Interested in Forming a Cooperative? Take the Cooperative Challenge!

There are many good reasons for starting a Cooperative, such as collaborative marketing, processing, distribution, or administration.  And there are many different goals for cooperatives to pursue, such as enhancing local food systems, increasing resources and funding, and even sharing philanthropic or community development goals. With all the potential cooperative purposes and goals, how does a group of individuals start the conversation about how they would like to form their cooperative?  

One way is to start with a set of proposed by-laws formed by a similar cooperative and have this new group of individuals voice their desires on how they would edit them to fit their situation. This method is suitable, especially if coordinated with an experienced cooperative development professional (these people are typically located at land grant colleges and cooperative development centers in each state). 

There is one potential drawback to the face-to-face development scenario, and that is ensuring that all members have voiced their concerns.  To this end, the South Carolina Center for Cooperative Development developed an online cooperative development tool called “The Cooperative Challenge.” A link to this survey is located here

Participants can take this challenge to see how they will work together; the best part is that it is anonymous and involves a hypothetical cooperative, not their specific cooperative.  Producers can voice their concerns without being singled out.  To date, this tool has been used with three groups to help them discuss the more difficult cooperative development topics.  Some of the most controversial questions are:

  • Patronage dividends: how much will be distributed versus retained by the cooperative?
  • Capitalization: how much debt versus equity contributed by members?
  • How restrictive should the cooperative be with members selling outside the cooperative?
  • How does a new member join the cooperative, and how does a member leave the cooperative?
  • Should the cooperative accept products from non-members to fulfill contractual obligations?
  • What measures should be taken if a member does not follow the rules, such as selling outside the cooperative or not delivering acceptable produce?
  • How much should the cooperative pay a general manager, and what benefits are provided?

The survey findings will be analyzed within the next year to see how different groups responded to the same questions. It will be interesting to note if there are differences in the concerns of conventional farmers versus niche-product farmers, new farmers versus established farmers, and those relating to different product types (i.e., organic produce). In the meantime, this survey tool is available for interested producer groups and cooperative extensions.  Also, if needed, a QR code is available so that this survey can be taken using a mobile phone.  

Richards, Steven. “Interested in Forming a Cooperative? Take the Cooperative Challenge!” Southern Ag Today 3(22.5). June 2, 2023. Permalink

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