1. NEFU & Food System Co-operative Development
New England Farmers Union
7th Annual Convention
3rd Dec 2016 // Windsor, CT

2. Presenters Erbin Crowell Roger Noonan
Vice President, New England Farmers Union
Executive Director, Neighboring Food Co-op Association
Board Member, National Co-operative Business Association
Adjunct, UMASS Amherst
President, New England Farmers Union
Organic Farmer, Middle Branch Farm
Member, Local Harvest CSA Co-op

3. Food System Co-operative Development
Co-operative enterprise is a powerful tool for farmers seeking more efficient operations and for communities seeking a more sustainable and resilient food system. What is a co-op? What are some examples from our region? What do co-ops contribute to business success for family farmers? What is NEFU doing?

4. Our Political Context
Co-ops are a successful, market-based solution for family farmers and fishermen, and their communities — a self-help alternative to both a corporate food system and ongoing dependence on government intervention and charitable support.
Legacy of government programs supporting co-operatives as a tool for economic development.

5. Outline What is a Co-operative? Why Do Co-ops Matter? Case Studies
NEFU Co-op Manual
How NEFU Can Help
Discussion & Ideas

6. New England Farmers Union
NEFU is a six-state membership organization that advocates for federal policy that benefits family farmers. We are a chapter of National Farmers Union, the second-largest agriculture organization in the country. Co-operative development has been a priority for Farmers Union since its founding in

7. NFU Co-operative Heritage
Officially known as the “Farmers' Educational and Cooperative Union of America” (1902)
Key role in passage of Capper Volstead Act in 1922 & Cooperative Marketing Act of 1926
Founded Farmers Union Central Exchange in 1931; merged with Harvest States Co-operative to form CHS:
Largest US-based co-op by revenue (2012)
69th on Fortune 500 list by revenue (2012)
25th largest convenience store chain in US

8. Neighboring Food Co-op Association
NFCA is a network of over 35 food co-ops and start-ups in the Northeast that are working toward a shared vision of a thriving regional economy, rooted in a healthy, sustainable food system, and a vibrant community of co-operative enterprise. As an affiliate member of NEFU, the NFCA partners with our region’s family farmers and fishermen to support a more sustainable food system, grow co-operative enterprise and influence food policy.

9. 2. What is a Co-operative?
“A co-operative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.” International Co-operative Alliance

10. Another way of saying it…
“Co-ops are producer- and user-owned businesses that are controlled by — and operate for the benefit of — their members, rather than outside investors.” United States Department of Agriculture

11. In Other Words…
A co-op is a business that is equitably owned and democratically controlled by its members who use it to accomplish a shared goal or purpose. At cost operation: Any surplus (profit) after expenses is distributed among members in proportion to their use of the business (purchases, labor, or supply), as a discount on purchases, or is reinvested in the enterprise for the mutual benefit of members.

12. Willimantic Food Co-op Annual Meeting 2016
A Proven Model
“What was the motivation of the Rochdale Pioneers, who codified the values and principles on which the co-operative movement has based since 1844?
We know it today as food security.”
Pauline Green, Former President
International Co-operative Alliance
Communities started food co-ops in response to expensive, poor quality food and the desire to have more control over their economic lives.
The Rochdale Pioneer’s goal was to create an integrated co-operative business that enabled communities to provide for themselves through the ownership and control of businesses.
The effort began with a store, because there was a need for affordable, unadulterated, healthy food. But they also knew that the store would provide the development of community capital. They also knew that if you owned the store, you controlled what the store sold—and what the store purchased and distributed.
The store’s purchasing power was leveraged for co-operative development: when the retail stores needed a source for pure, unadulterated flour, a co-op flour mill was established, and shares were sold in a co-op owned farm to provide healthy food.
Willimantic Food Co-op Annual Meeting 2016

13. A Flexible Model
Purchase needed inputs, equipment, products or services as a group.
Produce a product or service together.
Process and add value to raw materials produced by members.
Market products produced by members or by the co-op.
Provide employment and a livelihood.

14. Broad Food System Impact
Farmer-owned co-ops help members market and process their crops and livestock, and secure needed supplies and services.
Rural utility co-ops provide electrical power and telecommunications services.
Financial co-ops and credit unions provide credit and financial services.
Food co-ops provide groceries for members and a retail outlet for local producers, etc.

15. A Basic Co-op Structure
MEMBERS
Elect
BOARD OF DIRECTORS
Worker Co-op
Hire
Producer or
Consumer Co-op
MANAGEMENT
Hire
EMPLOYEES
A Multistakeholder Co-op includes a combination of member types in ownership and governance.
Collectives
Flatten layers,
and emphasize
consensus decision-making.
Product or Service
PRODUCERS OR CONSUMERS

16. 2. Why Do Co-operatives Matter?
Co-ops are more common than we think…
1 billion members worldwide (1 in 3 in the US)
More people than directly own corporate stock
Majority of US farmers are co-op members
…are innovative
Regional aggregation and distribution, healthy food, organic agriculture, Fair Trade, relocalization
…are successful
30,000 co-ops in all sectors of US economy

17. Co-operatives… …are resilient
Co-ops tend to outlive other business models.
Because they are longer lived, they contribute to more stable local food systems, infrastructure, and employment over time.
Ag co-op sector has seen record revenue and income almost every year since 2008.

18. United Nations Year of Co-ops (2012)
Co-ops “in their various forms, promote the fullest possible participation in the economic and social development of all people, including women, youth, older persons, persons with disabilities and indigenous peoples, are becoming a major factor of economic and social development and contribute to the eradication of poverty.”

19. UN Year of Family Farming (2014)
“The importance of agricultural co-operatives in improving the lives of millions of smallholder farmers and their families cannot be overstated.”

20. UN Sustainable Development Goals (2016)
“Co-operatives contribute to food security by helping small farmers, fisher folk, livestock keepers, forest holders and other producers to solve numerous challenges that confront them in their endeavours to produce food.”
International Labour Organization (2016)

21. The Co-operative Advantage for Producers
Achieve scale while maintaining small family ownership and operation
Strengthen bargaining power of small producers
Producers can specialize, increase efficiency
Enable members to focus on core business and delegate services without giving up control
Root shared infrastructure in our region (aggregation, processing, marketing, retail, etc.)
Plus, consumers like co-ops!

22. 3. Case Studies Production & Aggregation Processing & Marketing
Retailing & Consumption

23. Organic Valley CROPP Co-operative
Founded 1985 as produce co-op
1,800 members in US, Canada & Australia
Dairy, eggs, soy, produce, feed, & meat
Avg dairy herd is 80
13% of US organic farmers are members
9% of US organic farmland
Avg member 49 (US: 57)
$1 billion in revenue

24. 493 Northeast farm families Dairy Pool Beef Pool Egg Pool Produce Pool34 4 2
VERMONT
MAINE 9
121 3 30 23
NEW HAMPSHIRE
493
Northeast
135 1 2 1
farm families
NEW YORK 1 1 11 1
154 3 3
Dairy Pool
Beef Pool
Egg Pool
Produce Pool
Grower Pool
NEW
JERSEY
PENNSYLVANIA
MARYLAND 4 1 13
WEST
VIRGINIA
VIRGINIA

25. 26 Years of Sustainable Farmer Pay
Midwest Mailbox Dairy Pay Price
THESE ARE DAIRY PAY PRICES to demonstrate the trend of how OV pay prices are 1) consistently much higher than conventional pay prices, and 2) consistently rising.
The dip in the middle was in due to the recession, but OV still maintained its commitment to paying farmers higher than conventional and a stable price that did not fluctuate despite the country’s economic situation. When conventional farmers had to ensure a severe pay price drop, OV farmers only had a slight decrease.
“Mailbox” price is the base pay price voted on by the farmer board of directors each year PLUS any bonuses (premiums) farmers received to reward them for producing high quality milk (as opposed to penalizing for low quality).
The Midwest base price without butterfat or quality premiums was approximately $26.55 in Since the average mailbox pay price is nearly $3 higher than the base pay price, clearly Organic Valley dairy farmers produce the highest quality milk!
Conventional prices based on annual FMMO average blend price and 2013 estimate.
CONVENTIONAL
DAIRY PAY PRICE
Graphic thanks to Organic Valley

26. Agri-Mark / Cabot
Founded 1916 (New England Milk Producers Association)
1980 Merged with Cabot Creamery Co-op
2003 Merged with Chateaugay Co-operative
1,200 Member Farmers in New England & NY
300 Million Gallons of milk annually

27. Farm Credit System 1916: Federal Land Bank System
1923: Agricultural Credits Act
1971: Full Borrower Ownership
$235B in Loans, Leases, & Related Services
500,000 Borrower Members

28. Deep Root Organic Co-op
Founded 1986
22 members in VT & Québec
85-100,000 cases of produce annually
±$2.5 million revenue
Distribution Eastern US
Support specialization, reduce competition, access markets
A food hub before there were food hubs

29. North Country Farmers Co-op
Began organizing 2008
Over 20 members in northern NH
Direct distribution to 15 restaurants, schools, individuals, and a hospital
Reduce competition among members, increase collaboration in reaching markets, support specialization
Producer owned food hub

30. Local Harvest CSA Co-op
Established 2002
Six NH member organic farms
Three season CSA
Members coordinate production, enabling specialization while offering broad range of produce to customers

31. Real Pickles Sole proprietorship, 2001
Naturally fermented foods (pickles, sauerkraut, etc.)
Conversion to Worker co-op, 2013
5 founding members, including original owners
$500k outside investment
$1 million revenue (2015)
Preservation of mission, local ownership and control, retention of staff

32. Willimantic Food Co-op
Willimantic, CT
1980: 2 Buying Clubs
1991: Downtown Storefront
2006: Expansion
2015:
5,400 Members
$4.7M in Revenue
$557K in Local Purchases
Exploring Expansion

33. Neighboring Food Co-op Association
2015
25 food co-ops
11 start-ups
107,000+ members
1,800+ staff
$41.5M+ wages
$260M+ revenue
$50M+ local products

34. The Food Co-op Difference
Compared to conventional (private, investor owned) stores, co-ops work with substantially more local farmers and producers, sell more local products, devote more of their total income to charitable donations, and spend more revenue locally, in their communities.
*This data is from a study, Healthy Foods Healthy Communities: The Social and Economic Impacts of Food Co-ops, quantifying the impact food co-ops have as compared to conventional grocery stores. It was commissioned by National Cooperative Grocers Association (NCGA), a national organization of grocery cooperatives.
Source: Healthy Foods Healthy Communities: The Social and Economic Impacts of Food Co-ops, 2012, NCGA: strongertogether.coop
Willimantic Food Co-op Annual Meeting 2016

35. The Food Co-op Difference
Co-ops sell substantially more organically grown foods, pay their employees more, including offering more benefits, and spend more on local wages and benefits compared to conventional grocery stores.
*This data is from a study, Healthy Foods Healthy Communities: The Social and Economic Impacts of Food Co-ops, quantifying the impact food co-ops have as compared to conventional grocery stores. It was commissioned by National Cooperative Grocers Association (NCGA), a national organization of grocery cooperatives.
Source: Healthy Foods Healthy Communities: The Social and Economic Impacts of Food Co-ops, 2012, NCGA: strongertogether.coop
Willimantic Food Co-op Annual Meeting 2016

36. Source: http://reic.uwcc.wisc.edu/
Co-ops in New England
1,400 businesses
Farmer co-ops, food co-ops, worker co-ops, credit unions, Farm Credit, etc.
Locally owned by 5 million members
Earn $9 billion in annual revenue
Employ 22,000 people
Pay $1 billion in wages
Source:

37. 4. NEFU Co-op Manual Co-op Manual for Co-op Development: Co-op History
Role of NFU
Examples & Types
Guidance for Start-Up
Ongoing Governance
Available Online

38. Co-operative Statutes
CT: Conn. Gen. Stat
Co-operative Associations
Co-operative Marketing Associations
Workers Co-operatives
ME: 13 M.R.S. 1501
Consumer Co-operative
Agricultural Marketing & Bargaining Co-operative
Employee Co-operative Corporations

39. Co-operative Statutes
MA: ALM GL Ch. 157
Co-operative Corporations
Co-operatives without Stock
Employee Co-operative Corporations (157-A)
NH: RSA Title XXVII, Ch. 301
Co-operative Marketing & Rural Electrification Associations
Consumers Co-operative (Ch. 301-A)
RI: R.I. Gen Laws 7-7-1
Producers Co-operative
Consumers Co-operative
VT: 8 V.S.A
Marketing Co-operative
Worker Co-operative (Title 11, Ch. 8)

40. 5. How NEFU Can Help Educate Public & Policymakers
Defend Co-op Identity & Statutes
Advocate for Co-op Policy
Promote Co-op Model in Food System
Facilitate Access to Resources for…
Start-Up & Conversion, Addressing Food Security, Updating State Statutes, New Product Development, etc.

41. Opportunities for Co-ops in the Food System
PRODUCTION
AGGREGATION
PROCESSING
WASTE & NUTRIENT
MANAGEMENT
MARKETING
CONSUMPTION
DISTRIBUTION
Based on
Components of a Food System
(Nickerson, 2008)

42. Feeding the World Starts at Home
Continued support for Local and Regional Food Systems Development is infrastructure development that delivers the core tenets of sustainability.
Economic - Farm income and jobs
Environmental - incentivizes and supports on farm conservation practices
Social - Provides access to fresh produce for socially disadvantaged. Connects consumers to all of agriculture

43. Farm Bill Opportunities to support Co-operative Development
Title VI Rural Development
Programs Fostering rural economy and development
RBDG $65m annually
Value Added Producer Grants $63m + ($40 through approp.)
RCDG $40m annual approp.
IRP $25m annual approp.
RBIP $20m annual approp.

44. Farm Bill Opportunities to support Co-operative Development
Title V Credit
Authorizes USDA Credit and Rural Development Programs as well as a few “last resort” loan programs.
Farm Service Agency makes loans to Producer Co-ops
Direct Operating Loans
Micro-Loans
Farm Storage Facility
Packing sheds, cold storage
Trucks

45. Action Defend existing programs and funding Economic Development
Infrastructure Development
Tweak programs to increase usability for producer co-ops.
Reduce “Red Tape”

46. Why Co-operatives? Co-operative enterprises…
…enable family producers to achieve scale,
…improve market access for producers as a group,
…enable producers to focus on core business,
…prioritize service to members before profit,
…are democratic and accountable to members,
…root infrastructure in our region,
…are successful and long-lived,
…strengthen local economies,
…build more sustainable & resilient food systems.

47. Discussion
Questions
Feedback
Ideas

48. Resources & Contact Info
Erbin Crowell Neighboring Food Co-op Association Roger Noonan New England Farmers Union