New England Farmers Union is a strong supporter of co-op rights and the co-op movement.
History has shown co-operative enterprise is a powerful means by which people — and particularly family farmers and other producers — can further their own well-being in our market economy. As member-owned enterprises, co-operatives are rooted in the communities they serve, creating economic infrastructure that reaches across generations.
Co-operative enterprise has played a vital role in agriculture, aquaculture and other aspects of our regional economy. Today the New England Farmers Union is working in collaboration with producers, co-ops and other partners to take advantage of new opportunities to use this business model to create a stronger, more resilient food system in New England. See the links below for more information.
What is a Co-op?
The International Co-operative Alliance (ICA) defines a co-op as “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.”
In basic terms, a co-operative is a business that is owned and democratically governed by its members — the people who use the enterprise to obtain products, services, or employment. Rather than being based on the maximization of profit for owners or investors, a co-op is focused on meeting the needs and goals identified by members in accordance with internationally recognized principles and values.
Capital to operate the co-op usually comes from the members who purchase a share of common stock in the business and invest additional resources as needed. Additional outside capital can also come from lenders and sometimes from investors through the sale of preferred stock.
Co-ops operate at cost for the benefit of their members. Any profit or surplus is either reinvested in the enterprise, or is distributed back to members in proportion to their use of the co-op (patronage dividends or patronage refunds). Sometimes, a portion of patronage refunds is reinvested in the business, or held as capital by the co-op until the member leaves the co-op.
Co-operatives are based on the democratic principles that are at the heart of our country’s political system. Each member has one vote (in contrast to investor-owned corporations in which control of the business is determined by the number of shares owned). Members of the co-operative may decide to make certain decisions by majority vote, a super majority or even by consensus. Members usually elect a board of directors to hire staff and oversee day-to-day operations. When functioning well, this system ensures participation and a sense of ownership among members.
While this idea of democratic business may seem unusual, co-ops are actually quite common. A recent study by the University of Wisconsin found that there were more than 29,000 co-ops in the United States, where more than 1 in 4 people are co-op members. Another study by Co-operatives UK found that on a global level, more than 1 billion people belong to co-ops — more than directly own stock in corporations.
The United Nations (UN) has recognized the contribution of co-ops to socioeconomic development, poverty reduction and local employment, declaring 2012 the International Year of Co-operatives. More recently, the National Farmers Union (NFU) and the National Co-operative Business Association (NCBA) have supported the UN’s designation of 2014 as the International Year of Family Farmers, which highlights the role of co-operative enterprise in sustaining family farmers and producers on global level.
All of this attention on the co-op business model had encouraged the International Co-operative Alliance (ICA) to launch its vision for a “co-operative decade” in which co-ops become the fastest growing form of enterprise.
Co-ops In Our Food System
n addition to their advantages as member-owned, democratically controlled enterprises, co-ops are helping to create a more resilient food system, and are fostering local and regional economic development. As noted by the United Nations, co-operative businesses contribute to more stable local and regional economies through community ownership and control, the development of local skills and assets, and a focus on service and meeting member needs before maximization of profit.
NEFU emphasizes the unique benefits that co-operative enterprise offers to farmers, fishermen and other producers. NEFU also recognizes the important role of co-ops of all kinds across the economy. We support the development of co-operatives as a path to a more stable regional food system and economy, and work closely with co-ops and co-operative associations toward this end.
The Case for Co-ops
Co-operative enterprise has been particularly important to helping family farmers and fishermen to address some of their enduring challenges as well as opportunities in the marketplace. A majority of our country’s two million food producers are members of about 3,000 producer co-ops. Co-operatives come in many shapes and sizes, enabling family farmers to aggregate and collectively market their goods, buy goods and services, access equipment and land, and add value to their crops. By working together, small producers can take advantage of the benefits of scale without giving up local ownership and control, empowering them to compete more effectively in the marketplace.
New England Farmers Union and New England Farmers Union Educational Foundation (NEFU-EF) are engaged in several initiatives to support co-op development in our region. NEFU focuses on policy and advocacy, while NEFU-EF supports the development of educational and technical resources related to co-operative development. Our major activities are:
In February, 2014, NEFU hosted the 2014 Co-op Convening. Policy makers and co-op leaders discussed the opportunities and obstacles facing co-ops in our region.
Since its founding in 1902, the National Farmers Union (NFU) has been an advocate of the co-operative model, supporting the development of farm, fishery and forestry co-ops as an effective means to increase producers’ bargaining power in the economy and food system. NEFU also encourages the promotion of co-operative enterprise as a way to secure for our region the infrastructure necessary for production, processing, marketing and distribution of food and other products.
NEFU’s co-op policy priorities
Neighboring Food Co-op Association (NFCA) Collaboration
In 2010, the Neighboring Food Co-operative Association (NFCA) joined NEFU as an affiliate member. This partnership promotes collaboration between consumers and producers in our regional food system, educates and engages consumers in agricultural policy, and reinforces each organization’s efforts to promote co-operatives. Learn more about the NEFU/NFCA collaboration.
Co-op members are engaged in policy, and co-op concerns are being heard in Washington, D.C. Co-op members attended a dairy policy tour with NFU’s chief lobbyist as well as a farm bill workshop led by NFU president Roger Johnson.
Group photo with Congresswoman Rosa DeLauroSeveral farmers that supply NFCA co-ops have attended the annual Legislative Fly-In in Washington, D.C., as has a consumer co-op member.
Healthy Food Access
Belfast_co-opA recent grant from Jane’s Trust to New England Farmers Union Education Foundation (NEFU EF) funds Food Co-ops and Healthy Food Access, a project to increase access to local, farm-fresh food by low-income communities. NEFU EF is working with Neighboring Food Co-op Association (NFCA) and the Co-operative Fund of New England (CFNE) to provide technical assistance to co-ops that are implementing or expanding their programs to improve healthy food access for underserved communities.
The project is under way, with increasing momentum. Receiving a grant from Jane’s Trust enables us and our partner organizations to further advance the impact of this collective work, with the goal of benefiting farmers, food co-ops, and under-served consumers: a win-win-win scenario!
Educational Resource Development
NEFU-EF, with support from several grant making organizations, is developing educational resources to support the success of co-operative businesses in our region.
College Conference on Cooperatives is an opportunity for students from across the nation to learn how cooperative businesses operate for the benefit of their customers. The annual event, hosted by National Farmers Union, focuses on how and why cooperatives succeed in America’s competitive business environment.
National Farmers Union has developed a Co-operatives Curriculum with resources for first grade through adult.
This is an exciting time for the co-operative movement, and particularly for New England’s agricultural, fishery and food co-ops. In the wake of the financial meltdown of 2008 and the resulting global recession, co-ops have been recognized for their resilience, preserving jobs and economic infrastructure, especially for rural communities. Across our region, people are working to rebuild local and regional food systems, and co-ops have a unique role to play.
If you are starting a co-op, or are working to strengthen an existing co-op, NEFU is here to help you.
NEFU’s Co-operative Manual
This manual is designed to inform readers of some of the technical aspects of co-operatives. Its focus on the process and legal structures is intended to provide easy access to the tools needed to get started and includes a review of the co-operative statutes in each New England state.
This report was made possible by financial support from the John Merck Foundation and a USDA Rural Business Enterprise Grant.
State-by-State Co-op Statutes
Each state has unique laws governing the establishment and operation of co-ops. NEFU’s co-op manual compares legal requirements by state for all of the New England states.
The United States Department of Agriculture also offers a lot of information on line that is particularly relevant to co-ops involved in the food system.
In 2010, the Neighboring Food Co-operative Association (NFCA) joined NEFU as an affiliate member. This partnership promotes collaboration between consumers and producers in our regional food system. Affecting policy change requires not only the producer, but also the consumer voice be heard. This partnership is an effective way to educate and engage the consumer voice in agricultural policy. The partnership also reinforces each organization’s efforts to promote co-operatives.
The NEFU/NFCA partnership has afforded many opportunities for food co-op members to deepen their understanding of agricultural policy issues. Whether a dairy policy tour with NFU’s chief lobbyist or a farm bill workshop led by NFU’s president, educational opportunities from this partnership are helping food co-op members become more informed.
Educational materials, distributed to consumers through NFCA co-op members, also serve to educate consumers. These include a poster showing “Farmers’ Share of the Retail Food Dollar” and a flyer showcasing the “Co-operative Enterprise.” NEFU contributes regularly to the NFCA newsletter, ensuring that the readers are up to date on pressing agricultural policy issues. In 2012, NEFU and NFCA collaborated to develop a curriculum on co-ops. Click to download the New England-focused “Co-operatives: The Business of Teamwork”.
In turn, the co-op concerns are being heard in Washington, D.C. Several farmers that supply NFCA co-ops have attended the annual Legislative Fly-In in Washington, D.C., as has a food co-op member. Support for the fly-in comes from NEFU, as well as from NFCA members who are encouraged to contribute to the “Send a Farmer to Washington” campaign.
The partnership increases general awareness of co-operatives through outreach, publications, and educational materials. We provided curriculum content on co-operative enterprise to colleges and universities in our region. An article on the partnership was published in the national food co-op magazine, Co-operative Grocer.