This presentation from the 2016 Northeast Organic Farming Association conference gives an overview of how the co-operative enterprise is a powerful tool for farmers seeking more efficient marketing and a more sustainable food system. It covers examples from our region, steps to establishing a co-op, advice for effective governance and collaboration, and opportunities to access grant resources to support your ideas. Presenters: Roger Noonan of New England Farmers Union (NEFU) and Erbin Crowell, Neighboring Food Co-op Association (NFCA).

1. Farmer Co-ops for
More Efficient Marketing
Northeast Organic Farming Association
Summer Conference // 13 Aug 2016
UMASS Amherst // Amherst, MA

2. Presenters
Roger Noonan
• President, New England
Farmers Union
• Organic Farmer, Middle
Branch Farm
• Member, Local Harvest
CSA Co-op
Erbin Crowell
• Vice President, New
England Farmers Union
• Executive Director,
Neighboring Food Co-op
Association
• Board Member, National
Co-operative Business
Association
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3. Farmer Co-ops for
More Efficient Marketing
Learn how co-operative enterprise is a
powerful tool for farmers seeking more
efficient marketing and a more sustainable
food system. We will explore examples from
our region, steps to establishing a co-op,
advice for effective governance and
collaboration, and opportunities to access
grant resources to support your ideas.
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4. Outline
1. Our Organizations
2. What is a Co-operative?
3. Examples
4. Guidelines for Launching a Co-op
5. Discussion & Ideas
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5. 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 1902.
www.newenglandfarmersunion.org
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6. NEFU 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
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7. Neighboring Food Co-op
Association
NFCA is a network of 35 food co-ops and start-ups in
New England that are working together 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 the
co-operative economy and influence food policy.
www.nfca.coop
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8. 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
www.ica.coop
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9. What is a Co-operative?
“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
www.usda.gov
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10. In Other Words…
A co-op is a business that is equitably owned
and democratically controlled by its members
for their common good, the good of the
community or to accomplish a shared goal or
purpose.
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.
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11. Co-operatives…
…are more common than
we think
• Majority of US farmers
are co-op members
• 1 billion members
worldwide (1 in 3 in the
US)
• More people are
members than directly
own stock in corporations
…are innovative
• Co-operatives are
pioneers in organic
agriculture, healthy food,
Fair Trade, relocalization,
regional aggregation and
distribution
…are successful
• 30,000 co-ops in all
sectors of US economy
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12. Co-operative Business
Principles
• Voluntary & Open Membership
• Democratic Member Control
• Member Economic Participation
• Autonomy & Independence
• Education, Training & Information
• Co-operation among Co-operatives
• Concern for Community
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13. 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.”
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14. 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.”
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15. 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)
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16. A Flexible Business 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.
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17. Co-op Sectors Benefit the
Regional Food System
• 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 community owned
retail outlets for producers, etc.
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18. Co-ops in New England
• 1,400 businesses
• Farmer co-ops, food co-
ops, worker co-ops, credit
unions, etc.
• Locally owned by 5
million members
• Earn $9 billion in annual
revenue
• Employ 22,000 people
• Pay $1 billion in wages
Source: http://reic.uwcc.wisc.edu/
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19. A Basic Co-op Structure
19
MEMBERS
BOARD OF DIRECTORS
EMPLOYEES
Elect
Hire
Hire
MANAGEMENT
Worker Co-op
PRODUCERS OR
CONSUMERS
Producer or
Consumer Co-op
Product or Service
A Multistakeholder Co-op
includes a combination of
member types in ownership
and governance.
Collectives
Flatten layers,
and emphasize
consensus decision-making.

20. 3. Case Study: Organic Valley /
CROPP Co-operative
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• Founded 1985
• 1,800 members in US,
Canada & Australia
• Dairy, eggs, soy,
produce, feed, and
meat
• Avg dairy herd is 80
• 13% of US organic
farmers are members

21. Dairy
Pool
Beef
Pool
Egg
Pool
Produce
Pool
Grower
Pool
493 Northeast
farm
families
13
4
2
34
11
1
1
1
3
4
9
23
135
30
1
1
2
3
121
154
3
1
NEW
YORK
PENNSYLVANIA
WEST
VIRGINIA
VIRGINIA
MARYLAND
NEW
JERSEY
MAINE
VERMONT
NEW
HAMPSHIRE

22. 26
Years
of
Sustainable
Farmer
Pay
Midwest
Mailbox
Dairy
Pay
Price
CONVENTIONAL
DAIRY
PAY
PRICE
Graphic thanks to Organic Valley

23. Case Study:
Deep Root Organic Co-op
• Founded 1986
• 22 members in VT &
Québec
• 85-100,000 cases of
produce annually
• ±$2.5 million ann rev
• Distribution across
Eastern US
• Support specialization,
reduce competition,
access markets
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24. Case Study:
North Country Farmers Co-op
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• 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

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

26. Opportunities in the Food
System
• Strengthen bargaining power of small producers in
the marketplace
• Achieve scale while and efficiency while
supporting small family operations
• Enable producers to specialize and increase
efficiency
• Farmer members can focus on core business and
delegate services without giving up control
• Root food system infrastructure in our region
• Increased recognition of social, economic and
environmental benefits of co-ops
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27. Challenges for Co-operative
Enterprise
• Democracy can be both an asset and
challenge to the business
• Limited business, legal and technical
support for co-ops
• Lenders may be unfamiliar with model
• Balancing individual and mutual interests
of members
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28. Some Suggestions
• Before launching a new co-op, explore
whether an existing co-op can meet your
needs.
• Is there an existing business that could be
converted to a co-operative? For example, a
farmer interested in sharing infrastructure or
an owner interested in retiring?
• If a new co-operative is the answer,
collaborate with existing co-ops and learn
from their experiences.
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29. Launching a Co-operative
Activities:
• Define overall purpose or goal
• Create steering committee
• Raise pre-development funds
• Hire a coordinator, if possible
• Conduct feasibility study
• Establish the founding board
• Incorporate using appropriate co-op statute
• Adopt by-laws
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30. Launching a Co-operative
Activities, continued:
• Develop a business plan
• Create membership agreements
• Recruit members and equity investment
• Access necessary debt financing
• Hire appropriate management
• Open for business
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31. Basic Development Process
Timeline
• Allow for 12-18 months to incorporate (varies widely!)
• Open doors – 2 to 10 years
• Existing facility or business can be faster
Resources Needed
• Committed, visionary leadership
• Co-op business, legal, and financial support
• Member equity investment
• Start-up financing
• Support & guidance from other co-ops
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32. Co-operative Statutes
CT: Conn. Gen. Stat. 33-183
• Co-operative Associations
• Co-operative Marketing
Associations
• Workers Co-operatives
ME: 13 M.R.S. 1501
• Consumer co-op
• Agricultural Marketing &
Bargaining Co-operative
• Employee Co-operative
Corporations
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Growing a Food System
for the Future:
a manual for co-operative
enterprise development
Six States with One Voice at the National Table

33. 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)
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RI: R.I. Gen Laws 7-7-1
• Producers Co-operative
• Consumers Co-operative
VT: 8 V.S.A. 31101
• Marketing Co-operative
• Consumers Co-operative
• Worker Co-operative (Title
11, Ch. 8)
Other Options
• Incorporate in a neighboring
state using appropriate co-
operative statute

34. Concerns for Co-operators
• Engagement of members
• Encourage and develop broad leadership
• Ongoing training in:
– Co-operative values & principles
– Board leadership & accountability to members
– Fiscal oversight
– Project & strategic planning
– Communication, facilitation, conflict resolution
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35. Some Guidelines for Success
• Support strong, committed member leadership
• Set realistic goals and focus on them
• Base decisions on concrete market research and
business planning
• Invest in member education and keep members
informed, engaged and involved
• Use technical assistance from co-op networks and
reputable co-op developers
• Join regional networks (such as NEFU) and seek
out peer support from other co-operatives
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36. Why Co-operatives?
Co-operative enterprises…
• …enable small producers to achieve scale,
• …improve market access for multiple producers,
• …enable members to focus on core business,
• …prioritize service to members before profit,
• …root infrastructure in our region,
• …strengthen local economies,
• …are more sustainable and resilient,
• …are democratic and accountable to members,
• …build a more sustainable food system.
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37. Discussion
• Questions
• Feedback
• Ideas for Future Workshops
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38. Resources & Contact Info
Roger Noonan
president@newenglandfarmersunion.org
Erbin Crowell
erbin@nfca.coop
New England Farmers Union
www.newenglandfarmersunion.org
Neighboring Food Co-op Association
www.nfca.coop
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