritalstatus, familial status, parental status,religion, sexual orientation, geneticinformation, political beliefs, reprisal, orbecause all or part of an individual’sincome is derived from any publicassistance program. (Not all prohibitedbases apply to all programs.) Personswith disabilities who require alternativemeans for communication of programinformation (Braille, large print, audiotape,etc.) should contact USDA’s TARGETCenter at (202) 720-2600 (voice and TDD).To file a complaint of discrimination, writeto USDA, Director, Office of Civil Rights,1400 Independence Avenue, S.W.,Washington, D.C. 20250-9410, or call (800)795-3272 (voice), or (202) 720-6382 (TDD).USDA is an equal opportunity providerand employer.

Tom Vilsack, Secretary of Agriculture

Doug O’Brien, Acting Under Secretary,USDA Rural Development

Dan Campbell, Editor

Stephen A. Thompson, Assitant Editor

Stephen Hall / KOTA, Design

Have a cooperative-related question?Call (202) 720-6483, or email:[email protected] This publication was printed with vegetable oil-based ink.

04 A Two-Way Street Members must fulfill responsibilities to their co-opBy James Wadsworth

8 Co-ops: leadership with a difference Consensus is the goal, but can be a long processBy Bruce J. Reynolds

10 The Privileges of MembershipCo-ops pursue wide range of ways to communicate the ‘co-op difference’By Dan Campbell

14 What We’ve Learned So FarFood hub operators share insights needed for business success By James Matson, Jeremiah Thayer and Jessica Shaw

22 Sheets, Hamon, Geans named top co-op communicators

26 The Missing PieceWhy women farmers are key to global food security By Hannah Guedenet, Paul Guenette and Lydia Mbevi-Nderitu

30 Our first year as a co-opWorker-owned food processor shares lessons learned since converting to a co-op By Kristin Howard

Departments02 COMMENTARY

20 CO-OP DEVELOPMENT ACTION

33 NEWSLINE

p. 20

ON THE COVER: Food hub operators share their thoughtsabout key issues, ranging from food safety to computer software,that impact their business operations. See page 14. Here, Amy’sOrganic Garden owner Amy Hicks harvests greens at her farm inCharles City, Va. Her farm participates with Fall Line Farms, alocal food cooperative in Richmond, Va. USDA photo by LanceCheung

p. 33p. 26


A Two-Way StreetMembers must fulfill

responsibilitiesto their co-op

By James Wadsworth, Ag EconomistCooperative Programs, USDA Rural Development

e-mail: [email protected]


While a co-op must deliver qualitygoods and services at acompetitive price to its members,the members also have important

responsibilities toward their co-op to fulfill. Fora co-op to prosper, the members must knowand take these responsibilities seriously andperiodically review them.

Member responsibilities begin at theconception of the co-op and remain in placethroughout its existence. Members who areactive in their co-op are essential to ensuringthat sound governance, good managementand efficient operations are maintained.

Co-op members must:

◆ Understand the purpose of the cooperativeand why it was organized as a co-op;

◆ Know the legal foundations of the co-op; ◆ Take part in the co-op’s governance (e.g.,

vote in elections, be willing to serve oncommittees and the board of directors,select and evaluate directors);

◆ Provide necessary capital for its operation;◆ Alert leaders to important issues (members

are the eyes and ears of the co-op); ◆ Use the cooperative (market through it, buy

supplies and services from it, etc.); ◆ Promote the cooperative to other potential

members.

Understand the cooperativeMembers must fully understand what

their co-op is: its purpose, mission,goals, operations, benefits, finances,limitations, governance structure,policies and what the organization maylook like in the future (based onstrategic plans). They should read thearticles of incorporation and bylaws tounderstand how the co-op is set up tofunction and its legal foundation.

Members need to understand theirco-op’s operations and policies and how

they function within the framework ofstate statutes and federal laws. Some ofthese functions might includeestablished member obligations,regulations, quality controls, equitymanagement and financial structure andrules.

Members need to understand the co-op’s history as well as its mission, goalsand strategies for the future. It is up toco-op leadership to provide clarityregarding the co-op’s current status andhow the board intends to position it forthe future. Members who understand

their co-op’s strategic mission can makewide use of it for their immediatebenefit as well as offer constructivecriticism or suggestions for its future.

Members should stay informed aboutissues that may affect the co-op bycarefully reading all correspondencefrom the board and management.

Know legal foundationsThe co-op’s legal framework, as

established in the articles ofincorporation and bylaws, providemembers with the power to control the

“The co-op’s legal framework, as established in the articles of incorporationand bylaws, provides members with the power to control the co-op.”

co-op. The board of directors and hiredmanagement must abide by theprovisions in these documents.Members also need to analyze proposedbylaw amendments and determine howthey will affect the co-op before votingto approve them. Members areresponsible for knowing the contents oflegally enforceable marketing contractsor other legal papers the co-op may usebefore signing them.

Take part in governanceCo-ops are deeply rooted in the

principles of democracy, and thus takingan active part in co-op governance is avital responsibility for all members.This means casting votes duringdelegate and director elections, onmajor co-op business decisions (forexample, expansion, contraction ormerger), and other matters brought to

the membership. At annual and othermembership meetings, members shouldnot hesitate to ask thoughtful questions.

Although members delegategovernance authority to the board ofdirectors, they need to hold the boardaccountable for its actions. Thisincludes obeying bylaws as well as local,state, and federal laws. In addition toparticipating in voting and meetingactivities, members should considertaking a role in the co-op’s governancebody (i.e., director, delegate, committeeperson).

Select and evaluate directorsMembers also take part in the

democratic process in their co-op bynominating, voting for and evaluatingdirectors. In considering attributes of apotential director, members should lookfor people who: are goodconversationalists and can clearlyexpress their views; are good listeners;understand what it takes to run asuccessful business; are able to analyzecomplex business issues; are able to findconsensus and can compromise; and canmake difficult decisions based on what

is best for the co-op as a whole. Individuals who have been active in

other outside organizations orassociations may be a good fit, as thoseexperiences are often congruent withbeing a co-op director.

Provide necessary capital Having a financial stake in the co-op

is a key part of ownership. It’s aresponsibility that members must takeseriously and understand. Co-ops arestarted with some type of initialmember investment — often for a share


Reach out wi th e f fec t ive member re la t ionsWhile members have responsibilities to fulfill in their co-op, the co-oplikewise has important responsibilities to members, includingmaintaining excellent member relations.

Effective member relations for a cooperative means that it mustreach out to members with news and messages about their co-op.Providing members with information about important co-op services andoperations, as well as with continuing cooperative educationalinformation, helps to create a more loyal membership.

To reach out to members, co-ops need to: • Talk to members directly – in the co-op store when they buy supplies,

at a co-op plant or elevator when they deliver crops, on their farmswhen co-op field representatives visit, at co-op meetings, etc.;

• Reach out with co-op newsletters, magazines, websites and socialmedia;

• Provide updates and other information by placing notes with billing orpayment statements;

• Send letters to members about important co-op issues;• Advertise in newspapers, magazines/trade journals, and on radio or

TV;• Hold special member events and member meetings.

Members need to be regularly informed about their cooperativebusiness: what it is, what it does, how it benefits them and what theirresponsibilities to the co-op are. They also need to be kept abreast ofthe co-op’s initiatives, operations and promotions. Membercommunications – when carried out on a regular basis –enhances andkeeps alive the co-op’s unique culture and strengthens the relationshipbetween members and their co-op. ■

of voting stock along with a directequity capital contribution. Once upand running, members’ financialcommitment in their co-op must belarge enough to show continuingconcern about how their investedmoney is managed. This also providesmotivation for them to accept all oftheir membership responsibilities.

A desirable goal is for memberequity contributions to equal a majorityof the co-op’s total capital requirement.A high level of member equity capitalprovides for greater member controland commitment. It also makes it easierfor the co-op to access debt capital.

Members finance their co-ops inthree primary ways: direct investment,retained margins and per-unit retains

(see USDA Cooperative InformationReport 55, Co-ops 101, for moreinformation on these methods).

Alert leaders to issues Because the role of the co-op is to

improve members’ quality of life,members should be ready to alert co-opleaders to both opportunities andproblems that they see facing the co-op.This helps leadership stay attuned tomember concerns so the board andmanagement are able to devote theirefforts to matters important tomembers. Issues to bring to leadershipmight arise from member-to-memberconversations, during co-op meetings,during community meetings or justfrom members learning of a situation ormarket opportunity from media or intheir other community activities.

Issues that are of a serious natureshould be brought to leadership as soonas possible. Members should refrainfrom bringing up petty issues unlessthey seem to be growing intosomething more serious.

Use the cooperativeUsing the co-op is the easiest

responsibility for members to fulfill. Byusing the co-op as much as they can,members help the co-op directlysucceed in three important ways:

(1) A certain amount of business isneeded just to cover the cost of openingthe doors each day, includingmaintaining buildings and equipment,utilities and salaries. Greater volumereduces these costs per unit of sales or

revenue. It also means facilities canoperate closer to capacity, equipmentand employees can be more productiveand the co-op is able to generate moreincome above costs and returnpatronage refunds to members at theend of the co-op’s business year.

(2) Using the co-op provides thefinancing to keep it operating andgrowing. Member financing is providedon the basis of member use of thecooperative.

(3) Using the co-op is how membersgain the services and benefits theysought when they first formed or joinedthe co-op.

Members need to make a consciousdecision to patronize their co-op evenwhen short-term prices or services maysometimes seem better elsewhere. Highmember use helps the co-op and, in

turn, the members as well. Thestronger the co-op, the morecompetitive it will be in themarketplace. A prosperous co-op withthe solid support of its members isoften recognized as a business leader inits community or industry.

Promote the cooperativeMembers need to understand that

their co-op (that is, their business) willhave a greater likelihood of success ifthey are proud of it and if they promoteit to other potential members. If the co-op has its own brand, members shouldbe proud to tell the story behind it,discuss it and promote it. Promotingtheir co-op’s business services, memberbenefits, unique structure and its brands

will all increase the co-op’s potential forsuccess.

Co-ops are formed and operate toserve and benefit members. Members’responsibilities are as important to theco-op as the co-op is to members.Taking these responsibilities seriouslyand exercising them to the best of theirability will give members a strong andeffective cooperative that is able toeffectively provide the services andbenefits they need in the present andfuture.

References: USDA CooperativeInformation Report (CIR) 1, Section 7,Cooperative Member Responsibilities andControl; USDA CIR 11, Cooperatives:What They Are and the Roles of Member,Directors, Managers, and Employees;USDA CIR 55 Co-ops 101. ■


“Co-ops are deeply rooted in the principles of democracy, and thus taking anactive part in co-op governance is a vital responsibility for all members.”


By Bruce J. Reynolds, EconomistCooperative ProgramsUSDA Rural Development

Leadership is essential for guidingorganizations to fulfill the mission of theirstakeholders. The necessity of strongleadership especially comes to the forefrontduring times of major industry change or

stakeholder conflict. When leaders successfully guide theirorganizations through turmoil, the imprint of leadership isunmistakable. Even during times of “business-as-usual,”business leaders must prepare their organizations to avoidcrises and to keep up, or move ahead, of their competitors.

The stakeholders of a business are usually defined as the

investor-owners, employees and customers. Cooperativestakeholders are members who have an ownership stake inthe business, but who are also stakeholders as customers orproducers, with the latter being either as suppliers ofproducts or of labor services. Many cooperatives do asubstantial amount of business with non-memberstakeholders.

Democratic governance of a co-op business by member-stakeholders presents a unique challenge for its leaders. Theleaders of cooperatives try to make decisions with a consensus

of the membership, which differs from decision-making inhierarchically controlled businesses. Still, member consensusdoes not mean putting all decisions to a referendum.

This point was emphasized by Jim Kiley, former managerof the Sioux Valley Southwestern Electric Cooperative, whenhe accepted a leadership award from the National RuralElectric Cooperative Association in 1998. “One thing Ilearned from the many fine people I’ve been privileged toknow in this business is that leadership doesn’t come fromentitlement or consensus — it comes from taking advantageof opportunities,” Kiley said. “It comes from the applicationof sound principles in pursuit of long-term goals.”

His comment seemed to me, at the time, to be dismissiveof consensus. But in retrospect, I appreciate his message thatindividual responsibility to lead must not be crowded out by

the opinions of the membership. Members have a voice intheir cooperative, but their views are not the last word onmany decisions.

For example, member consensus might be to carry a lineof unprofitable branded products at farm supply stores or atfood co-ops that take-up shelf-space and gradually erodeearnings.

Kiley’s belief that consensus does not control leadershipcan be contrasted with leadership in hierarchically managedbusinesses, where there is scant need for such concerns.

Consensus is the goal, but can be a long process

Leadership with a difference

“Leadership doesn’t come from entitlement or consensus — it comes from taking advantage of opportunities.”


The challenge of leadership of a cooperative is not tosimply follow a consensus, but to listen to members and tocarefully weigh their needs when determining the bestdirection for the business to prosper. This requires specialskills and experience.

This differing approach to leadership has been recognizedin training programs for co-op leaders, including by theGraduate Institute of Cooperative Leadership (GICL),established at the University of Missouri in 1972(http://www.gicl.coop/giclorigins.html). Many other trainingprograms have likewise been established to fill a void instandard leadership training curriculums that do not addressthe importance of working with a cooperative membership.

Tasks differ for co-opmanagers and directors

Managers and directors in co-ops each have leadershiproles that do not overlap. Managers are leaders ofcooperatives, not just in overseeing operations, but inunderstanding industry changes and in advising the directorson strategic positioning and planning.

Managers need to identify if, and when, “business-as-usual” is becoming less sustainable. This type of complexforesight is not usually developed by a manager withoutinteraction with others. Managers need to maintain astrategic dialogue with staff and directors, and sometimeswith outside consultants. If major changes for the businessare recommended, managers are responsible for articulatingand planning new directions.

A board of directors in any type of organization hasgovernance functions and fiduciary duties. In a cooperative,there is an added dimension of linkage between the directorsand the member-stakeholders (Hoyt). Directors areresponsible for communicating with members about policiesand upcoming decisions. Two-way communication is needed,with directors being available to receive feedback frommembers.

Members often hold different points of view on whethertheir cooperative should consider changes and, if so, whatthose changes should be. Directors need the skill to usemember input to improve decision-making, while preventingdiverse views from becoming a source of divisiveness.

Member responsibilitiesMembers of a cooperative have a responsibility to be

informed about policies, bylaws and operations (Wadsworth).Member knowledge of operations includes having a basicunderstanding about the industry and awareness of trendsand strategies.

Members are more than passive, “yea or nay” respondersto leadership initiatives. The meaning of consensus for acooperative is that it is a process, often starting from a pointwhere members may have divergent views but lack sufficientinformation on what the cooperative should do. As morediscussion and information is shared, management anddirectors can consider member views in developing plans forkeeping their cooperative vital and growing.

Acceptance of foreign product tradingSeveral decades ago, the marketing advantages of trading

foreign commodities were recognized by many cooperativemanagers. Yet, grain cooperatives were reluctant at that timeto establish merchandising of foreign-sourced commodities(Thurston). Such merchandising was not only considered tobe of no benefit to members, but could also be construed asbeing detrimental to them. The argument against thispractice seemed to be basic economics: why contribute todemand for a foreign competitor’s products by purchasingthem?

The major advantage derived from trading foreign

products is to supply food industry buyers during the timesprior to U.S. harvests. It is hoped that customer loyalty willdevelop by supplying their buyers year-around. Althoughgrain and cotton can be stored, prices for U.S. commoditiesare often not competitive during certain times of the year.

In the grain industry, there are additional advantages ofsourcing foreign crops, such as arbitrage opportunities whenhaving more choices of shipment origins. Another perceivedadvantage from merchandising foreign grain is improvedmarket intelligence, derived from the ability to operate asboth a buyer and seller in world markets.

Since the 1950s, cooperatives had repeatedly sought, butnot achieved, a durable grain exporting system (Reynolds).The development of a global origination system was a criticallink that CHS Inc. eventually accomplished. A major step inthis direction was taken in 2003 with the opening of asubsidiary for marketing Brazilian soybeans, primarily toChina (Dusek).

CHS has since followed a growth path of moresubsidiaries or joint ventures for sourcing grain from Europeto the Black Sea region, as well as additional South Americancountries for soybeans.

Trading foreign-sourced products was a vigorouslydebated policy change by Sunkist members. As with CHS,2003 was the turning point on this issue for the California-based citrus co-op. Sunkist went through a long debatewithin its membership, made more complicated by the issue

Managers need to identify if, and when, ‘business-as-usual’ is becoming less sustainable.

continued on page 41


By Dan Campbell, Editore-mail: [email protected]

Cooperatives that thinkof their members as“customers” — andrefer to them that wayin their

communications — are missing anopportunity to remind people of whatmakes a cooperative so fundamentallydifferent from other types of business,says Bob Cohen, manager of theCooperative Development Center atKent State University (Ohio). That

difference is, of course, that while“customers” buy goods and servicesfrom businesses owned by others, co-op“members” own, control and derivemultiple benefits from the business (seesidebar, page 11).

The purpose of a co-op is to meetmember needs, not to generate profitsfor the owner or distant shareholders.

Cohen’s comments were made whileserving as moderator for a paneldiscussion, “Communicating theCooperative Difference,” held duringthe Cooperative CommunicatorsAssociation (CCA) annual institute in

Pittsburgh in June. Some consumer andfarm supply co-ops — especially thosewith retail operations — may also donon-member business, so it may notalways be possible to avoid using“customer.” But whenever possible, co-ops should use “member” and/or“member-owner” in co-opcommunications to help underscore akey “co-op difference.”

“From families living in ruralAmerica desiring stable power suppliesor high-speed Internet, to grain andlivestock producers who enjoy localownership with international marketing

The Privileges of MembershipCo-ops pursue wide range of ways to communicate the ‘co-op difference’

U.S. Agriculture Secretary Tom Vilsack talks with Illinois FFA members in Springfield, Ill. Many ag co-ops focus much of their co-op education efforton youth groups, including FFA and 4-H. USDA photo by Lance Cheung. Facing page: Janice Johnson of GROWMARK discusses some of the waysher co-op communicates “the co-op difference” while participating on a panel talk during the Cooperative Communicators Assoc.’s annual meeting.She is flanked (from left) by Bob Cohen, Paul Wesslund and Jim Converse. USDA photo by Dan Campbell

power, cooperatives are as unique andpowerful as those who own and controlthem,” Cohen said, quoting Rod Kelsay,president of the Mid-AmericaCooperative Council.

As a primary contact point betweenmembers and their cooperative, Cohensaid employees need to have a basicunderstanding of the cooperative way ofdoing business. At the very least, everyco-op employee needs to be able toanswer these basic questions: • What is the official name of your

cooperative? • When was your cooperative

established?• What geographical area does your

cooperative cover? • How many directors are on your

board?

• Who is the president of your board?• How many members does your

cooperative serve? • How has the membership of your

cooperative changed since it wasorganized?

• When is your annual meeting?

GROWMARK: youth education is essential

Janice Johnson, marketing &communications specialist forGROWMARK’s Ontario region, citedthe following tell-tale example of thedifference between a producer-ownedco-op and a privately held or investor-owned company. When a non-co-opwants to tap into the feelings ofproducers, it may have to form a specialfocus group of farmers to get theirinput. But with a co-op, the board ofdirectors — all from local communities— is the “focus group” that provideson-going input to management toensure that co-op operations arestructured to meet the needs of thefarmer-owners of the co-op.

Patronage — year-end payments tomembers based on the business they dowith their co-op — is a major co-opdifference, Johnson stressed. In the past

five years, GROWMARK returnedabout $500 million in patronage to itsmembers in the United States andOntario, Canada, from its coreagronomy, grain marketing and energybusinesses.

GROWMARK is owned by local FSco-ops, each with their own


The Co-opAdvantage

Bob Cohen cites the following“big three” benefits of belonging toa co-op, as described by Rod Kelsayof the Mid-America CooperativeCouncil. • Member Ownership — If you are

invested in an idea or business, itis more meaningful. We canpromote the cooperativeadvantage through memberownership. Yes, they arecustomers, but when we refer toowners as customers, we miss akey opportunity to sell our uniquecooperative advantage.

• Member Control — Those whocontrol the cooperative vote fortheir representatives to the boardof directors. This democraticcontrol is different than InvestorOwned Control, where you voteyour shares of ownership. This isa significant advantage forcooperatives.

• Member Benefits — The benefitsof cooperatives are as numerous

as the need forcooperatives.Generally, we think ofpatronage first, but wemust not under-sell thebenefit of moderatingprices and stabilizingthe marketplace. Yes,our cooperatives arebusinesses, and thusneed to be runefficiently to make aprofit. However, everycooperative was

created to serve an importantneed that was not beingeffectively served in the market.Serving that need is a key benefitfor member/owners. ■


autonomous board. GROWMARK’smission is to help improve the long-term profitability of the system’s250,000 farmers and rural residents.

Co-ops can easily becomecomplacent about the need for co-opeducation, Johnson said, if they assumeemployees already grasp the advantagesof doing business in a co-op. But thereality can be quite different.GROWMARK is thus committed tokeeping employees informed aboutcooperative principles and practicesthroughout the year, withgreater emphasis duringCo-op Month (or Co-opWeek, in Canada).

The co-op also supports anumber of youth educationprograms, believing that it isvital to instill co-op conceptsin students while “they areyoung and impressionable.”Johnson is also a director of theOntario CooperativeAssociation (OCA), of whichGROWMARK is a member.Johnson explained how OCA hasbeen instrumental in introducingnew co-op curriculum into severalOntario high schools. Even for youthwho don’t choose an ag career,GROWMARK believes thatinstilling a knowledge and apprecia-tion of co-ops in them will still benefitthe future success of the co-op sector.

Each young person who wants toattend the Cooperative Young LeadersProgram — started almost 50 years agoby Ontario ag co-ops — needs to besponsored by a co-op or credit union toparticipate in the summer campexperience. The program has recentlybeen expanded, and participants arebeing asked to sign a contract in whichthey agree to promote the co-opbusiness model back at their school, attheir co-op and in their other activities,hence becoming a corps of youth co-opambassadors.

Like many co-ops across NorthAmerica, GROWMARK is a majorsupporter of 4-H and FFA programs,

including an annual essay contest itsponsors for FFA members who addressa co-op/ag related topic. Winners earncollege scholarships. GROWMARKalso has a strong internship programthat gives youth a real-world taste ofwhat it is like to work for a co-op.

GROWMARK is an example of howco-ops are built to last, withmembership often passing from onegeneration of family farmers to thenext. The Ontario agriculturecooperative system began in 1914 witha group of farmers getting together tobreak a monopoly on binder twine.They are now branded FS cooperativesthat have been with GROWMARK forthe past 20 years. The Ontario co-opsystem is celebrating its 100th

anniversary this year, whileGROWMARK in the United States is“over 85 years strong,” Johnson said.

Utility co-ops stress civic progams, local connections

Utility co-ops, in particular, oftenfeel the challenge of making theirmembers feel like true member-owners,not just customers. Although utility co-op members may not rely on a co-op tomarket their crops or to supply themwith farm supplies, every time they turnon a light, they are relying on their co-op for a necessity of modern life. Utilityco-ops are not-for-profit business withtheir only purpose being to provide thebest service at best possible cost.

Many electric co-ops and statewideutility co-op associations rely on amember magazine as their primaryvehicle for strengthening bonds withtheir members. Paul Wesslund, editorof “Kentucky Living” magazine — themembership publication of theKentucky Association of ElectricCooperatives — said the publication hasa circulation of more than 500,000 anda “pass-around” readership of morethan 1 million, making it by far themost widely read magazine in the state.

It is a challenge to produce apublication that appeals to such an“incredibly broad readership,”Wesslund noted. The traditional focusfor utility membership magazines isknown in the publishing industry as a“lifestyle” mix of articles, includingtravel, food, arts & culture and generalhuman interest features. But Wesslundsaid “Kentucky Living,” now in its 66thyear, is increasing the amount ofcontent devoted to telling membersmore about what they need to knowabout their co-op and the energy theyrely on. “Local” is also a very importantconcept to “Kentucky Living” readers,Wesslund stressed, so there is a strongemphasis on what co-ops are doing tobetter serve their communities.

Recent examples include:• Articles and editorials that discuss the

impact on utility co-ops of new

More than 1 million people read each issue ofKentucky Living magazine, which issupplementing its “lifestyle” mix of articleswith an increasing amount of space devotedto energy issues that impact electric co-opsand their members.


federal environmental regulations thatplace stricter limits on the amount ofcarbon dioxide that coal-burningpowerplants can emit.

• “On The Grid” is a regulardepartment introduced several yearsago that focuses on key energy issues.

In June 2014, the topic was renewableenergy in Germany, and how many ofits “green initiatives” have not gone ashoped.

• An editorial in which Wesslund urgesreaders to check out a new book,“Power Plays,” in which author TedCase relates the history of electric co-ops and their relations with U.S.Presidents, starting with the creationof the Rural ElectrificationAdministration under PresidentFranklin Roosevelt. The book showshow politically active utility co-opsare on behalf of their member-owners.

• Articles that focus on co-op supportfor a wide array of civic efforts,including programs that raise cancerawareness, that help students attendsummer camps and promote

participation in youth orchestras. “We try to link the magazine to the

readers’ local electric co-op and topromote the goal of being goodenvironmental stewards,” Wesslundsaid. Following on Cohen’s remarks, hesaid “Kentucky Living” refers to

member utilities of the statewideassociation as “co-ops,” never as“corporations.”

For any utility co-ops not convincedof the need to engage in co-opeducation, Wesslund said to keep this inmind: as a co-op, the members hold thepower to vote to sell out to an investor-owned utility if unhappy with their co-op.

Working to rebuild a local food system

Jim Converse, regional developmentspecialist at Common Wealth Inc.,which launched the Lake-to-River FoodCooperative in Youngstown, Ohio, saidthe co-op is working to rebuild thelocal food system in northeast Ohio andwestern Pennsylvania. For the newwave of local food co-ops and foodhubs, the effort often involves

communicating co-op values andadvantages to people who may knowvery little about cooperatives.

One of Converse’s main messages isthat Lake-to-River Cooperative’sbusiness model is centered on serving“a triple bottom line,” emphasizingbusiness practices that promotesustainability through its social,environmental and financial goals. “Amajor component of the social goals isfood justice through better access tolocal healthy food by the many low-and moderate-income people in theregion,” he said.

The local food movement, Conversestressed, is rooted in promoting self-sufficiency for food production whileproviding products that meet itsmembers’ food safety concerns.

The regional and local foodmovement that spawned the Lake-to-River Food Cooperative started in 2003as a farmers market, but the 18 growersgrew tired of “sitting around in aparking lot” waiting for customers,Converse said. So they transformed thebusiness into a multi-stakeholder co-op,which includes farmers and otherproducers, buyers and food processorsas members. It is currently consideringadding workers as members as the co-op grows and the staff expands.

The co-op helps members keepmore of the revenue generated fromtheir work, rather than seeing profits goto a corporate headquarters in anotherstate or foreign nation. The co-op thusfollows a circular, rather than linear,economic model, Converse said. Seeingthe various stages in the food valuechain as inter-related — and bringingthem into on over-arching co-op model— puts growers, processors andconsumers into mutually supportingefforts.

A major benefit of local food systemsis job creation, Converse said. If north-east Ohio could grow just 10 percent ofits own food locally, it would support8,000 new jobs. Growing 25 percentlocal food would create 27,000 jobs in

The greenhouse at the Villa Maria convent farm is just a small part of the convent’s ag operationin western Pennsylvania. The farm is a member of the Lake-to-River Food Cooperative inYoungstown, Ohio.

continued on page 41


Food hub operatorsshare insights needed

for businesssuccess

Editor’s note: This article is excerpted from Running aFood Hub: Lessons Learned from the Field, soon to beavailable from USDA as part of a technical report series onfood hubs. Matson is the principle, while Thayer and Shaware consultants, with Matson Consulting in Aiken, S.C.,which has been a leader for more than a decade in helping todevelop producer co-ops and food hubs. This research wassupported by VAFAIRS (a co-op and rural businessdevelopment center in Virginia) through funding fromUSDA Rural Development.

This article condenses into a “lessonslearned” format some of the criticalknowledge derived from interviewsconducted with 14 food hubs from across

the United States about this rapidly growing, but stillyoung, segment of the food industry.

In the best tradition of cooperatives, these food hubleaders hope others will learn from their experiencesand the roads they have traveled so far.

ByJames Matson,

Jeremiah Thayer,and Jessica Shaw

A father and daughter sell heirloom beans and other produce at the BathCounty Agricultural Education and Marketing Center, Owingsville, Ky. USDAphoto by Lance Cheung.

WhatWe’ve

LearnedSo Far


CustomersCustomer types varied significantly in the sample oforganizations interviewed. Ranging from individualcustomers to large-scale food service operations, thetargeted customer often dictates aspects of theventure, including whether or not safety certificationsare important, the level of infrastructure necessaryand the type of marketing approach used.

Some smaller food hubs focus only on localcustomers, selling primarily to restaurants,independently owned or regional grocery stores,community supported agriculture (CSA) associations,or individuals. Mid-scale food hubs also tend to servelocal customers, but also supply school districts,institutions (such as hospitals and colleges), largerregional chains or distribution warehouses forregional grocery stores. A few of the food hubs focuson national grocery store chains that supply localproduce to their customers by selling to distributionwarehouses for grocery store chains.

Lesson Learned: Determine yourlikely customers and the food demand unique toyour region (retail, wholesale, organic, grass-fed, etc.) and then tailor the food hub’s productsand approach to suit the identified market.

ProductsWhile produce, such as fruits and vegetables, are often themain staple of a food hub, many hubs also offer additionalproduct lines, including dairy products and meat, shelf-stable items and local grains and flours. The latterproducts can help extend their operating season andmitigate drops in revenue during non-production (usuallywinter) months. A few of the food hub leaders interviewedwere only marginally involved in produce sales. Instead,they focus on meats and related products.

Increasingly, handling value-added products is beingexplored by many food hubs. While none of the food hubsinterviewed manufacture their own value-added goods,many of them use these products to expand their productline. These products allow an opportunity for bettermargins than some traditional food hub products whilealso extending its season.

A few of the food hub operators interviewed alsoincluded distribution of non-local items, which still fit thecore values of the food hub. These items were oftenproducts not available locally, such as nuts, oils or coffee,or were designated as “specialty items” in some way, suchas foods labeled “fair trade” or “organic.”

Lesson Learned: Seek to source andprovide a mix of products that will allow you tosatisfy demand or an identified need in the market.This may include distribution of products that arenot strictly “local,” but still suit the mission of thefood hub.

LaborContinuity of labor in management and sales isimportant because frequent staff changes can have anegative impact on food hub operations. Some of thesurveyed food hubs experienced declines in salesvolumes during periods of employee transition becausefood hubs often rely on employee-customer relationshipmarketing.

Due to the specific skills needed for a food hub andreliance on relationships with producers and customers,finding good part-time labor is a common issue. Whilesome employees may be part-time or seasonal, they stillneed to possess the skills necessary to communicate withgrowers, especially in cases where there are productquality issues. Honesty and work ethic are two otherimportant traits to have in a labor force.

Nearly all the leaders interviewed have usedvolunteer labor in the past, or still use it in their currentoperations. But many cautioned that volunteer laborlacks consistency and skill continuity. While volunteersare useful when the food hub needs more help, to beeffective, the hub needs to maintain key skills and aknowledge base to achieve stability in operations andsales.

Lesson Learned: Volunteer labor can beuseful, particularly during start up or periods ofgrowth, but long-term success will require regularemployees and the continuity of institutionalknowledge and relationships they bring.


Food Safety CertificationsWhile each of the entities contacted expressed varyinglevels of concern and prioritization regarding food safety,every organization was aware of the future need toconsider safety certifications. A few food hubs have begunto require mandatory Good Agricultural Practices (GAP)certification of their producers, while others simply helpproducers become more aware of the types of food safetypractices in an effort to prepare them for the future.

The general consensus among those contacted was thatif not so already, safety certifications will soon become amandatory part of doing business. Almost all of theentities contacted are actively working in some capacity tomove their producers and the business towards safetycertifications.

The targeted customer base of a food hub has a largeimpact on its level of concern with safety certification.Organizations that focus on restaurant and direct retailcustomers are the least concerned with safety certification.That’s because these organizations are not pressured asmuch from their customers to offer GAP or other safety-

certified produce. Instead, they are able to rely on theirown assurances to customers regarding food safety.

Those with institutional customers – including hubsthat sell to hospitals and school districts, or those dealingwith sales of proteins – are typically much more interestedin food safety certifications and strongly encourageproducers to be certified. In other cases, the hubs usedsurveys and other methods to gauge the readiness ofmember-growers to accept safety certification as acondition for supply.

Lesson Learned: Allow the needs of foodhub customers to dictate the certificationrequirements of a food hub. Whether required bycustomers or not, food hubs should take a long-termview by maintaining awareness of the food safetyand regulatory environment in order to be preparedfor future demand.

SoftwareHub managers interviewed used a broad range ofinformation technology in their operations, including MSExcel, custom designed software, off-the-shelf productssuch as Quickbooks, specialty food hub software, or ablend of all of the above. In general, there is littleconsensus on the optimal software for food hubs.

Typically food hubs use software to track:• Inventory;• Finances;• Orders;• Customer information.

Food hubs that have dealt with the creation ofproprietary software emphasized that it is important tohave the input of both designers and those who arefamiliar with the food hub’s intended operations duringthe software design and implementation. Including both

of these perspectives during the beginning stages of theprocess allows a software designer to benefit from theinput of farmer contacts and can avoid costly redesigns inthe future through efficient design. They also note thatcustom software should be viewed as an ongoing process,and many hubs continue to change or add components foryears after an initial purchase, at additional cost.

Lesson Learned: There is no “one size fitsall” software solution. Conscientiously choosingsoftware to suit as many needs of the food hub aspossible will lead to the greatest efficiency inoperations, but will likely still not produce idealresults.

“You can’t run a business on good intentions.”


InfrastructureInfrastructure seemed to depend on two differentapproaches to operations:

Approach 1 — Food hubs providing more services— such as physical aggregation, grading, packing,sales and delivery — often have a warehouse,equipment and other infrastructure. Food hubs takingthis approach use the equivalent of a medium-sizedwarehouse (5,000-10,000 sq. ft.) that includedsufficient room for truck parking, loading areas,product storage, dry goods storage and coolingcapacity. As a food hub expands or decides to offerother services, such as light food processing orfreezing, supplementary warehouse space andadditional equipment are often necessary.

Of the food hubs operating with infrastructure,nearly all use company-owned trucks to do at leastsome local delivery of products to customers. Localtrucking resources typically consist of smaller short-haul vehicles. However, based on their circumstances,some also outsourced hauling with local truckingcompanies to move large volumes or product overgreater distances.

Approach 2 — Other food hubs — those thatprovide fewer physical services and instead focus oncoordination, payment, marketing, and promotion —often have limited infrastructure. These food hubstend to utilize much smaller warehouses (1,000-4,000sq. ft.) or a mix of owned warehouse space andborrowed space from other entities or food hubmembers. While there are examples of food hubsmaintaining long-term storage facilities, many use a“just-in-time distribution” approach that minimizesthe need for storage and cooling space. Food hubsthat use larger spaces often rent or lease unnecessaryspace to producers or other entities for storage tohelp offset costs.

Lesson Learned: Base infrastructureon the product handling and storage needs ofthe food hub, but incorporate a long-term viewof infrastructure and equipment to provideeasier transitions through growth periods in thefuture.

Viability and SuccessThe majority of the ventures that participated in theinformal survey were not operationally profitable. Toremain in business, many food hubs exhibited somecost-saving advantage, such as volunteer labor, logisticsarrangements and partnerships. Others had access tooutside funding, such as grants. Most have remained inbusiness by obtaining outside funds, whether in theform of donations, a grant or foundation funding.Others are part of a larger organization or obtain someform of business advantage.

Long-term financial goals almost always includedreaching a point where the business did not have to relyon outside funding. While a few hubs plan for outsidefunding to be a regular part of their operations for theforeseeable future, most believe that grants and othersources of short-term funding were necessary to beginoperations or to reach a new plateau, but were not goodoptions for the long-term, since continuation of suchfunding is not assured. Further, large amounts of timeand effort are required to apply for grants and otheroutside funding. The vast majority of food hubsexpressed a desire to cover operational costs internallyby increasing sales.

For the nonprofit food hubs, strategic goals includeacquiring grant funds, attracting donations andpartnerships, and other forms of community supportthat allow them to continue to expand their operationsto levels that may not be “profitable” in the short run,but permit them to remain viable as a mission-drivenorganization.

Lesson Learned: Utilize any availablefunding to get started, but keep in place a long-term strategic plan to achieve operationalprofitability; this is necessary to ensure long-termviability of the business.


OperationsFood hubs have proven to be innovators in dealingwith, and offsetting, costs. In an effort to sustain theiroperations, food hubs have limited the scope of theirinitial operations or acquired sources of outsidefunding and capital, formed partnerships or gainedaccess to advantageous infrastructure.

One venture began operations by renting a truckby the day and using a cell phone to communicatewith the driver. When the time came to invest ininfrastructure, efforts were made to sourceinexpensive facilities and used equipment that met thebasic needs of the business.

Another food hub leader said the business couldnot have been successful by only selling localproduce. The solution was to work with a largerspecialty manufacturer as a licensed distributor. Thisprovided the food hub with many new salesopportunities, as well as providing a large amount ofinventory, steady sales and products that could be soldyear round.

Several food hubs attempt to utilize existinginfrastructures and food systems rather thanattempting to “reinvent the wheel.” Theseorganizations have found ways to partner with foodservice companies to take advantage of the alreadyefficient logistics network and large volume of salesand marketing. This could also involve makingarrangements with food hub members or othernonprofit business entities for low-cost storage andcooling facilities or transportation equipment.

Several food hub managers said that if a ventureplans to begin with anything larger than a minimal-scale operation, they need to procure a large amountof starting capital to remain viable. If not fullyfunded, a significant portion of time and energy willneed to be expended to regularly obtain infusions ofcapital and sustain operations.

Lesson Learned: Actively seek to findoperational advantages through partnerships orworking with existing infrastructure in aregion. Make sure the food hub has sufficientfunding to sustain operations until revenues areat a sufficient level.

TransportationTransportation and delivery expenses were oftenidentified as the main cost issue for operating the foodhub. In addition to the basic cost of purchase or leasing,paying drivers and the time spent in organizing thelogistics of pick-ups from producers and deliveries tocustomers contributes significantly to the financialburden of the food hub. Even food hubs that have beenable to acquire trucks, equipment or other infrastructureitems through grants or other funding sources still dealwith the significant cost of ongoing maintenance.

Some food hubs have found ways to minimize thecost of transportation. Utilization of out-sourcedshipping and trucking often alleviated some of theburden of maintaining a consistently operationaldelivery method. Many hubs have establishedrelationships that help a trucking company fill emptyloads while providing efficient transportation for thefood hub and thus lower costs for shipping andtransportation than would have otherwise have beenpossible.

Lesson Learned: Whether leased orpurchased, trucking and logistics will often be oneof the largest costs of operating the food hub.Know your costs to avoid delivery expensesexceeding order values for deliveries.


Common GroundEach of the food hubs included in this study had uniqueoperations and goals that reflect their local communityenvironment. While there is great diversity among them,the food hubs also share some common ground,including:

■ All felt that their own market and sales levels were stillin a growth phase.

■ All were operating with minimal staffing. All staffmembers were fulfilling multiple roles in theorganization.

■ All had their own transportation infrastructure;however, their vehicle fleets were limited. Many usedlocal or regional transportation firms to augment theirtransportation capacity.

■ Many were interested in aggregating and selling value-added products, often as a season-extending service.

■ Only a few were directly engaged in processing. Someof the hubs that attempted processing in the past arenow outsourcing these activities to other firms.

■ The time and costs of safety certifications andinsurance were of concern to all. They expressed keen

awareness of the impacts of new food safetyregulations, especially those stemming from the FoodSafety Modernization Act.

■ Most possessed access to a small- or medium-sizedwarehouse (1,000-10,000 sq. ft.) for storage, as well asto holding coolers or their equivalents.

■ They rarely use formal advertising or media campaigns.The food hubs depended mainly on relationshipmarketing and point-of-sales contacts with producersand buyers.

Because of their adaptability, no one measure can beapplied to all food hubs. Each one must be measured byits success or failure in achieving its own underlying goals.

From fulfilling a specific social mission to achievingindependent financial profitability, food hubs arepositively impacting both their member producers andcommunities in numerous ways. Though much remainsto be learned about them, food hubs continue to be oneof the most exciting innovations in the local foods supplychain.

“If we could do it over again…”

Many of the food hub managers and leaders interviewedoffered insight into issues they had faced or providedinformation that was not directly related to the generalcategories covered by the interviews. Theserecommendations include: • Seek partnerships. • A local food bank, community kitchen or retail store can

provide access to distribution resources as well as storagespace and cooling facilities.

• Logistic partnerships will help offset transportation costs.• Be aware that if producers have already established direct

marketing relationships, it will be harder to convince themto participate in aggregated distribution. The hub may haveto work to educate producers about the benefit of joiningthe food hub.

• “Good intentions don’t run a business.” • Involve leadership that has the necessary business

experience and skill set to make decisions that will lead to

long-term success. While vision and passion are important,make sure decisions include a solid business-orientedviewpoint.

• Maintain continuity of human resources to retain the estab-lished relationships and institutional knowledge of the staff.

• No matter how well you think you know your market, youwill very likely have to be flexible in order to meet theactual demand. Be willing to change.

• Building a food hub is like running a marathon with intervalsprints every mile. Training, focus and perseverance arekeys to succeeding.

• Lack of funding will constrain your growth. • Volunteers can be hard to train and difficult to manage. • Develop training materials and forms (order forms, contract

forms, etc.) early in start-up process. Lacking thesedocuments can cause inefficiency. Take time to producethem correctly. ■

By Rob Brown e-mail: [email protected]

Editor’s note: Brown is director ofBusiness Ownership Solutions, a program ofthe Cooperative Development Institute.

Employees of threerural Maine businesses— Burnt Cove Market,V&S Variety andPharmacy, and The

Galley — are now the owners of thebusinesses. By forming the IslandEmployee Cooperative Inc. (IEC) —the largest worker cooperative in Maine— the employees were able to purchase

the businesses on Deere Isle, Maine,from retiring owners Vern and SandraSeile.

Combined, the three businesses areone of the island’s largest employers,supporting 65 jobs. The threebusinesses provide the community witha full array of groceries, hardware,prescription drugs and pharmacy items,craft supplies and other goods and services.

Local ownership seen as vitalWhen word first circulated that the

Seiles were thinking about selling thestores and retiring, employees wereconcerned that buyers who were notpart of the community might not

maintain the same level of services andjobs. Other employment options on theisland are limited, so keeping the jobswas a major concern for the localeconomy.

During the summer of 2013, theSeiles and their employees beganmeeting with the Independent RetailersShared Services Cooperative (IRSSC), apurchasing cooperative of independentgrocers in New England. Alsoparticipating in the talks was theCooperative Development Institute(CDI), a nonprofit group that providestechnical assistance to all types ofcooperative businesses. Theseconversations explored the idea of


Co-op Development Act ionMaine island community creates worker-owned co-op to retain local businesses, jobs

These workers are members of the new Island Employee Cooperative Inc. (IEC), which they formed to buy three businesses when the ownersdecided to retire after 43 years of commerce on Deer Isle, Maine. Photo courtesy IEC


transferring ownership of thecompanies to the workers.

All agreed that co-op ownershipwould be a win-win option. Theemployees worked with IRSSC, CDI,Specialized Accounting Services (SAS)and other advisors for nearly a year tocreate the worker cooperative, securefinancing and purchase the stores. Theoverall goal was to keep the ownershipand profits local and preserve jobs.

“We are pleased that we were ableto help the employees purchase thestores that Sandra and I have built over

the last 43 years,” saysVern Seile. “It’s our wayof saying thank you tothem and our customersfor their support.”

“This is a once-in-a-lifetime opportunity,” saysIEC President AlanWhite. “Many of us haveworked in these stores fordecades and we neverimagined this possibility.We know we have a lot tolearn and a lot of work todo to be successful. Butsuccess means we willreally achieve theAmerican dream —economic security andbuilding wealth through ownership,both for our families and ourcommunity.”

Sharing the load and rewardsIn a worker co-op, each worker-

owner has one (and only one) share inthe corporation and one vote in itsgovernance. Co-ops typically get theirstart when workers band together tolaunch a new business. Conversionsfrom conventional corporations are

much less common, especially ones ofthe size and scope of the IEC.

“The IRSSC serves smaller,independent grocers and retailersaround New England,” says MarkSprackland, IRSSC executive director.“We hope that this is only the first ofmany locally owned and operated co-ops that we can help form incommunities focused on sustainablegrowth.”

People across the country have beentrying to figure out the best way toassist business owners who want to

consider conversion to employeeownership, either as a growth strategyor as a retirement strategy. Co-opmembers and economic developmentstaff that work with them hope this co-op conversion will provide a model forothers. CDI, IRSSC, SAS and otheradvisors will continue to work with theIEC in the future to help build a strongownership culture and learn newmanagement, governance and financialplanning skills.

Financing the purchase Maine-based CEI and the

Cooperative Fund of New England(CFNE), two CommunityDevelopment Finance Institutions(CDFIs), organized the financing tobuy the businesses. Without thesefunds, the workers’ dreams of buyingthe stores and keeping them local wouldhave remained just that.

“This financial transaction representsthe best kind of collaboration needed tobuild wealth in Maine’s rural commun-ities,” says Cole Palmer, CEI loan and

investment officer. “CEIwas tremendously excitedto help the IEC realize itsgoal to purchase thesethree businesses.”

CFNE has workedwith cooperatives since1975 and was able tocontribute expertise tothe lending process.

“We’re proud tocommit to this veryimportant worker-cooperative conversion,which preserves localownership of thesebusinesses and retains 65essential jobs in thecommunities,” says Gloria

LaBrecque, Northeast loan andoutreach officer with CFNE. “Wecongratulate the worker-owners of theIEC on this milestone achievement.”

Now that the employees own thebusinesses, they are excited to have asay in how they are run and a share inthe profits they generate. As Vern Seilesays: “Now it’s their turn to build onand improve what we have done.”

For more information, visit:www.cdi.coop, or www.ceimaine.org. ■

Deere Isle, Maine, is the home of one of the nation’s newest worker coopera-tives, formed last year to help preserve 65 jobs and maintain businesses thatare crucial to the local economy.

“Success means we will really achieve the American dream — economic security and buildingwealth through ownership, both for our families and our community.”


Editor’s note: The following is condensedand adapted from articles that originally ranin CCA News, the member newsletter of theCooperative Communicators Assoc. Theoriginal articles were written by SherylMeshke of Associated Milk Producers Inc.(AMPI), Dana Kelroy of the CooperativeNetwork and Nickie Sabo of AMPI.

After more than 30 yearsas a “franchise player” inco-op communica-tions,David Sheets has beennamed “most valuable

player.” Sheets is the 2014 recipient ofthe H. E. Klinefelter Award, the highestaccolade bestowed by the CooperativeCommunicators Assoc., recognizing acareer devoted to advancing the state ofco-op com-munications. As senior vicepresident at RushShelby Energy, Sheetsdirects the communications efforts of the15,000-member electric cooperative thatserves nine east-central Indiana counties.

CCA’s other grand awards went toChris Hamon, CEO for White RiverValley Electric Cooperative Inc. inBranson, Mo., who won the CEOCommunicator of the Year Award, and toMichelle Ricard Geans, who won theMichael Graznak Award, recognizing heras one of the nation’s top young (underage 35) co-op communicators. She is acommunications specialist for BaldwinEMC in Summerdale, Ala.

The awards were presented duringthe closing ceremony of CCA’s annualCo-op Communications Institute, heldin Pittsburgh, Pa., in early June.

Co-op career of accomplishmentIn 1982, Sheets became the first full-

time communications specialist for anelectric distribution cooperative inIndiana. Three years later, he was amember of the first class to earn theCertified Rural Electric Communicatordesignation. In 1992, CCA presentedhim with the Graznak Award,recognizing him as an aspiring youngcommunicator.

When Terry Jobe was namedRushShelby’s president and CEO in

Co-op communications contest toppersCCA’s annual Co-op Communications Contest attracted 678 entries in

2014. Awards were presented at the Pittsburgh conference to winnersin about a dozen categories in each of four competition areas: Writing,Photography, Campaigns/Projects and Publications.

The top award winners in each contest area included:

■ Writer of the Year — Donna Abernathy, DLF CommunicationsServices, was selected based on a portfolio of her work that includedinvestigative and entertaining features, technical writing, co-opeducation articles and speech writing.

■ Publication of the Year — The communications staff of TennesseeFarmers Cooperative won for a special report, “The Sum of Us.” Theco-op annually creates a “corporate identification” publication thathas replaced its traditional annual report, but which still includesremovable financial report inserts.

■ Photographer of the Year — Mic Smith won for photographycontributed to South Carolina Living, the statewide electric co-opassociation’s member magazine. Smith was cited for capturingimages that were consistently well lit and framed, including adifficult-to-shoot nighttime concert.

■ Programs and Projects, Best of Show — Greg Brooks and SavannahChandler of Georgia’s Walton EMC won for the co-op’s social mediaprogram, which scored a perfect 100. The campaign included effortson Facebook, Twitter and “YouTube.” Judges praised the “engagingvoice,” “clear and effective language” and the “ability to addressdifferent audiences.”

■ USDA’s Rural Cooperatives magazine won first place for editorialwriting and third place for news writing. Both were won by DanCampbell. For a full list of award winners, visit: www.communicators.coop.

Sheets, Hamon, Geans

named top co-opcommunicators


2010, his first move was to name Sheetsas the cooperative’s senior vicepresident. “I wanted his experience andknowledge available to me and myboard at all times,” Jobe says. “I am aman of numbers who understands thevalue of working with a man of words.”

With a seat at RushShelby Energy’ssenior management table, Sheetscontinues to elevate communications toa place of importance.

A common theme in nominationletters for Sheets was his ability tocommunicate an idea to a wide varietyof people in a clear, concise manner.Sheets’ responsibilities include mediarelations and communications,including coordinating the cooperative’sannual meeting for 20 years. He alsosupervises employees responsible formember services, marketing,advertising and information technology.

As editor of the co-op’s monthlymember newsletter, Sheets leads a teamthat has been honored with numerousnational communications andpublications awards. His ability tomentor others “elevates him from aplayer to coach,” award presenterSheryl Meshke of Associated MilkProducers Inc. said.

The passion he shows for his work isequaled by contributions to hiscommunity. Dressed as a clown, he is afrequent entertainer at a children’shospital and he is beginning his 40thseason as a high school sports official,working basketball, football andvolleyball games, including officiatingat state championship finals.

“Dave set the bar high for those ofus who joined the cooperativecommunication business after him,”says John English, retired manager ofcorporate relations for Noble RuralElectric Cooperative.

The tall and short of it: Graznak award winnerMichelle Richard Geans requires a little boostin order to have an eye-to-eye conversationwith Klinefelter award winner David Sheets.Photo by Chris Villines, Tennessee Farmers Co-op

Rural

Mic Smith was selected as “photographer of the year” for this portfolio of photos taken for South Carolina Livingmagazine, the publication of the statewide rural electric co-op association.

Tennessee Farmers Cooperative won “publication of the year” honors for “The Sum of Us,” which includes thefinancial information typically found in an annual report, along with other information that makes it a striking “identity”

publication for the co-op.


CEO involves all incommunications

Under Chris Hamon’s leaderhip,White River Valley ElectricCooperative (WRVEC) “does morethan communicate effectively; itembodies the cooperative idea ofinvolving the member-owners andmaking the entire co-op, literally, a partof the effort,” one selection committeemember said. “Elected officials,policymakers and community leaderspay attention when they know they’rereceiving communications not just fromone person speaking for anorganization, but from the large bodyof people that organization representsand from its members individually.”

Hamon was saluted fordemonstrating his commitment tocommunication with his board, his staff,co-op members and the communitiesthe co-op serves through histransparency and willingness to speakout on key cooperative issues. Heincludes communication staff instrategic planning and encourages theirprofessional development.

Hamon, who has been with the co-op since 1985, has been willing to addstaff to ensure that all forms ofcommunication are well utilized. If amatter of national import arises in theenergy industry, he promotes an activerole for the co-op and instigatescreation of local marketing campaignsto inform and energize the votingpublic, says Diana Bradford, marketingcoordinator at WRVEC.

Among the communications effortshe has championed are: • Member Alliance Program — a

grassroots group that can bemobilized for action when legislativeor other issues arise that require aquick response;

• Communicating through videos andcommercials;

• Media Relations Day — A luncheonfor the media in the co-op’s five-county service area, which includes atalk by Hamon about vital issues formembers and the general public.

• Member Appreciation Days — EachFriday in October, during NationalCo-op Month, the communicationsdepartment arranges a lunch formembers at one of the five WRVECoffices and takes the opportunity tovisit with members about issues thatmay be affecting them and thecooperative.Hamon also represents Oklahoma,

Arkansas, Louisiana and Missouri onthe National Rural UtilitiesCooperative Finance Corporation,which helps to provide financing to

more than 900 cooperatives. In 2009,he won the J.C. Brown CEOCommunication Leadership Awardfrom the National Rural ElectricCooperative Association for“demonstrating a clear understanding ofand commitment to the strategic role ofcommunications in employee, memberand community relations.”

Multi-talented Graznak winner Michelle Ricard Geans is a key

player in producing Baldwin EMC’spublications and is known for herabilities to design, photograph andwrite. She also shines when developinginternal and external communicationsprojects and campaigns.

A pivotal moment in Geans’ co-op

career occurred when she beganwearing a pink hard hat that eventuallyignited the “Pink Power” campaign in2011, which raised funds for breastcancer research. She first donned thepink helmet when photographing andinterviewing co-op linemen and otheremployees. Soon, at their request, allwork crews were wearing the pink hardhats to raise breast cancer awareness.

Geans designed the logo for theeffort, photographed campaignhighlights and wrote feature storiesabout it for the cooperative’s AlabamaLiving magazine. The Pink Powercampaign has received both state andnational recognition. Now in its fourthyear, the idea is spreading throughoutthe country.

“Michelle is always willing to lend ahand with a cause; she’s always the firstto help with any cooperative oremployee project,” says Rebecca Shobe,manager of communications forBaldwin EMC. “She has a genuinetalent for leading others andencouraging them to get involved, andalways manages to add a splash ofappropriate humor in the mix.”

That humor has been a part of thecommunication strategy for Geans, whopreviously worked for a TV station. Forexample, she took the commonSouthern adage “Bless your heart,” andturned it into a slogan for BaldwinEMC’s heart walk.

“Michelle has an eye forphotography that tugs at the heart,”says Graznak committee memberMegan McKoy-Noe. “She breaks herwriting into easy-to-consume chunks –a great tool in the age of shorterattention spans.” Geans’ work hasearned multiple state and nationalawards, including the 2011 CooperativeCommunicator of the Year for the stateof Alabama.

From singing “This Little Grid ofMine” at a co-op event, to decking outthe state of Alabama in pink hard hats,this Graznak winner makes life a bitbrighter (and funnier) wherever shegoes. ■

Chris Hamon



Why women farmers are key to global food security The Missing Piece


By Hannah Guedenet, Paul Guenette and Lydia Mbevi-Nderitu

Editor’s note: The authors are all withACDI/VOCA, where Hannah Guedenet iscommunications and technical manager;Paul Guenette is executive vice presidentfor communications and outreach;and Lydia Mbevi-Nderitu is regionalgender and youth specialist.

Since its founding in1963, ACDI/VOCA haskept rural cooperativesat the heart of its visionof a world in which

people are empowered to succeed. Thisvision has resulted in millions offarmers and entrepreneurs achievinggrowth, thanks to the cooperativebusiness model.

These cooperatives have mobilizedcapital, pooled knowledge and achievedscale. Such groups not only catalyzelocal economic growth, but often alsoserve as the “glue” for social initiativeand effective, equitable communityplanning.

Cooperatives are an important wayto group rural producers into anefficient, effective interface withmarkets — an essential condition thatresults in major contributions to local,regional and global food security.Farmers engaged in cooperatives notonly increase their own incomes andhousehold food security, but theirimproved food production and post-harvest handling practices lead tostronger food markets for the region.

Women are the ‘missing piece’In recent years, it has become

increasingly apparent that manycooperatives have been overlooking one

key group: women. Women farmersplay a major role in food production,particularly in rural areas of thedeveloping world. But they are oftenmarginalized when it comes toaccessing farming services, such asimproved seeds, equipment andtechnical knowledge.

A recent report by the World Bankand ONE campaign found that femalefarmers in sub-Saharan Africa are 13 to25 percent less productive, in terms ofyields, than their male counterparts.The report suggests that closing this

gender gap could provide much-neededeconomic growth to the continent.

Lydia Mbevi-Nderitu, ACDI/VOCAregional gender and youth specialist,based in Nairobi, Kenya, has spent alarge part of her career working withrural farmers. She has worked to findways to increase women’s participationin, and benefit from, ACDI/VOCA’sprojects. In the following excerpt, sheshares her experience working with alarge farmers’ association in East Africato help them see the value of taking agendered perspective to their approach.

Nancy Winnie (facing page) is a member of afarmers’ group in Liberia that is working withACDI/VOCA’s Liberian Agricultural Upgrading,Nutrition and Child Health (LAUNCH) project.The project works through farmer associationsto teach growers how to use environmentallysustainable production techniques. Photoscourtesy ACDI/VOCA

“kEarly in my career, I was one of those who thought of farmers asmen — I just lumped them all together and never really thoughtabout the role women play in farming. My eyes were opened when aproject I worked on was audited and scored poorly in genderintegration. That led me on a new career path to learn more abouthow development projects could function differently and ensure thatboth men and women benefit.

“For 50 years, ACDI/VOCA has worked in development toensure food security and economic empowerment for communitiesaround the world. In 2012, ACDI/VOCA launched its genderpolicy, a commitment to women’s empowerment and mainstreaminggender in all its activities. ACDI/VOCA has learned through ourwork that using gender approaches and analysis is part of doing“smart” development. Gender approaches and tools allow us to bringan awareness of gender issues to our program design,implementation, and monitoring and evaluation activities. My role isto provide that gender support to our projects in Africa.

“As part of my job, I was introduced to a large farmers’association in East Africa that has 25 million members and operatesin 10 countries. In carrying out a gender assessment of their work, Ifound some of their leadership thought like I had: that their memberswere a homogenous group. They did not have membership datadisaggregated by gender or age and couldn’t tell you how many oftheir members were women.

“Though the federation has provided services to its members since2002, we agreed that the leadership needed to look closer at theirmembership base so that the services they provide are beneficial to allmembers of the household and, ultimately, the community. It wasinteresting to see that the national farmer leaders from Rwanda,Burundi and Congo whom I interacted with had very high levels of


The gender policy the federation putin place is just the beginning in thecomplex and challenging task ofempowering female farmers.Organizations that are resistant tochange and existing power structuresthat are reluctant to cede power aredaunting hurdles to overcome. Socialpatterns are firmly entrenched indecision-making systems, such asmaintaining membership rosters basedon the man’s name or tyingmembership eligibility to land title —which is often in the man’s name.

Women and food securityThe shift to include female farmers

and involve women members in farmersgroups is vitally important, particularlyin light of a growing global populationand rising rates of food insecurity.Female farmers can play a significantrole in improving food security,especially in rural areas.

When cooperatives like the one inEast Africa ensure inclusive particip-ation of female farmers in theiractivities, these women have access tonew communication technologies thatwill inform them about improved seedvarieties, cultivation techniques andpost-harvesting handling strategies.According to the United Nations’ Foodand Agriculture Organization,improving women’s access to the sameproductive resources as men couldincrease yields on their farms by 20-30percent. This would ultimately lead toas much as a 17-percent decrease in thenumber of hungry people worldwide.

Financial institutions serving the“missing middle” space between formalbanks and microcredit institutions areon the lookout for better ways to reachrural farmers. Cooperatives can providethat link — and cooperatives with anengaged female membership offer theseinstitutions reliable borrowers.

Research shows that femaleborrowers are generally more likelythan men to make their payments ontime and repay loans in full. This accessto finance continues to strengthen

i”

knowledge about production and trade within the East Africa region,but most of these activities were going on without specificallyincorporating the voices of half the population of the region —women.”

Adding a gender perspective“Through our African Institutions Innovation Mechanism —

Assist (AIIM Assist) project, I began the process of working with thefederation leaders and staff in the secretariat to write a gender policy.The policy informs how they target both men and women in theirservice provision and ensures that benefits and services are equallydistributed. Ultimately, their newly appointed gender and youthadvisor presented a draft policy to the board of directors, which theyapproved.

“The policy outlines the federation’s commitment to genderequality and women’s empowerment at the secretariat level, wherestrategic decisions are made and at the farmer level where projectsand proposals are developed. Going forward, the federation willroutinely collect and report key data by sex and age. The federationwill also ensure that services are designed to be accessible to and meetthe needs of all members, based on gender analysis to be carried out bythe secretariat.

“With the board’s commitment to the new gender policy, thefederation is prepared to put in the effort required to ensure that thisfirst step of developing a gender policy can result in genderintegration in activities and programs.The move by the federation todevelop and implement a gender policy will hopefully serve tostrengthen the position of female farmers throughout East Africa.

women’s ability to improve theirfarming practices and invest in new andbetter ways of growing their farms,which sets them on a path to moreeconomic freedom and more security.

In addition to her work with farmersgroups in East Africa, Lydia Mbevi-Nderitu played a pivotal role inincorporating gender in ACDI/VOCA’sFarming as a Business training module,which became Farming as a FamilyBusiness. This updated gender-sensitiveapproach addressed men’s under-valuingof women’s time, skills andcontributions to farming activities.

In Kenya, the approach led towomen taking on more on- and off-farm income-generating activities,including kitchen gardens, poultryproduction and sweet potato processing,which increased household foodsecurity. Farming as a Family Businessalso promoted women’s participation infarmers associations and gave them alouder voice as leaders and change agents.

Aiding women farmers in Ghana

In Ghana, the AgriculturalDevelopment and Value ChainEnhancement (ADVANCE) project hasworked closely with women farmers toimprove their access to services. Theproject used short message services andvoice messages in local languages toshare agriculture advice, financial tipsand market information with womenfarmers.

In one area of northern Ghana, theproject trained women’s groups onimproved agricultural practices, such asplanting in rows instead of broadcastingseed. It also connected the women witha “nucleus farmer” — a larger farmerwho has access to markets, equipmentand inputs — who provides them withfertilizer, improved seeds and plowingservices. After the harvest, the smallfarmers repay for this help with bags ofmaize.

The women are now using improved

plant varieties and fertilizer and haveincreased their yields from one bag ofmaize per acre to seven-to-nine bagsper acre. The nucleus farmer alsoappreciates working with the women,who have a high repayment rate ofaround 98 percent. As a result, nucleusfarmers throughout the projectintervention area started working withmore women farmers; the proportion ofparticipating small farmers who werewomen increased to 39 percent, upfrom 26 percent, over three years.

The key to achieving broader foodsecurity is to strengthen farmercooperatives and federations. Suchgroups provide the crucial link betweenthe world and the rural farmer. Andfarmer cooperatives cannot be strongwhen they ignore the abilities andcontributions of half of the farmers.They can become stronger by affirminggender equality and by embracingwomen’s empowerment at all levels ofthe organization. ■

The key to achieving broader food security is to strengthen farmer cooperatives and federations, according to ACDI/VOCA. But farmer co-opscannot be strong if they ignore the abilities and contributions of half of their farmers, such as this Kenyan grower in her maize field (holding a bag ofimproved maize seeds) and (facing page) these vegetable growers in Angola.


Real Pickles shares lessons learned since converting to a co-op

Our first year as a co-op

Members of the workers’ co-op that now owns and operates Real Pickles in Massachusetts display some of their raw ingredients and finishedproducts. The co-op has taken great care in to clarify the distinct responsibilities of the worker-owners, the board of directors and the staff. Photocourtesy Real Pickles. Cupcake photo illustration by Stephen Thompson/USDA.


By Kristin Howard

Editor’s note: This article is reprinted,with minor changes, from Ferment, theReal Pickles’ blog, at: realpickles.blogspot.com, where it was originally posted. Theauthor is a worker-owner of theMassachusetts-based Real Pickles co-op.

We recently wrappedup our fiscal year atReal Pickles. In manyways, it was a typicalyear for the business.

Interest in fermented foods hascontinued to rise, and the year wasanother strong one for us.

As is often the case, the uncertaintiesof the growing season necessitated somecreative problem solving; a wet springin our region resulted in much lessearly cabbage than we were expecting.But in the end, we got all of the freshingredients we were hoping for andprocessed over 300,000 pounds ofNortheast-grown vegetables during ourproduction season. That’s an increase ofabout 40 percent over last year!

What was different about this pastyear, however, was our businessstructure. May 9 marked the firstanniversary of Real Pickles’ transitionfrom sole proprietorship to cooperativeownership. It took a lot of work tobecome a co-op; now the process ofrunning the business involves bothshared effort and reward for our newgroup of member-owners.

Some of what we encounteredduring our first year was expected,while other things took us a little moreby surprise. As an increasing number ofbusinesses consider transitioning to thecooperative model, we want to sharesome of our experiences so far.

Learning to be business ownersAs Real Pickles made the structural

shift to becoming a co-op owned by itsemployees, those of us who hadn’tpreviously been owners knew we wouldhave to make the mental shift tothinking like owners. Looking back a

couple of years, the process started witha group of us who worked together tofigure out if Real Pickles’ transition to aworker co-op made sense for thebusiness and for each of us as individualpotential owners. We spent quite a bitof time on activities that served thejoint purpose of strategic planning andpracticing the art of ownership.

Inspired by our friends at SouthMountain Company (a “cooperativelyowned design/build company” onMartha’s Vineyard), we prepared anexercise that encouraged us to articulatewhat kind of growth we want for RealPickles and the possible outcomes ofdifferent approaches for our future.Since completing the transition, we’vecontinued this important strategicplanning work.

To further foster a learning culturein our business, we started holdinginternal classes on five core topics:Social Mission, History of Real Pickles,the Cooperative Movement, Financesand Governance. While all staff peopleattend, all potential worker-owners arerequired to complete these classesbefore becoming part of the co-op.This has given us all a common base ofunderstanding of Real Pickles as acooperative business and some of thetools we need to be effective businessowners.

The need to think like owners washighlighted when we recently werelooking at increasing certain benefitsfor staff. In this case, it was starting aReal Pickles-sponsored retirementaccount, increasing our paid time offand implementing a family leave policy.While we as employees were, inprinciple, supportive of enhancingbenefits for ourselves and our co-workers, as owners we also had to takeresponsibility for the impacts of thesedecisions on the business that providesus with employment.

When we looked at the costs in ourbudget for the next year, we ended upproceeding more cautiously, scalingback the new benefits for the upcomingyear based on the understanding that

we will revisit this topic after we haveanother year as a co-op under our belts.We should then be able to betterenvision what long-term sustainabilitylooks like.

Another example of new ownershaving to broaden their perspectivescame recently when it was time for thefirst annual review of our generalmanager. A small group of boardmembers was formed to conduct thereview process.

This process of evaluating ourgeneral manager — who is also thebusiness founder, hired many of us andto whom many of us directly report —exemplifies how the workers have hadto step up and manage multiple roleswith this new cooperative. In the end,the review went extremely well. It was apowerful experience for all involved anda clear example of what makes a co-opdifferent from other business models.

Charting our futureLast May, as we looked forward, we

knew that if the co-op was to besuccessful over time, we would have tomake worker-ownership appealing tomore staff people. We expected thatother employees would see the value ofbeing worker-owners, but we didn’texpect it to happen so quickly. Evenbefore we officially made the transitionto a co-op, two more staff peopleexpressed their interest in worker-ownership.

In the midst of working on ourbusiness strategy, investment campaign,incorporation and legal documents, wehad to scramble to articulate the “pathto worker-ownership” at Real Pickles,with an eye to finding the balancebetween making the ownership processclear and accessible to workers whilemaintaining a high level of training andengagement for potential newmembers.

We have also been careful to createclear distinctions between theresponsibilities of the worker-owners,the board and staff. We wrote ourbylaws with an eye to these issues but,


taking a cue from fellow worker co-op(and fair trade pioneer) EqualExchange, we later also created agovernance matrix that both lays outresponsibilities from our bylaws (such asonly a consensus of all worker-ownerscan amend Real Pickles’ mission). Ourbylaws also clearly communicate what

body is accountable for other areas ofthe business (for example, the generalmanager creates the annual budget tobe ratified by the board of directors).This clarity of responsibilities hasserved us well so far; the delineation ofauthority and oversight has also helpedus to work efficiently.

For Brendan Flannelly-King, RealPickles’ facility manager and one of thefive founding members, much of thework of setting up the co-op feltabstract and he says it was oftendifficult to imagine what it would belike to be an owner. “In some ways,” hesays, “owning the business has beeneasier than I had expected. It’s hardwork, but since the worker-owners as abody aren’t involved in operations, wehave been able to really focus onstrategy.”

As we look to our second year, we’reworking to anticipate the systems thatwill help us to be even better businessowners and will help make futuredecisions as clear and simple as possible.

Real Pickles and our community

Real Pickles as a sole proprietorshiphas long had a strong network ofsupport within the community, and weknew we would need to engage thatnetwork in a variety of ways as we madethe transition to a cooperative. Soonafter our transition, we gathered agroup of community members to form

a board of advisors to help us look atstrategic planning, particularly the issueof how to grow our business in a waythat is thoughtful and sustainable.

This topic has provided fodder forenergetic meetings, with lots of debateabout competition, mechanization,growth and sustainability. As worker-

owners, we have been inspired andmotivated by these discussions.

We have also found that the outreachwork we did throughout the monthsleading up to our co-op transition has

continued to benefit us. Real Pickles’local following has grown and becomeeven more dedicated — we sold over7,000 more jars in the Pioneer Valley in2013 than we did in 2012! It isencouraging that worker cooperationappears to have value not only for our

own employees, but also for customerswho can see its benefits for the widercommunity.

Central to our vision as a sustainable,mission-based cooperative is furtherengaging our community — includingthe growers who supply us, the farmstands, food co-ops, natural food stores

and other businesses that carry ourproducts, the people who purchasethem, the investors who helped financeour transition, and the co-ops that havesupported us along the way — as we

chart the future success of our business. Thanks to the many people who

have supported us in this exciting firstyear of what we hope will be a long andinspiring journey. A co-op is acommunity effort, and we could nothave done it without you! ■

As they look to their second year as a co-op, members are working to anticipate the systemsneeded to become better business owners.

“While we as employees were supportive of enhancing benefits for ourselvesand our co-workers, as owners we also had to take responsibility

for the impacts of these decisions on the business.”


NewslineSend co-op news items to: [email protected]

Co-op developments, coast to coast

GROWMARK names Spradlin new CEO

Jim Spradlinhas been namedchief executiveofficer ofGROWMARKInc., effectiveSept. 16, 2014. Hesucceeds JeffSolberg, who willretire inSeptember.

Spradlin was most recentlyGROWMARK vice president ofagronomy. He has also served asmanager of the co-op’s energy andagronomy divisions. His other positionswithin the GROWMARK system ofcooperatives include controller ofSchuyler-Brown FS and regionaladministrative director/general managerof Piatt Service Co., among others.

“Jim has the skills, knowledge,experience and support to successfullylead GROWMARK into the future,”says GROWMARK Chairman andPresident John Reifsteck.

Spradlin is a 1982 businessadministration and economics graduateof Illinois College, Jacksonville, Ill. Heis one of five members of the industryadvisory council for the PurdueUniversity Center for CommercialAgriculture. He serves on the board ofdirectors for The Fertilizer Instituteand is a former local director of RotaryInternational.

“GROWMARK and its FS membercompanies have a long-standingreputation as a progressive and reliablesupplier of quality products and

The 17thAnnual FarmerCooperativesConference,Nov. 6-7 in

Minneapolis, will provide a uniqueopportunity to hear cooperativeleaders assess their businessenvironment.

Among the speakers will be ÅkeHantoft, Swedish farmer and boardchair of Arla Foods, Denmark, whowill discuss Arla’s Europeanexpansion and the development of agovernance system acrosscountries. Other confirmed speakersinclude: Michael Boland, professorand director of the University ofMinnesota Food Industry Center;Terry Fleck, executive director of theCenter for Food Integrity; AndreaBonime-Blanc, CEO and founder ofGEC Risk Advisory; Phil Kenkel,professor at Oklahoma StateUniversity; Greg Wickham, seniorvice president for businessdevelopment, DFA; and PatrickHessini, CHS vice president fortransportation and distribution.

Topics will include:

• Exploring Non-qualified andUnallocated Equity — Are thesealternative strategies the rightchoice for your cooperative? Whatis the right balance betweengrowth and member-owner rights?

• Assessing and Managing Risks inthe Global Market — Participantswill assess risks faced bycooperatives and will leave withthe tools to better understand andact on these risks.

• Incorporating Sustainability IntoStrategic Plans — Industry expertswill relate how to develop a long-term sustainability strategy.

• Food, Agriculture and ConsumerTrust — Cooperatives will learnabout new consumer trends,implications for the ag industry andsteps to rebuilding the public’s trustthrough transparency.

• Transportation, Infrastructure andImpacts — Industry experts willassess the impact of transportationchallenges on the distributionsystem. Co-op leaders will sharetheir unique experiences inovercoming transportation andlogistical challenges.

• Evaluating Risks and Benefits ofBig Data — This session willexplore trends and impacts of bigdata on farmer co-ops.

For more information, visit:www.uwcc.wisc.edu, or e-mail AnneReynolds at: [email protected]. ■

Critical co-op issues to be explored Nov. 6-7


services, for being easy to do businesswith, and for its highly trainedemployees who operate with integrity,”Spradlin says. “It is truly an honor tohave the support of the GROWMARKboard of directors as we work togetherto guide the GROWMARK system.”

GROWMARK is a regionalcooperative with annual sales of $10.1billion. It provides agronomy, energy,facility planning and logistics productsand services, as well as grain marketingand risk management services in morethan 40 states and Ontario, Canada.

Agreement to boost Kenya’s co-op sector

An agreement signed June 4 byNCBA/CLUSA and the government ofKenya solidifies the co-op tradeassociation and internationaldevelopment organization’s leadershipin Kenya’s cooperative sphere. The pact

is also expected to better positionNCBA/CLUSA for future work in thecountry. Cooperatives in Kenya are atthe forefront of enhancing productivityin agriculture while fighting povertyand promoting economic and socialequity.

At a ceremony in Nairobi, MikeBeall, CEO and president ofNCBA/CLUSA, and Wilson Songa,executive secretary of Kenya’s Ministryof Industrialization and EnterpriseDevelopment, signed a memorandum ofunderstanding, which had been a yearin the making.

“Both NCBA/CLUSA and theKenyan government are committed tothe development of rural communitiesthrough cooperative development,capacity-building, enhanced foodsecurity and livelihood improvement —especially among women and youngpeople,” says Amy Coughenour, theassociation’s chief operating officer forinternational development.

About 70 percent of the populationof Africa is under age 30, making youngpeople a key demographic to engage indevelopment, Beall says. NCBA/CLUSA has been active in Kenya since

2001, creating and implementingdevelopment projects that strengthenrural enterprises and facilitate access toimproved health services, foodproduction, information and productsthat lead to increased profitability andcompetitiveness in food security

and health. Currently, NCBA/CLUSA heads Yes

Youth Can!, a project that groomsthousands of disadvantaged youngpeople for future employment,entrepreneurship and communityleadership. It also implements theCooperative Development Program inKenya, which enlists cooperatives toadvance food security and nutrition formothers and children under the age offive.

Beall was also among a team ofprogram facilitators and mentors inNairobi helming the first-ever,continent-wide African CooperativeDevelopment Education Trainingprogram. The focus was on savings andcredit cooperatives (SACCOs) as keyplayers in sustainable communitygrowth.

Beall also traveled to Mombasa, onthe Kenyan coastline, to meet with agroup working to save money at thelocal SACCO to help build smallbusinesses. They have launched amotorbike taxi service, a barbershop, acinema, a video game arcade and a“chip (French fry) shop” in Mombasa.

Beall also met with a group ofcommunity health volunteers whofollow cooperative principles. Thevolunteers undergo training byNCBA/CLUSA staff and partners, thenwork within their local communities toraise awareness of HIV prevention, safebirthing practices and other healthissues.

I Love My Farmers Market celebration

American Farmland Trust’s (AFT) ILove My Farmers Market celebration is asummer-long effort asking consumersto champion their local family farmersby shopping at a nearby farmers market,many of which are cooperatives. Youcan vote for your favorite farmersmarket until midnight on Sept. 13.

AFT says supporting family farmershelps them to steward and protect theirland from development. The 100 MostCelebrated Farmers Markets will beshowcased on a continuously updated

NCBA/CLUSA President/CEO Mike Beall (left) and Wilson Songa, executive secretary of Kenya’sMinistry of Industrialization and Enterprise Development, sign an agreement formalizing the roleof Beall’s organization in helping to boost Kenya’s co-op business sector. Photo courtesyNCBA/CLUSA


The rescue of a herd of 176 alpacasin dire need on an Oregon farm wascoordinated earlier this year by CrossCreek Alpaca Rescue. Outraged by thepoor condition of the animals, theColumbia Alpaca Breeders Association(CABA), the Northwest regionalaffiliate of the Alpaca OwnersAssociation Inc. (AOA), donated morethan $6,500 toward the care of therescued alpacas, which were housedat the Oregon State University Schoolof Veterinary Medicine.

AOA members throughout NorthAmerica have made further donationsfor the care of the animals. As of earlyJuly, all of the alpacas had beenplaced with new owners, except fortwo that will become part of theuniversity’s herd.

The exact circumstances that led tosuch dire conditions for the herd areuncertain, but the situationunderscores the need for continuededucation to help prevent similarsituations from occurring, AOA says.

The alpaca industry has grownsteadily in North America during thepast 30 years, numbering about 230,000registered animals at present. But it isnot a “get rich quick with a part-timejob” venture, AOA stresses. Manypeople make a successful living in theindustry but, as with any business,research and hard work are necessary.

A good way to start researching thebusiness is to talk with other alpacaranchers in your area. A listing offarms can be found at:www.alpacainfo.com. A helpfulrepository of information about alpacascan be found at: www.ariACADEMY.com.

“Learn from someone withexperience and integrity,” says LonaNelsen Frank, owner of ALPACAS ofTualatin Valley LLC in Beaverton, Ore.“Buy your first alpacas from someonewho will mentor you 24/7 — not just atthe point of purchase, but in thefuture.” Another great way to learn

about the industry is to attend alpacashows and events.

Thomas and Connie Betts ofCascade Alpacas of Oregon in HoodRiver, Ore., say a well thought-out,detailed business plan has helped themto succeed. “Keep focused on yourgoals and pay attention to cash flowand expenses. It is important to not gointo debt, in case things don’t turn out,”Connie Betts says. “From thebeginning, we were prepared forworst-case scenarios.”

Beth Osborne of the AlpacaHacienda in Temecula, Calif., originallyconcentrated solely on breeding high-end stock. Her focus today is to be anasset to her community by providingjobs, hosting community events andtours and by providing communityservice hours for high school students.She sells handcrafted alpaca-fiberproducts at her farm store and boardsalpacas at her ranch to earn additionalincome.

AOA, based in Lincoln, Neb., is thelargest alpaca association in the world.It facilitates the expansion of a strong,sustainable alpaca industry throughthe tracking of bloodlines, registration,education, the national show system,marketing and public relations. Formore information, visit:www.alpacainfo.com.

All of the alpacas rescued a few months ago from an Oregon farm have been placed with new owners. While the market is developing forfashion items made from the exquisite wool of alpacas (below), raising these animals is “most definitely not a get-rich-quick scheme,”warns the Alpaca Owners Association Inc. (AOA). Photos courtesy AOA

Alpaca herd rescue shows need for education


scoreboard at: http://lovemyfarmersmarket.org/, where you can also go tovote. The final Top 100 will receive aspecial seal to place on their outreachmaterials.

Co-op promotes SweeTango apples

Growers of SweeTango apples areplanning a “full-on retail campaign”this fall featuring an interactive mappopulated with retail locations,provided by consumers’ Tweets andtexts. Growers are capitalizing on theapple’s short season, called a “hyper-season,” to encourage consumers to getinto the “sweet spot of apple season”with SweeTangos, according to a co-op

news release. The apple is available onlyfrom September into November. In2013, the entire crop sold out in 60days.

Only growers who are members ofNext Big Thing, a growers’ cooperativein Lake City, Minn., are allowed togrow the SweeTango, developed byusing traditional plant crossbreedingtechniques. Co-op members share their

expertise with each other to refinemethods for growing, harvesting andshipping this new variety.

Apple breeders at the University ofMinnesota spent more than a decadedeveloping the Minneiska cultivar, theapple tree that produces SweeTango. In1908, the University of Minnesotacreated the Fruit Breeding Farm, nowknown as the Horticultural ResearchCenter, on 80 acres near Victoria,Minn. During the next century, thefarm grew to become a center of fruitresearch and breeding, particularly fornorthern climates. Apple varieties thathave been named and released by theuniversity include Fireside, Haralson,Honeygold and, more recently,

Chefs Vinny Dotolo and Jon Shook celebrate the arrival of SweeTango apple season by showcasing recipes at a media event/luncheon held lastyear at a restaurant in Los Angeles. The apples are grown by the Next Big Thing cooperative. Photo by David McNew


Honeycrisp and Zestar.The cooperative has traditional retail

tools available, including recipe cardsand signage. The Sweet Spot campaignis also scheduled to include social mediacontests and giveaways via SweeTangochannels.

Illinois grain co-op to merge with CHS

Members of Carrollton FarmersElevator, a grain cooperative based inCarrollton, Ill., in early June approved amerger with CHS Inc., the nation’slargest farmer-owned cooperative. Theproposal passed with a 75-percentapproval and will become effective inSeptember, pending approval by theCHS board and appropriate duediligence by both organizations.

Carrollton Farmers Elevator hasserved the grain merchandising andhandling needs of farmers insouthwestern Illinois since 1918. Uponcompletion of the merger, theCarrollton operation will join with thecurrent CHS Country Operationsbusiness unit based in Lowder, Ill.

“The Carrollton Board has alwaysworked hard to maintain a strongbalance sheet, so we could takeadvantage of opportunities like thisone,” says Rick Steinacher, CarrolltonFarmers Elevator board chairman.Chris Howard will serve as locationmanager under the new business,reporting to CHS-Lowder GeneralManager John Bender.

In other CHS news, GleadellAgriculture Ltd., in Lincolnshire,England – the United Kingdom’s thirdlargest agricultural trading anddistribution company — and CHSEurope Sarl, a division of CHS Inc.,have entered into an agreement underwhich CHS will provide global fertilizersourcing, mainly granular urea, tosupport Gleadell’s ag supply chain.

CHS Europe Vice President andGeneral Manager Roger Baker said thepartnership is part of the cooperative’sfocus on global fertilizer distributionexpansion.

Diglio new GM at Michigan Milk

Michigan Milk ProducersAssociation (MMPA), Novi, Mich., hasnamed Joe Diglio as the cooperative’s

new generalmanager. Digliohas been servingas acting generalmanager sinceMay.

Diglio has 23years ofexperience withMMPA, serving

most recently as the director of financeand controller. He has served in avariety of capacities in the accountingdepartment. He holds a bachelor’sdegree from Wayne State Universityand is completing a master’s degree inmanagement at Walsh College.

“We believe Joe’s extensiveknowledge of the co-op’s operations andmanagement will provide a solidfoundation as he takes over theleadership of the MMPA team,” saysKen Nobis, dairy farmer and MMPApresident. “We are excited about theopportunities we see on the horizon forMMPA, and we have the utmostconfidence in Joe and the rest of theMMPA staff.”

As MMPA general manager, Digliowill lead 200-plus employees, providingmilk marketing services to dairy farmersin the Great Lakes region. MMPAoperations include milk processingfacilities in Ovid and Constantine,Mich. During the last fiscal year,MMPA marketed more than 4 billionpounds of milk for its 2,000 farmer-owners in Michigan, Wisconsin, Ohioand Indiana.

USDA investments help grow rural businesses

Agriculture Secretary Tom Vilsack inMay awarded loans and grants toorganizations in 14 states to supportrural infrastructure, job creation andbusiness development.

“Our small rural businesses need

first-class infrastructure to be world-class competitors in the globaleconomy,” Vilsack said. “To achieve ourcommunity-based development goals,USDA is investing in the infrastructureof the rural economy by providing loansand grants to local partners who canleverage the funds with other financingfor projects that have broad economicimpacts.”

The funding is being providedthrough USDA’s Rural EconomicDevelopment Loan and Grant(REDLG) program. Under thisprogram, USDA provides zero-interestloans and grants to utilities that lendfunds to local businesses for projects tocreate and retain employment in ruralareas. The revolving loan funds broadenthe program’s reach and create amultiplier effect for its impact.

The funding will help organizationssuch as the Benton Rural ElectricAssociation in Washington, which willuse a $750,000 loan and a $300,000grant to expand the wastewatertreatment facility at the port ofSunnyside. This project serves value-added agricultural processing facilitiesin the Pacific Northwest. Withimprovements made possible by thisinvestment, 50 jobs will be created and263 others will be saved.

The Southern Pine Electric PowerAssociation in Taylorsville, Miss., isreceiving a $2 million loan that will beused to help Polk’s Food Productsremodel internal refrigerant andprocess-control systems at its 50,000-square-foot plant in Magee, Miss. Theproject will help save 115 jobs inSimpson County, a persistent povertyarea.

USDA is assisting Simpson Countythrough its StrikeForce Initiative forRural Growth and Opportunity, aneffort launched in 2010 to reducepoverty by increasing investments inrural communities through outreachand stronger partnerships withcommunity leaders, businesses,foundations and other groups workingto combat poverty.

In total, Vilsack announced $22.3


million in loans and grants for REDLGprojects in 14 states.

Second Harvest opensdistribution center

Second Harvest of South Georgiarecently opened a 65,000-square-footregional distribution center inThomasville, Ga. Second Harvest is thestate’s largest rural food bank, serving30 Georgia counties. More than 90percent of its service area hasexperienced high poverty rates in recentyears.

The new distribution center wasfinanced through a $5.2-millionCommunity Facilities loan from USDA

Rural Development. The centerincludes a commercial kitchen and anindoor/outdoor marketplace. Thecenter also triples the organization’sstorage capacity to a total of 5 millionpounds of food.

Second Harvest is also positioningitself to become one of the country’smore than 300 food hubs, whichaggregate and distribute local foods. Asa food hub, Second Harvest will helpopen up new markets for farmers andincrease availability of local foods. Aweekend farmers market will connectfarmers directly to consumers, who can

buy fresh, local produce on site. Second Harvest’s farmers market will

join 4,000 others nationwide that acceptSNAP (Supplemental NutritionAssistance Program benefits, formerlycalled food stamps).

Education is key to Second Harvest’sefforts. Children and adults can “gettheir hands dirty” learning aboutgardening at its onsite “food forest.”Nutrition classes will teach kids aboutthe importance of fruits and vegetablesfor a healthy diet.

Food banks that provide marketingassistance, storage, aggregation anddistribution services are popping up allover the country, says Elanor Starmer,

senior advisor to Secretary TomVilsackfor local and regional food systems. Shecites New York’s Foodlink and FoodBank of North Alabama as examples ofoperations that are integrating localfood into their service programs andproduct mix.

“Turning food pantries into localfood hubs is a win-win for producersand consumers and is helping rebuildlocal economies,” Starmer adds. Tolearn more about USDA programs forfood banks, visit: www.usda.gov andenter “Know Your Farmer” in thesearch box.

Iowa co-op producingcellulosic ethanol

Quad County Corn Processors(QCCP), a farmer-owned cooperative,is now producing cellulosic ethanol atits plant in Galva, Iowa. An $8.5-million distillation unit is enabling theco-op to convert corn kernel fiber intocellulosic ethanol, in addition totraditional corn-starch ethanol,according to a report in the Sioux CityJournal.

The process, developed by the co-op, involves converting and processingmore from each kernel of corn, co-opCEO Delayne Johnson says. “Throughhard work and forward-thinking

innovation, we’re excited to be the firstcellulosic ethanol producers in Iowa,”Johnson said in a an announcementfrom the co-op. “Our Adding CellulosicEthanol (ACE) project will not onlyincrease our plant’s production capacityby 6 percent, but it will also continue toboost energy security and provideconsumers with more low-cost, cleanerburning ethanol without adding anyadditional corn to the productionprocess.”

The 35-million-gallon-per-year plantwill use the corn kernel fiber to producean additional 2 million gallons of

Second Harvest’s new, 65,000-square-foot regional food distribution center in Thomasville, Ga., benefitted from $5.2 million in funding from USDA Rural Development.

cellulosic ethanol without having toincrease the amount of corn it buys.

The co-op’s roots go back to 2000,when six northwest Iowa producersformed Quad County Corn Processorsand signed an option to buy 102 acresof land south of Galva. They startedfundraising to build an 18-million-gallon ethanol plant. In just six weeks,more than 420 Iowa farmers invested inthis value-added project.

In February 2002, the first load ofethanol was transported out of the plantby truck. Thirteen years later, QCCPemploys 35 people who operate theplant 24 hours a day, producing up to100,000 gallons of ethanol daily.

USDA funding supportsbioenergy research

Agriculture Secretary Tom Vilsack inJune announced up to $14.5 million infunding for two USDA bioenergyprograms, made available through the2014 Farm Bill. USDA RuralDevelopment announced that it isaccepting applications from companiesseeking to offset the costs associatedwith converting fossil fuel systems torenewable biomass fuel systems.USDA’s National Institute of Food andAgriculture (NIFA) announced theavailability of $2.5 million in grants toenhance national energy securitythrough the development of bio-based

transportation fuels, bio-power and newbio-based products.

At the same time, USDA alsoannounced a valuable new aid for bio-energy businesses: the BioeconomyTool Shed. The Tool Shed is a portaloffering users access to a complementof web-based tools and information,statistical data and other resourcesrelated to the sustainable productionand conversion of biomass intoproducts and fuel, a process oftenreferred to as the bioeconomy.

USDA plans to make up to $12million in payments for eligible bio-refineries through Rural Development’sRepowering Assistance Program, which


The Cooperative Development Foundation (CDF) recently inducted a new group of “co-op heroes” into the CooperativeHall of Fame. The 2014 inductees are (from left): Papa Sene, who helped spread co-op values globally during his threedecades as senior technical advisor for NCBA/CLUSA; Harriet May, who led the effort to make home ownership moreaffordable for lower income and minority people as leader of the Government Employees Credit Union in El Paso, Texas;Martin Lowery, executive vice president of external affairs for the National Rural Electric Cooperative Assoc., who hasbeen a strong advocate of the co-op business model for more than 30 years; and Barry Silver, executive vice president ofNational Co-op Bank, who for 33 years has helped thousands of co-ops secure financing. For more information aboutthese and past inductees, visit: www.heroes.coop. Photo courtesy CDF

Hall of Fame, Class of 2014


was reauthorized by the 2014 Farm Bill.Bio-refineries in existence on or beforeJune 18, 2008, are eligible for paymentsto replace fossil fuels used to produceheat or power with renewable biomass.The deadline for applications isSeptember 15, 2014. For details on howto apply, see page 34,280 of the June 16Federal Register.

USDA is also seeking applicationsfor NIFA’s Sun Grants program thatencourages bioenergy and biomassresearch collaboration betweengovernment agencies, land-grantcolleges and universities and the privatesector. The program provides grants tofive grant centers and one sub-center,which then will make competitivegrants to projects that contribute toresearch, education and outreach forthe regional production andsustainability of possible bio-basedfeedstocks. The project period will notexceed five years.

Nebraska co-ops to merge The boards of Central Valley Ag

Cooperative (CVA) and United FarmersCooperative (UFC) met July 1 to ratify

votes cast by their respective member-owners, approving the merger of thetwo co-ops, effective Sept. 1, 2014. In ajoint announcement, the two co-opssaid the vote was “overwhelmingly infavor” of the merger. Nebraska lawrequires two-thirds of the votes to becast in favor of such a proposal in orderto be ratified.

The unified cooperative will retainthe Central Valley Ag name and will beheadquartered in York, Neb., with Carl

B. Dickinson serving as CEO. CVA hadsales of $687 million in fiscal year 2013with a local net profit of $13.5 million.UFC had sales of $709 million in fiscal2013, with a local net profit of $9.8million. The combined co-op wouldhave ranked as the 21st largest ag co-opin the nation in 2013.

The new CVA will consist of 66locations across eastern Nebraska andnorthern Kansas with more than 800employees. The cooperative offers awide range of products, services,information and innovation through itsagronomy, energy, feed and graindivisions.

“I am very pleased that the patronsof both cooperatives entrusted thevision and due diligence of their boardmembers and leadership teams toapprove their recommendation tomerge two strong cooperatives focusedon creating value for our customers,”says Dickinson. “The new CVA willprovide the opportunity for expandedservices and facilities, increased savingsand accelerated equity redemptions forthe benefit of our member-owners. Wealso expect to be able to attract and

retain the best employees.”Initial merger discussions between

the co-ops began in early 2013, with therespective boards meeting in March2014 to unanimously approve themerger plan that was later put to a voteby the members.

Doug Derscheid, current CEO ofCVA, says that in his 44 years ofcooperative employment, including 38in CEO positions, he has witnessedmany mergers and acquisitions. “But

this one is undoubtedly the very best, inevery measurement. Very exciting timesare in our future.”

CVA was formed in 2003 by thecombination of Agland Co-op ofOakland, Central Farmers Cooperativeof O’Neill, and Tri Valley Cooperativeof St. Edward. CVA merged withNortheast Cooperative in 2005, addingnine locations, and later that yearpurchased the assets of PrecisionAgronomy LLC and continued businessthrough their seven locations.

UFC was created in 2001 from themerger of United Co-op Inc. ofHampton, Farmers CooperativeAssociation of York, and Farmers Co-opBusiness Association of Shelby. In 2005,UFC acquired the Greenleaf, Haddam,Linn, and Washington locations inKansas, with a number of otheracquisitions being made prior to thecurrent merger.

Policinski honored as ‘Master Entrepreneur’

Land O’Lakes Inc. President andCEO Chris Policinski was named the2014 Master Entrepreneur of the Yearin the Upper Midwest by Ernst &Young (EY). EY says the prestigiousaward honors business leaders in 145cities across 60 different countriesaround the world.

EY says this is its 28th year of“recognizing inspiring people and theircontributions, specifically innovativeentrepreneurs who show success infinancial performance and personalcommitment to their businesses andsurrounding communities.”

“It’s a great honor to accept thisaward, but the true champion ofentrepreneurship at Land O’Lakes isour dedicated workforce, whocontribute their efforts each day tobring our vision to reality,” saysPolicinski. “Their innovative thinkingdrives great work that is helping to feeda growing global population and positivelyimpacting the world in many ways.”

The Upper Midwest region of theprogram encompasses businesses basedin Minnesota, the Dakotas, Iowa andNebraska. ■

The East Hub facility of Nebraska’s Central Valley Ag Cooperative (CVA), which will merge withUnited Farmers Cooperative, effective Sept. 1. The merged co-op would have ranked as thenation’s 21st largest ag co-op last year. Photo courtesy CVA


of how its famous brand would be usedin marketing foreign oranges.

Sunkist’s adoption of offshoresourcing is an example of howcooperative leadership can achieve amember consensus. The process wasaptly described as: “The changes beingmade at Sunkist are evolutionary, notrevolutionary” (Smith).

Adopting policies for tradingforeign-sourced commodities is anexample of how agriculturalcooperatives gradually develop amember consensus. Although foreigntrade is a particular issue that mostcooperatives do not confront, itdemonstrates a process of leadership inworking with members that isapplicable to many issues.

Building consensusCooperative leadership involves

effective communication with aninformed membership. Members areneither followers nor obstructionists.

They are an important part of decision-making in that they must understandhow the cooperative operates and whyit has to address changes in its industry.

While the manager needs foresight

to identify impending changes, thedirectors work to make such strategicchanges appropriate for the cooperativeand understood by members. Leading acooperative is a multi-facetedenterprise, and successful leadership isusually not the exclusive

accomplishment of one person.Consensus is often regarded as the

prevailing view of a group. In acooperative, consensus provides thecohesiveness for members to want tocontinue their membership. At anypoint in time, a member consensus maynot reflect what a cooperative needs todo for economic survival. Whenmanagement and directors see a needfor change, an important part of theirleadership is building a consensus formajor decisions to be made. ■

References• Dusek, Rick, (2013) Harvesting Global Grain

Opportunity, Presentation at USDA AgriculturalOutlook Forum, February 22.

• Hoyt, Ann (1995) “Creating Boards ThatLead,” The Cooperative Grocer, June-July.

• Reynolds, Bruce (1980) Producers ExportCompany: The Beginnings of Cooperative GrainExporting, USDA/ESCS/Farmer CooperativeResearch Report 15.

• Smith, Claire (2003) “New global strategy—Year-round citrus demand has Sunkist tappingforeign market supplies,” Rural Cooperatives,September-October.

• Thurston, Stanley K., et al (1976) Improving theExport Capability of Grain Cooperatives,USDA/Farmer Cooperative Research Report34.

• Wadsworth, James (2014) “A Two-Way Street:Members must fulfill responsibilities to theirco-op,” Rural Cooperatives, July –August.

Directors needthe skill to use member

input to improve decision-making, while preventing

diverse views frombecoming a source of

divisiveness.

the northeast Ohio region, he added,citing “The 25 Percent Shift,” a reportposted at www.neofoodweb.org.

In addition to supplying freshproduce, meat, cheese, eggs and avariety of value-added products tofamilies, restaurants and otherbusinesses, the co-op is participating ina farm-to-school program that includes12 schools districts. The next step inexpanding institutional buyer networks,according to Melissa Miller, Lake-to-River marketing manager, is aworkplace wellness initiative where alocal autoworkers union will cooperatein launching a healthy food box initia-tive that includes on-site delivery fromthe Online Ordering System of L2R.

The co-op has also worked to createa corner store initiative throughcollaborations with three retail foodstores located in “food deserts” withinthe co-op’s market area and has learnedthe many challenges to improving low-income household purchasing anddietary habits.

The institutional sales effort includesa partnership with the Sisters ofHumility of Mary Health System,where in-hospital farmers’ markets arepart of a Healthy Food Rx program,which helps finance food purchases forobese and diabetic patients. TheHumility of Mary order also owns aconvent farm.

The Villa Maria convent iscelebrating its 150th anniversary thissummer. The Sisters of the Humility ofMary oversees 726 acres in westernPennsylvania, including a 280-acre

farm. The Villa Maria convent is amember of the Lake-to-River Food Co-op. As much as 50 percent of theproduce grown on the farm is given tothe less advantaged through local foodbanks, shelters and parishes.

The farm also grows grain and hayand operates a community-supportedagriculture service, which has a waitinglist at present. It also operates an on-farm market, maintains a herd of beefcattle (all feed is grown on the farm),has a small flock of sheep and operates alarge, year-around greenhouse. Landmanagement at the farm “is based onspirituality, sustainability, simplicity andthe preservation of all local life systems.”

It is farms such as this that arehelping Lake-to-River Co-op rebuild“an abundant local food source withnew, old, urban and rural co-ops,”Converse said. ■

The Privileges of Membershipcontinued from page 13

Co-ops: leadership with adifferencecontinued from page 9

42 January/February 2014 / Rural Cooperatives

Rural Cooperatives / January/February 2014 43

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