Rural COOPE

July / August 2014

RATIVES

What

We’ve Learned

So Far

Page 14
2 July/August 2014 / Rural Cooperatives

By Elanor Starmer 

Editor’s note: Starmer is senior advisor to Agriculture Secretary

Tom Vilsack on local and regional food systems. 

Agriculture Secretary Tom Vilsack in May

announced a historic level of funding

available for local and regional food: $78

million. This funding includes $48 million

available through USDA’s Business and

Industry Loan Guarantee Program and $30 million available

through the newly expanded Farmers Market and Local Food

Promotion Program. 

The 2014 Farm Bill gave USDA these and other tools and

resources, expanding our ability to

connect rural and urban

communities, increase access to

healthy foods and to support rural

economies through local food

systems. Farmer cooperatives are

eligible for these programs, and

many co-ops have received funds

under them. 

Since 2009, the Farmers Market

Promotion Program (FMPP) —

now expanded into the Farmers

Market and Local Food Promotion

Program — has funded more than

450 projects. Penn’s Corner Farm

Alliance is an example of a co-op

that is using the FMPP program. 

A farmer-owned cooperative of

30 farms in southwestern

Pennsylvania, Penn’s Corner Farm

Alliance used the funds to make

infrastructure upgrades to its

cooperative market, including new refrigerated storage and

trucks. The Alliance, which serves three dozen restaurants

and more than 700 community supported agriculture (CSA)

members in Pittsburgh, has seen its business grow 12-fold in

the past five years. The co-op’s farmers use sustainable

farming practices, and many of them grow organically, producing

a 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 equal

partners. Fostering this type of rural-urban connection and

mutual opportunity through local food systems is a

cornerstone of USDA’s work.

With expanded authority and funding through the 2014

Farm Bill, the Farmers Market and Local Foods Promotion

Program has the potential to help establish more

cooperatives and other businesses across the country that are

helping to meet the demand for local foods. The goals of

FMPP grants are to increase domestic consumption of, and

access to, locally and regionally produced agricultural

products. 

The maximum amount awarded for any one proposal

cannot exceed $100,000; the minimum award is $15,000. The

program supports new market opportunities for farm and

ranch operations serving local markets. Farmers markets,

roadside stands, communitysupported agriculture programs,

agri-tourism activities and other

direct producer-to-consumer market

opportunities can benefit from the

program. 

Information about how to apply

is available at: www.ams.usda.gov. 

USDA’s Business and Industry

Guaranteed Loan (B&I) Program

can be used to support a wide range

of rural businesses. The Cellars at

Jasper Hill in rural Greensboro, Vt.,

was able to expand its dairy facility,

grow its business and reach new

markets using the B&I program. 

The owners, the Kehler brothers,

took their passion for dairy and

founded a cheese-making operation

10 years ago. Partnering with

Vermont’s Community National

Bank, USDA’s B&I program helped

the company construct a 22,000-square-foot facility and

expand its on-farm value-added cheese production. The

project helped save 20 existing jobs and created 14 new ones

in a town with fewer than 1,000 residents. 

The B&I program is available on a rolling basis

throughout the year and can finance local food enterprises in

both rural and urban communities. To learn more, contact

your local USDA Rural Development office, which you can

reach, 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 organic

in 1992 and has since provided the Pittsburgh area

with high-quality, local fruits and vegetables, meats

and eggs. The farm joined the Penn’s Corner co-op in

2013. 
Features

Rural Cooperatives / July/August 2014 3

Volume 81, Number 4

July/August 2014

Rural Cooperatives (1088-8845) is

published bimonthly by USDA Rural

Development, 1400 Independence Ave.

SW, Stop 0705, Washington, DC. 20250-

0705.

The Secretary of Agriculture has

determined that publication of this

periodical is necessary in the transaction

of public business required by law of the

Department. Periodicals postage paid at

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offices. Copies may be obtained from the

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Government Printing Office, Washington,

DC, 20402, at $23 per year. Postmaster:

send address change to: Rural

Cooperatives, USDA/RBS, Stop 3255,

Wash., DC 20250-3255.

Mention in Rural Cooperatives of

company and brand names does not

signify endorsement over other

companies’ products and services.

Unless otherwise stated, articles in this

publication are not copyrighted and may

be reprinted freely. Any opinions expressed are those of the writers, and do not

necessarily reflect those of USDA or its

employees.

The U.S. Department of Agriculture

(USDA) prohibits discrimination in all its

programs and activities on the basis of

race, color, national origin, age, disability, and where applicable, sex, marital

status, familial status, parental status,

religion, sexual orientation, genetic

information, political beliefs, reprisal, or

because all or part of an individual’s

income is derived from any public

assistance program. (Not all prohibited

bases apply to all programs.) Persons

with disabilities who require alternative

means for communication of program

information (Braille, large print, audiotape,

etc.) should contact USDA’s TARGET

Center at (202) 720-2600 (voice and TDD).

To file a complaint of discrimination, write

to 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 provider

and 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:

coopinfo@wdc.usda.gov

This publication was printed with vegetable oil-based ink.

04 A Two-Way Street 

Members must fulfill responsibilities to their co-op

By James Wadsworth

8 Co-ops: leadership with a difference 

Consensus is the goal, but can be a long process

By Bruce J. Reynolds

10 The Privileges of Membership

Co-ops pursue wide range of ways to communicate the ‘co-op difference’

By Dan Campbell

14 What We’ve Learned So Far

Food 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 Piece

Why women farmers are key to global food security 

By Hannah Guedenet, Paul Guenette and Lydia Mbevi-Nderitu

30 Our first year as a co-op

Worker-owned food processor shares lessons learned since converting to a co-op 

By Kristin Howard 

Departments

02 COMMENTARY

20 CO-OP DEVELOPMENT ACTION

33 NEWSLINE 

p. 20

ON THE COVER: Food hub operators share their thoughts

about key issues, ranging from food safety to computer software,

that impact their business operations. See page 14. Here, Amy’s

Organic Garden owner Amy Hicks harvests greens at her farm in

Charles City, Va. Her farm participates with Fall Line Farms, a

local food cooperative in Richmond, Va. USDA photo by Lance

Cheung

p. 26 p. 33
4 July/August 2014 / Rural Cooperatives

A Two-Way Street

Members must fulfill

responsibilities

to their co-op

By James Wadsworth, Ag Economist

Cooperative Programs, USDA Rural Development

e-mail: james.wadsworth@wdc.usda.gov
Rural Cooperatives / July/August 2014 5

While a co-op must deliver quality

goods and services at a

competitive price to its members,

the members also have important

responsibilities toward their co-op to fulfill. For

a co-op to prosper, the members must know

and take these responsibilities seriously and

periodically review them. 

Member responsibilities begin at the

conception of the co-op and remain in place

throughout its existence. Members who are

active in their co-op are essential to ensuring

that sound governance, good management

and efficient operations are maintained. 

Co-op members must: 

◆ Understand the purpose of the cooperative

and 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 on

committees 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 cooperative

Members must fully understand what

their co-op is: its purpose, mission,

goals, operations, benefits, finances,

limitations, governance structure,

policies and what the organization may

look like in the future (based on

strategic plans). They should read the

articles of incorporation and bylaws to

understand how the co-op is set up to

function and its legal foundation. 

Members need to understand their

co-op’s operations and policies and how

they function within the framework of

state statutes and federal laws. Some of

these functions might include

established member obligations,

regulations, quality controls, equity

management and financial structure and

rules. 

Members need to understand the coop’s history as well as its mission, goals

and strategies for the future. It is up to

co-op leadership to provide clarity

regarding the co-op’s current status and

how the board intends to position it for

the future. Members who understand

their co-op’s strategic mission can make

wide use of it for their immediate

benefit as well as offer constructive

criticism or suggestions for its future.

Members should stay informed about

issues that may affect the co-op by

carefully reading all correspondence

from the board and management.

Know legal foundations

The co-op’s legal framework, as

established in the articles of

incorporation and bylaws, provide

members with the power to control the

“The co-op’s legal framework, as established in the articles of incorporation

and bylaws, provides members with the power to control the co-op.”
co-op. The board of directors and hired

management must abide by the

provisions in these documents.

Members also need to analyze proposed

bylaw amendments and determine how

they will affect the co-op before voting

to approve them. Members are

responsible for knowing the contents of

legally enforceable marketing contracts

or other legal papers the co-op may use

before signing them.

Take part in governance

Co-ops are deeply rooted in the

principles of democracy, and thus taking

an active part in co-op governance is a

vital responsibility for all members.

This means casting votes during

delegate and director elections, on

major co-op business decisions (for

example, expansion, contraction or

merger), and other matters brought to

the membership. At annual and other

membership meetings, members should

not hesitate to ask thoughtful questions. 

Although members delegate

governance authority to the board of

directors, they need to hold the board

accountable for its actions. This

includes obeying bylaws as well as local,

state, and federal laws. In addition to

participating in voting and meeting

activities, members should consider

taking a role in the co-op’s governance

body (i.e., director, delegate, committee

person).

Select and evaluate directors

Members also take part in the

democratic process in their co-op by

nominating, voting for and evaluating

directors. In considering attributes of a

potential director, members should look

for people who: are good

conversationalists and can clearly

express their views; are good listeners;

understand what it takes to run a

successful business; are able to analyze

complex business issues; are able to find

consensus and can compromise; and can

make difficult decisions based on what

is best for the co-op as a whole. 

Individuals who have been active in

other outside organizations or

associations may be a good fit, as those

experiences are often congruent with

being a co-op director. 

Provide necessary capital 

Having a financial stake in the co-op

is a key part of ownership. It’s a

responsibility that members must take

seriously and understand. Co-ops are

started with some type of initial

member investment — often for a share

6 July/August 2014 / Rural Cooperatives

Reach out with effective 

member relations

While members have responsibilities to fulfill in their co-op, the co-op

likewise has important responsibilities to members, including

maintaining excellent member relations. 

Effective member relations for a cooperative means that it must

reach out to members with news and messages about their co-op.

Providing members with information about important co-op services and

operations, as well as with continuing cooperative educational

information, 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 farms

when co-op field representatives visit, at co-op meetings, etc.; 

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

media; 

• Provide updates and other information by placing notes with billing or

payment 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 cooperative

business: what it is, what it does, how it benefits them and what their

responsibilities to the co-op are. They also need to be kept abreast of

the co-op’s initiatives, operations and promotions. Member

communications – when carried out on a regular basis –enhances and

keeps alive the co-op’s unique culture and strengthens the relationship

between members and their co-op. ■
of voting stock along with a direct

equity capital contribution. Once up

and running, members’ financial

commitment in their co-op must be

large enough to show continuing

concern about how their invested

money is managed. This also provides

motivation for them to accept all of

their membership responsibilities.

A desirable goal is for member

equity contributions to equal a majority

of the co-op’s total capital requirement.

A high level of member equity capital

provides for greater member control

and commitment. It also makes it easier

for the co-op to access debt capital. 

Members finance their co-ops in

three primary ways: direct investment,

retained margins and per-unit retains

(see USDA Cooperative Information

Report 55, Co-ops 101, for more

information 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-op

leaders to both opportunities and

problems that they see facing the co-op.

This helps leadership stay attuned to

member concerns so the board and

management are able to devote their

efforts to matters important to

members. Issues to bring to leadership

might arise from member-to-member

conversations, during co-op meetings,

during community meetings or just

from members learning of a situation or

market opportunity from media or in

their other community activities. 

Issues that are of a serious nature

should be brought to leadership as soon

as possible. Members should refrain

from bringing up petty issues unless

they seem to be growing into

something more serious.

Use the cooperative

Using the co-op is the easiest

responsibility for members to fulfill. By

using the co-op as much as they can,

members help the co-op directly

succeed in three important ways:

(1) A certain amount of business is

needed just to cover the cost of opening

the doors each day, including

maintaining buildings and equipment,

utilities and salaries. Greater volume

reduces these costs per unit of sales or

revenue. It also means facilities can

operate closer to capacity, equipment

and employees can be more productive

and the co-op is able to generate more

income above costs and return

patronage refunds to members at the

end of the co-op’s business year. 

(2) Using the co-op provides the

financing to keep it operating and

growing. Member financing is provided

on the basis of member use of the

cooperative.

(3) Using the co-op is how members

gain the services and benefits they

sought when they first formed or joined

the co-op.

Members need to make a conscious

decision to patronize their co-op even

when short-term prices or services may

sometimes seem better elsewhere. High

member use helps the co-op and, in

turn, the members as well. The

stronger the co-op, the more

competitive it will be in the

marketplace. A prosperous co-op with

the solid support of its members is

often recognized as a business leader in

its community or industry.

Promote the cooperative

Members need to understand that

their co-op (that is, their business) will

have a greater likelihood of success if

they are proud of it and if they promote

it to other potential members. If the coop has its own brand, members should

be proud to tell the story behind it,

discuss it and promote it. Promoting

their co-op’s business services, member

benefits, unique structure and its brands

will all increase the co-op’s potential for

success. 

Co-ops are formed and operate to

serve and benefit members. Members’

responsibilities are as important to the

co-op as the co-op is to members.

Taking these responsibilities seriously

and exercising them to the best of their

ability will give members a strong and

effective cooperative that is able to

effectively provide the services and

benefits they need in the present and

future. 

References: USDA Cooperative

Information Report (CIR) 1, Section 7,

Cooperative Member Responsibilities and

Control; USDA CIR 11, Cooperatives:

What They Are and the Roles of Member,

Directors, Managers, and Employees;

USDA CIR 55 Co-ops 101. ■

Rural Cooperatives / July/August 2014 7

“Co-ops are deeply rooted in the principles of democracy, and thus taking an

active part in co-op governance is a vital responsibility for all members.”
8 July/August 2014 / Rural Cooperatives

By Bruce J. Reynolds, Economist

Cooperative Programs

USDA Rural Development

Leadership is essential for guiding

organizations to fulfill the mission of their

stakeholders. The necessity of strong

leadership especially comes to the forefront

during times of major industry change or

stakeholder conflict. When leaders successfully guide their

organizations through turmoil, the imprint of leadership is

unmistakable. Even during times of “business-as-usual,”

business leaders must prepare their organizations to avoid

crises 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. Cooperative

stakeholders are members who have an ownership stake in

the business, but who are also stakeholders as customers or

producers, with the latter being either as suppliers of

products or of labor services. Many cooperatives do a

substantial amount of business with non-member

stakeholders. 

Democratic governance of a co-op business by memberstakeholders presents a unique challenge for its leaders. The

leaders of cooperatives try to make decisions with a consensus

of the membership, which differs from decision-making in

hierarchically controlled businesses. Still, member consensus

does not mean putting all decisions to a referendum. 

This point was emphasized by Jim Kiley, former manager

of the Sioux Valley Southwestern Electric Cooperative, when

he accepted a leadership award from the National Rural

Electric Cooperative Association in 1998. “One thing I

learned from the many fine people I’ve been privileged to

know in this business is that leadership doesn’t come from

entitlement or consensus — it comes from taking advantage

of opportunities,” Kiley said. “It comes from the application

of sound principles in pursuit of long-term goals.” 

His comment seemed to me, at the time, to be dismissive

of consensus. But in retrospect, I appreciate his message that

individual responsibility to lead must not be crowded out by

the opinions of the membership. Members have a voice in

their cooperative, but their views are not the last word on

many decisions. 

For example, member consensus might be to carry a line

of unprofitable branded products at farm supply stores or at

food co-ops that take-up shelf-space and gradually erode

earnings. 

Kiley’s belief that consensus does not control leadership

can be contrasted with leadership in hierarchically managed

businesses, 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.”
Rural Cooperatives / July/August 2014 9

The challenge of leadership of a cooperative is not to

simply follow a consensus, but to listen to members and to

carefully weigh their needs when determining the best

direction for the business to prosper. This requires special

skills and experience. 

This differing approach to leadership has been recognized

in training programs for co-op leaders, including by the

Graduate Institute of Cooperative Leadership (GICL),

established at the University of Missouri in 1972

(http://www.gicl.coop/giclorigins.html). Many other training

programs have likewise been established to fill a void in

standard leadership training curriculums that do not address

the importance of working with a cooperative membership. 

Tasks differ for co-op

managers and directors

Managers and directors in co-ops each have leadership

roles that do not overlap. Managers are leaders of

cooperatives, not just in overseeing operations, but in

understanding industry changes and in advising the directors

on strategic positioning and planning. 

Managers need to identify if, and when, “business-asusual” is becoming less sustainable. This type of complex

foresight is not usually developed by a manager without

interaction with others. Managers need to maintain a

strategic dialogue with staff and directors, and sometimes

with outside consultants. If major changes for the business

are recommended, managers are responsible for articulating

and planning new directions.

A board of directors in any type of organization has

governance functions and fiduciary duties. In a cooperative,

there is an added dimension of linkage between the directors

and the member-stakeholders (Hoyt). Directors are

responsible for communicating with members about policies

and upcoming decisions. Two-way communication is needed,

with directors being available to receive feedback from

members. 

Members often hold different points of view on whether

their cooperative should consider changes and, if so, what

those changes should be. Directors need the skill to use

member input to improve decision-making, while preventing

diverse views from becoming a source of divisiveness. 

Member responsibilities

Members of a cooperative have a responsibility to be

informed about policies, bylaws and operations (Wadsworth).

Member knowledge of operations includes having a basic

understanding about the industry and awareness of trends

and strategies. 

Members are more than passive, “yea or nay” responders

to leadership initiatives. The meaning of consensus for a

cooperative is that it is a process, often starting from a point

where members may have divergent views but lack sufficient

information on what the cooperative should do. As more

discussion and information is shared, management and

directors can consider member views in developing plans for

keeping their cooperative vital and growing. 

Acceptance of foreign product trading

Several decades ago, the marketing advantages of trading

foreign commodities were recognized by many cooperative

managers. Yet, grain cooperatives were reluctant at that time

to establish merchandising of foreign-sourced commodities

(Thurston). Such merchandising was not only considered to

be of no benefit to members, but could also be construed as

being detrimental to them. The argument against this

practice seemed to be basic economics: why contribute to

demand for a foreign competitor’s products by purchasing

them? 

The major advantage derived from trading foreign

products is to supply food industry buyers during the times

prior to U.S. harvests. It is hoped that customer loyalty will

develop by supplying their buyers year-around. Although

grain and cotton can be stored, prices for U.S. commodities

are often not competitive during certain times of the year. 

In the grain industry, there are additional advantages of

sourcing foreign crops, such as arbitrage opportunities when

having more choices of shipment origins. Another perceived

advantage from merchandising foreign grain is improved

market intelligence, derived from the ability to operate as

both a buyer and seller in world markets. 

Since the 1950s, cooperatives had repeatedly sought, but

not achieved, a durable grain exporting system (Reynolds).

The development of a global origination system was a critical

link that CHS Inc. eventually accomplished. A major step in

this direction was taken in 2003 with the opening of a

subsidiary for marketing Brazilian soybeans, primarily to

China (Dusek). 

CHS has since followed a growth path of more

subsidiaries or joint ventures for sourcing grain from Europe

to the Black Sea region, as well as additional South American

countries for soybeans. 

Trading foreign-sourced products was a vigorously

debated policy change by Sunkist members. As with CHS,

2003 was the turning point on this issue for the Californiabased citrus co-op. Sunkist went through a long debate

within 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
10 July/August 2014 / Rural Cooperatives

By Dan Campbell, Editor

e-mail: dan.campbell@wdc.usda.gov

Cooperatives that think

of their members as

“customers” — and

refer to them that way

in their

communications — are missing an

opportunity to remind people of what

makes a cooperative so fundamentally

different from other types of business,

says Bob Cohen, manager of the

Cooperative Development Center at

Kent State University (Ohio). That

difference is, of course, that while

“customers” buy goods and services

from businesses owned by others, co-op

“members” own, control and derive

multiple benefits from the business (see

sidebar, page 11). 

The purpose of a co-op is to meet

member needs, not to generate profits

for the owner or distant shareholders. 

Cohen’s comments were made while

serving as moderator for a panel

discussion, “Communicating the

Cooperative Difference,” held during

the Cooperative Communicators

Association (CCA) annual institute in

Pittsburgh in June. Some consumer and

farm supply co-ops — especially those

with retail operations — may also do

non-member business, so it may not

always be possible to avoid using

“customer.” But whenever possible, coops should use “member” and/or

“member-owner” in co-op

communications to help underscore a

key “co-op difference.” 

“From families living in rural

America desiring stable power supplies

or high-speed Internet, to grain and

livestock producers who enjoy local

ownership with international marketing

The Privileges of Membership

Co-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 effort

on youth groups, including FFA and 4-H. USDA photo by Lance Cheung. Facing page: Janice Johnson of GROWMARK discusses some of the ways

her 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 and

powerful as those who own and control

them,” Cohen said, quoting Rod Kelsay,

president of the Mid-America

Cooperative Council. 

As a primary contact point between

members and their cooperative, Cohen

said employees need to have a basic

understanding of the cooperative way of

doing business. At the very least, every

co-op employee needs to be able to

answer 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 was

organized?

• When is your annual meeting? 

GROWMARK: youth 

education is essential

Janice Johnson, marketing &

communications specialist for

GROWMARK’s Ontario region, cited

the following tell-tale example of the

difference between a producer-owned

co-op and a privately held or investorowned company. When a non-co-op

wants to tap into the feelings of

producers, it may have to form a special

focus group of farmers to get their

input. But with a co-op, the board of

directors — all from local communities

— is the “focus group” that provides

on-going input to management to

ensure that co-op operations are

structured to meet the needs of the

farmer-owners of the co-op. 

Patronage — year-end payments to

members based on the business they do

with their co-op — is a major co-op

difference, Johnson stressed. In the past

five years, GROWMARK returned

about $500 million in patronage to its

members in the United States and

Ontario, Canada, from its core

agronomy, grain marketing and energy

businesses. 

GROWMARK is owned by local FS

co-ops, each with their own

Rural Cooperatives / July/August 2014 11

The Co-op

Advantage

Bob Cohen cites the following

“big three” benefits of belonging to

a co-op, as described by Rod Kelsay

of the Mid-America Cooperative

Council. 

• Member Ownership — If you are

invested in an idea or business, it

is more meaningful. We can

promote the cooperative

advantage through member

ownership. Yes, they are

customers, but when we refer to

owners as customers, we miss a

key opportunity to sell our unique

cooperative advantage.

• Member Control — Those who

control the cooperative vote for

their representatives to the board

of directors. This democratic

control is different than Investor

Owned Control, where you vote

your shares of ownership. This is

a significant advantage for

cooperatives. 

• Member Benefits — The benefits

of cooperatives are as numerous

as the need for

cooperatives.

Generally, we think of

patronage first, but we

must not under-sell the

benefit of moderating

prices and stabilizing

the marketplace. Yes,

our cooperatives are

businesses, and thus

need to be run

efficiently to make a

profit. However, every

cooperative was

created to serve an important

need that was not being

effectively served in the market.

Serving that need is a key benefit

for member/owners. ■
12 July/August 2014 / Rural Cooperatives

autonomous board. GROWMARK’s

mission is to help improve the longterm profitability of the system’s

250,000 farmers and rural residents.

Co-ops can easily become

complacent about the need for co-op

education, Johnson said, if they assume

employees already grasp the advantages

of doing business in a co-op. But the

reality can be quite different.

GROWMARK is thus committed to

keeping employees informed about

cooperative principles and practices

throughout the year, with

greater emphasis during

Co-op Month (or Co-op

Week, in Canada). 

The co-op also supports a

number of youth education

programs, believing that it is

vital to instill co-op concepts

in students while “they are

young and impressionable.”

Johnson is also a director of the

Ontario Cooperative

Association (OCA), of which

GROWMARK is a member.

Johnson explained how OCA has

been instrumental in introducing

new co-op curriculum into several

Ontario high schools. Even for youth

who don’t choose an ag career,

GROWMARK believes that

instilling a knowledge and appreciation of co-ops in them will still benefit

the future success of the co-op sector. 

Each young person who wants to

attend the Cooperative Young Leaders

Program — started almost 50 years ago

by Ontario ag co-ops — needs to be

sponsored by a co-op or credit union to

participate in the summer camp

experience. The program has recently

been expanded, and participants are

being asked to sign a contract in which

they agree to promote the co-op

business model back at their school, at

their co-op and in their other activities,

hence becoming a corps of youth co-op

ambassadors. 

Like many co-ops across North

America, GROWMARK is a major

supporter of 4-H and FFA programs,

including an annual essay contest it

sponsors for FFA members who address

a co-op/ag related topic. Winners earn

college scholarships. GROWMARK

also has a strong internship program

that gives youth a real-world taste of

what it is like to work for a co-op. 

GROWMARK is an example of how

co-ops are built to last, with

membership often passing from one

generation of family farmers to the

next. The Ontario agriculture

cooperative system began in 1914 with

a group of farmers getting together to

break a monopoly on binder twine.

They are now branded FS cooperatives

that have been with GROWMARK for

the past 20 years. The Ontario co-op

system is celebrating its 100th

anniversary this year, while

GROWMARK in the United States is

“over 85 years strong,” Johnson said. 

Utility co-ops stress civic 

progams, local connections 

Utility co-ops, in particular, often

feel the challenge of making their

members feel like true member-owners,

not just customers. Although utility coop members may not rely on a co-op to

market their crops or to supply them

with farm supplies, every time they turn

on a light, they are relying on their coop for a necessity of modern life. Utility

co-ops are not-for-profit business with

their only purpose being to provide the

best service at best possible cost. 

Many electric co-ops and statewide

utility co-op associations rely on a

member magazine as their primary

vehicle for strengthening bonds with

their members. Paul Wesslund, editor

of “Kentucky Living” magazine — the

membership publication of the

Kentucky Association of Electric

Cooperatives — said the publication has

a circulation of more than 500,000 and

a “pass-around” readership of more

than 1 million, making it by far the

most widely read magazine in the state. 

It is a challenge to produce a

publication that appeals to such an

“incredibly broad readership,”

Wesslund noted. The traditional focus

for utility membership magazines is

known in the publishing industry as a

“lifestyle” mix of articles, including

travel, food, arts & culture and general

human interest features. But Wesslund

said “Kentucky Living,” now in its 66th

year, is increasing the amount of

content devoted to telling members

more about what they need to know

about their co-op and the energy they

rely on. “Local” is also a very important

concept to “Kentucky Living” readers,

Wesslund stressed, so there is a strong

emphasis on what co-ops are doing to

better 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 of

Kentucky Living magazine, which is

supplementing its “lifestyle” mix of articles

with an increasing amount of space devoted

to energy issues that impact electric co-ops

and their members.
Rural Cooperatives / July/August 2014 13

federal environmental regulations that

place stricter limits on the amount of

carbon dioxide that coal-burning

powerplants can emit. 

• “On The Grid” is a regular

department introduced several years

ago that focuses on key energy issues.

In June 2014, the topic was renewable

energy in Germany, and how many of

its “green initiatives” have not gone as

hoped. 

• An editorial in which Wesslund urges

readers to check out a new book,

“Power Plays,” in which author Ted

Case relates the history of electric coops and their relations with U.S.

Presidents, starting with the creation

of the Rural Electrification

Administration under President

Franklin Roosevelt. The book shows

how politically active utility co-ops

are on behalf of their memberowners. 

• Articles that focus on co-op support

for a wide array of civic efforts,

including programs that raise cancer

awareness, that help students attend

summer camps and promote

participation in youth orchestras. 

“We try to link the magazine to the

readers’ local electric co-op and to

promote the goal of being good

environmental stewards,” Wesslund

said. Following on Cohen’s remarks, he

said “Kentucky Living” refers to

member utilities of the statewide

association as “co-ops,” never as

“corporations.” 

For any utility co-ops not convinced

of the need to engage in co-op

education, Wesslund said to keep this in

mind: as a co-op, the members hold the

power to vote to sell out to an investorowned utility if unhappy with their co-op. 

Working to rebuild 

a local food system

Jim Converse, regional development

specialist at Common Wealth Inc.,

which launched the Lake-to-River Food

Cooperative in Youngstown, Ohio, said

the co-op is working to rebuild the

local food system in northeast Ohio and

western Pennsylvania. For the new

wave of local food co-ops and food

hubs, the effort often involves

communicating co-op values and

advantages to people who may know

very little about cooperatives. 

One of Converse’s main messages is

that Lake-to-River Cooperative’s

business model is centered on serving

“a triple bottom line,” emphasizing

business practices that promote

sustainability through its social,

environmental and financial goals. “A

major component of the social goals is

food justice through better access to

local healthy food by the many lowand moderate-income people in the

region,” he said. 

The local food movement, Converse

stressed, is rooted in promoting selfsufficiency for food production while

providing products that meet its

members’ food safety concerns. 

The regional and local food

movement that spawned the Lake-toRiver Food Cooperative started in 2003

as a farmers market, but the 18 growers

grew tired of “sitting around in a

parking lot” waiting for customers,

Converse said. So they transformed the

business into a multi-stakeholder co-op,

which includes farmers and other

producers, buyers and food processors

as members. It is currently considering

adding workers as members as the coop grows and the staff expands. 

The co-op helps members keep

more of the revenue generated from

their work, rather than seeing profits go

to a corporate headquarters in another

state or foreign nation. The co-op thus

follows a circular, rather than linear,

economic model, Converse said. Seeing

the various stages in the food value

chain as inter-related — and bringing

them into on over-arching co-op model

— puts growers, processors and

consumers into mutually supporting

efforts.

A major benefit of local food systems

is job creation, Converse said. If northeast Ohio could grow just 10 percent of

its own food locally, it would support

8,000 new jobs. Growing 25 percent

local 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 operation

in western Pennsylvania. The farm is a member of the Lake-to-River Food Cooperative in

Youngstown, Ohio. 

continued on page 41
14 July/August 2014 / Rural Cooperatives

Food hub operators

share insights needed

for business

success

Editor’s note: This article is excerpted from Running a

Food Hub: Lessons Learned from the Field, soon to be

available from USDA as part of a technical report series on

food hubs. Matson is the principle, while Thayer and Shaw

are consultants, with Matson Consulting in Aiken, S.C.,

which has been a leader for more than a decade in helping to

develop producer co-ops and food hubs. This research was

supported by VAFAIRS (a co-op and rural business

development center in Virginia) through funding from

USDA Rural Development. 

This article condenses into a “lessons

learned” format some of the critical

knowledge derived from interviews

conducted with 14 food hubs from across

the United States about this rapidly growing, but still

young, segment of the food industry. 

In the best tradition of cooperatives, these food hub

leaders hope others will learn from their experiences

and the roads they have traveled so far. 

By

James Matson,

Jeremiah Thayer,

and Jessica Shaw

A father and daughter sell heirloom beans and other produce at the Bath

County Agricultural Education and Marketing Center, Owingsville, Ky. USDA What

photo by Lance Cheung. We’ve Learned

SoFar
Rural Cooperatives / July/August 2014 15

Customers

Customer types varied significantly in the sample of

organizations interviewed. Ranging from individual

customers to large-scale food service operations, the

targeted customer often dictates aspects of the

venture, including whether or not safety certifications

are important, the level of infrastructure necessary

and the type of marketing approach used. 

Some smaller food hubs focus only on local

customers, selling primarily to restaurants,

independently owned or regional grocery stores,

community supported agriculture (CSA) associations,

or individuals. Mid-scale food hubs also tend to serve

local customers, but also supply school districts,

institutions (such as hospitals and colleges), larger

regional chains or distribution warehouses for

regional grocery stores. A few of the food hubs focus

on national grocery store chains that supply local

produce to their customers by selling to distribution

warehouses for grocery store chains.

Lesson Learned: Determine your

likely customers and the food demand unique to

your region (retail, wholesale, organic, grassfed, etc.) and then tailor the food hub’s products

and approach to suit the identified market. 

Products

While produce, such as fruits and vegetables, are often the

main staple of a food hub, many hubs also offer additional

product lines, including dairy products and meat, shelfstable items and local grains and flours. The latter

products can help extend their operating season and

mitigate drops in revenue during non-production (usually

winter) months. A few of the food hub leaders interviewed

were only marginally involved in produce sales. Instead,

they focus on meats and related products. 

Increasingly, handling value-added products is being

explored by many food hubs. While none of the food hubs

interviewed manufacture their own value-added goods,

many of them use these products to expand their product

line. These products allow an opportunity for better

margins than some traditional food hub products while

also extending its season. 

A few of the food hub operators interviewed also

included distribution of non-local items, which still fit the

core values of the food hub. These items were often

products not available locally, such as nuts, oils or coffee,

or were designated as “specialty items” in some way, such

as foods labeled “fair trade” or “organic.”

Lesson Learned: Seek to source and

provide a mix of products that will allow you to

satisfy demand or an identified need in the market.

This may include distribution of products that are

not strictly “local,” but still suit the mission of the

food hub. 

Labor

Continuity of labor in management and sales is

important because frequent staff changes can have a

negative impact on food hub operations. Some of the

surveyed food hubs experienced declines in sales

volumes during periods of employee transition because

food hubs often rely on employee-customer relationship

marketing. 

Due to the specific skills needed for a food hub and

reliance on relationships with producers and customers,

finding good part-time labor is a common issue. While

some employees may be part-time or seasonal, they still

need to possess the skills necessary to communicate with

growers, especially in cases where there are product

quality issues. Honesty and work ethic are two other

important traits to have in a labor force. 

Nearly all the leaders interviewed have used

volunteer labor in the past, or still use it in their current

operations. But many cautioned that volunteer labor

lacks consistency and skill continuity. While volunteers

are useful when the food hub needs more help, to be

effective, the hub needs to maintain key skills and a

knowledge base to achieve stability in operations and

sales.

Lesson Learned: Volunteer labor can be

useful, particularly during start up or periods of

growth, but long-term success will require regular

employees and the continuity of institutional

knowledge and relationships they bring. 
16 July/August 2014 / Rural Cooperatives

Food Safety Certifications

While each of the entities contacted expressed varying

levels of concern and prioritization regarding food safety,

every organization was aware of the future need to

consider safety certifications. A few food hubs have begun

to require mandatory Good Agricultural Practices (GAP)

certification of their producers, while others simply help

producers become more aware of the types of food safety

practices in an effort to prepare them for the future. 

The general consensus among those contacted was that

if not so already, safety certifications will soon become a

mandatory part of doing business. Almost all of the

entities contacted are actively working in some capacity to

move their producers and the business towards safety

certifications. 

The targeted customer base of a food hub has a large

impact on its level of concern with safety certification.

Organizations that focus on restaurant and direct retail

customers are the least concerned with safety certification.

That’s because these organizations are not pressured as

much from their customers to offer GAP or other safetycertified produce. Instead, they are able to rely on their

own assurances to customers regarding food safety.

Those with institutional customers – including hubs

that sell to hospitals and school districts, or those dealing

with sales of proteins – are typically much more interested

in food safety certifications and strongly encourage

producers to be certified. In other cases, the hubs used

surveys and other methods to gauge the readiness of

member-growers to accept safety certification as a

condition for supply. 

Lesson Learned: Allow the needs of food

hub customers to dictate the certification

requirements of a food hub. Whether required by

customers or not, food hubs should take a long-term

view by maintaining awareness of the food safety

and regulatory environment in order to be prepared

for future demand.

Software

Hub managers interviewed used a broad range of

information technology in their operations, including MS

Excel, custom designed software, off-the-shelf products

such as Quickbooks, specialty food hub software, or a

blend of all of the above. In general, there is little

consensus 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 of

proprietary software emphasized that it is important to

have the input of both designers and those who are

familiar with the food hub’s intended operations during

the software design and implementation. Including both

of these perspectives during the beginning stages of the

process allows a software designer to benefit from the

input of farmer contacts and can avoid costly redesigns in

the future through efficient design. They also note that

custom software should be viewed as an ongoing process,

and many hubs continue to change or add components for

years after an initial purchase, at additional cost.

Lesson Learned: There is no “one size fits

all” software solution. Conscientiously choosing

software to suit as many needs of the food hub as

possible will lead to the greatest efficiency in

operations, but will likely still not produce ideal

results. 

“You can’t run a business on good intentions.”
Rural Cooperatives / July/August 2014 17

Infrastructure

Infrastructure seemed to depend on two different

approaches 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 taking

this approach use the equivalent of a medium-sized

warehouse (5,000-10,000 sq. ft.) that included

sufficient room for truck parking, loading areas,

product storage, dry goods storage and cooling

capacity. As a food hub expands or decides to offer

other services, such as light food processing or

freezing, supplementary warehouse space and

additional equipment are often necessary. 

Of the food hubs operating with infrastructure,

nearly all use company-owned trucks to do at least

some local delivery of products to customers. Local

trucking resources typically consist of smaller shorthaul vehicles. However, based on their circumstances,

some also outsourced hauling with local trucking

companies to move large volumes or product over

greater distances.

Approach 2 — Other food hubs — those that

provide fewer physical services and instead focus on

coordination, payment, marketing, and promotion —

often have limited infrastructure. These food hubs

tend to utilize much smaller warehouses (1,000-4,000

sq. ft.) or a mix of owned warehouse space and

borrowed space from other entities or food hub

members. While there are examples of food hubs

maintaining long-term storage facilities, many use a

“just-in-time distribution” approach that minimizes

the need for storage and cooling space. Food hubs

that use larger spaces often rent or lease unnecessary

space to producers or other entities for storage to

help offset costs.

Lesson Learned: Base infrastructure

on the product handling and storage needs of

the food hub, but incorporate a long-term view

of infrastructure and equipment to provide

easier transitions through growth periods in the

future.

Viability and Success

The majority of the ventures that participated in the

informal survey were not operationally profitable. To

remain in business, many food hubs exhibited some

cost-saving advantage, such as volunteer labor, logistics

arrangements and partnerships. Others had access to

outside funding, such as grants. Most have remained in

business by obtaining outside funds, whether in the

form of donations, a grant or foundation funding.

Others are part of a larger organization or obtain some

form of business advantage. 

Long-term financial goals almost always included

reaching a point where the business did not have to rely

on outside funding. While a few hubs plan for outside

funding to be a regular part of their operations for the

foreseeable future, most believe that grants and other

sources of short-term funding were necessary to begin

operations or to reach a new plateau, but were not good

options for the long-term, since continuation of such

funding is not assured. Further, large amounts of time

and effort are required to apply for grants and other

outside funding. The vast majority of food hubs

expressed a desire to cover operational costs internally

by increasing sales. 

For the nonprofit food hubs, strategic goals include

acquiring grant funds, attracting donations and

partnerships, and other forms of community support

that allow them to continue to expand their operations

to levels that may not be “profitable” in the short run,

but permit them to remain viable as a mission-driven

organization. 

Lesson Learned: Utilize any available

funding to get started, but keep in place a longterm strategic plan to achieve operational

profitability; this is necessary to ensure long-term

viability of the business. 
18 July/August 2014 / Rural Cooperatives

Operations

Food hubs have proven to be innovators in dealing

with, and offsetting, costs. In an effort to sustain their

operations, food hubs have limited the scope of their

initial operations or acquired sources of outside

funding and capital, formed partnerships or gained

access to advantageous infrastructure. 

One venture began operations by renting a truck

by the day and using a cell phone to communicate

with the driver. When the time came to invest in

infrastructure, efforts were made to source

inexpensive facilities and used equipment that met the

basic needs of the business.

Another food hub leader said the business could

not have been successful by only selling local

produce. The solution was to work with a larger

specialty manufacturer as a licensed distributor. This

provided the food hub with many new sales

opportunities, as well as providing a large amount of

inventory, steady sales and products that could be sold

year round. 

Several food hubs attempt to utilize existing

infrastructures and food systems rather than

attempting to “reinvent the wheel.” These

organizations have found ways to partner with food

service companies to take advantage of the already

efficient logistics network and large volume of sales

and marketing. This could also involve making

arrangements with food hub members or other

nonprofit business entities for low-cost storage and

cooling facilities or transportation equipment. 

Several food hub managers said that if a venture

plans to begin with anything larger than a minimalscale operation, they need to procure a large amount

of starting capital to remain viable. If not fully

funded, a significant portion of time and energy will

need to be expended to regularly obtain infusions of

capital and sustain operations. 

Lesson Learned: Actively seek to find

operational advantages through partnerships or

working with existing infrastructure in a

region. Make sure the food hub has sufficient

funding to sustain operations until revenues are

at a sufficient level. 

Transportation

Transportation and delivery expenses were often

identified as the main cost issue for operating the food

hub. In addition to the basic cost of purchase or leasing,

paying drivers and the time spent in organizing the

logistics of pick-ups from producers and deliveries to

customers contributes significantly to the financial

burden of the food hub. Even food hubs that have been

able to acquire trucks, equipment or other infrastructure

items through grants or other funding sources still deal

with the significant cost of ongoing maintenance. 

Some food hubs have found ways to minimize the

cost of transportation. Utilization of out-sourced

shipping and trucking often alleviated some of the

burden of maintaining a consistently operational

delivery method. Many hubs have established

relationships that help a trucking company fill empty

loads while providing efficient transportation for the

food hub and thus lower costs for shipping and

transportation than would have otherwise have been

possible. 

Lesson Learned: Whether leased or

purchased, trucking and logistics will often be one

of the largest costs of operating the food hub.

Know your costs to avoid delivery expenses

exceeding order values for deliveries.
Rural Cooperatives / July/August 2014 19

Common Ground

Each of the food hubs included in this study had unique

operations and goals that reflect their local community

environment. 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 still

in a growth phase.

■ All were operating with minimal staffing. All staff

members were fulfilling multiple roles in the

organization.

■ All had their own transportation infrastructure;

however, their vehicle fleets were limited. Many used

local or regional transportation firms to augment their

transportation capacity. 

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

■ Only a few were directly engaged in processing. Some

of the hubs that attempted processing in the past are

now outsourcing these activities to other firms. 

■ The time and costs of safety certifications and

insurance were of concern to all. They expressed keen

awareness of the impacts of new food safety

regulations, especially those stemming from the Food

Safety Modernization Act. 

■ Most possessed access to a small- or medium-sized

warehouse (1,000-10,000 sq. ft.) for storage, as well as

to holding coolers or their equivalents.

■ They rarely use formal advertising or media campaigns.

The food hubs depended mainly on relationship

marketing and point-of-sales contacts with producers

and buyers.

Because of their adaptability, no one measure can be

applied to all food hubs. Each one must be measured by

its success or failure in achieving its own underlying goals. 

From fulfilling a specific social mission to achieving

independent financial profitability, food hubs are

positively impacting both their member producers and

communities in numerous ways. Though much remains

to be learned about them, food hubs continue to be one

of the most exciting innovations in the local foods supply

chain.

“If we could do it over again...” 

Many of the food hub managers and leaders interviewed

offered insight into issues they had faced or provided

information that was not directly related to the general

categories covered by the interviews. These

recommendations include: 

• Seek partnerships. 

• A local food bank, community kitchen or retail store can

provide access to distribution resources as well as storage

space 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 them

to participate in aggregated distribution. The hub may have

to work to educate producers about the benefit of joining

the 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-oriented

viewpoint. 

• Maintain continuity of human resources to retain the established relationships and institutional knowledge of the staff. 

• No matter how well you think you know your market, you

will very likely have to be flexible in order to meet the

actual demand. Be willing to change. 

• Building a food hub is like running a marathon with interval

sprints every mile. Training, focus and perseverance are

keys 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 these

documents can cause inefficiency. Take time to produce

them correctly. ■
By Rob Brown 

e-mail: rbrown@cdi.coop

Editor’s note: Brown is director of

Business Ownership Solutions, a program of

the Cooperative Development Institute.

Employees of three

rural Maine businesses

— Burnt Cove Market,

V&S Variety and

Pharmacy, and The

Galley — are now the owners of the

businesses. By forming the Island

Employee 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 Sandra

Seile. 

Combined, the three businesses are

one of the island’s largest employers,

supporting 65 jobs. The three

businesses provide the community with

a full array of groceries, hardware,

prescription drugs and pharmacy items,

craft supplies and other goods and services.

Local ownership seen as vital

When word first circulated that the

Seiles were thinking about selling the

stores and retiring, employees were

concerned that buyers who were not

part of the community might not

maintain the same level of services and

jobs. Other employment options on the

island are limited, so keeping the jobs

was a major concern for the local

economy. 

During the summer of 2013, the

Seiles and their employees began

meeting with the Independent Retailers

Shared Services Cooperative (IRSSC), a

purchasing cooperative of independent

grocers in New England. Also

participating in the talks was the

Cooperative Development Institute

(CDI), a nonprofit group that provides

technical assistance to all types of

cooperative businesses. These

conversations explored the idea of

20 July/August 2014 / Rural Cooperatives

Co-op Development Action

Maine 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 owners

decided to retire after 43 years of commerce on Deer Isle, Maine. Photo courtesy IEC 
Rural Cooperatives / July/August 2014 21

transferring ownership of the

companies to the workers.

All agreed that co-op ownership

would be a win-win option. The

employees worked with IRSSC, CDI,

Specialized Accounting Services (SAS)

and other advisors for nearly a year to

create the worker cooperative, secure

financing and purchase the stores. The

overall goal was to keep the ownership

and profits local and preserve jobs.

“We are pleased that we were able

to help the employees purchase the

stores that Sandra and I have built over

the last 43 years,” says

Vern Seile. “It’s our way

of saying thank you to

them and our customers

for their support.”

“This is a once-in-alifetime opportunity,” says

IEC President Alan

White. “Many of us have

worked in these stores for

decades and we never

imagined this possibility.

We know we have a lot to

learn and a lot of work to

do to be successful. But

success means we will

really achieve the

American dream —

economic security and

building wealth through ownership,

both for our families and our

community.”

Sharing the load and rewards

In a worker co-op, each workerowner has one (and only one) share in

the corporation and one vote in its

governance. Co-ops typically get their

start when workers band together to

launch a new business. Conversions

from conventional corporations are

much less common, especially ones of

the size and scope of the IEC. 

“The IRSSC serves smaller,

independent grocers and retailers

around New England,” says Mark

Sprackland, IRSSC executive director.

“We hope that this is only the first of

many locally owned and operated coops that we can help form in

communities focused on sustainable

growth.” 

People across the country have been

trying to figure out the best way to

assist business owners who want to

consider conversion to employee

ownership, either as a growth strategy

or as a retirement strategy. Co-op

members and economic development

staff that work with them hope this coop conversion will provide a model for

others. CDI, IRSSC, SAS and other

advisors will continue to work with the

IEC in the future to help build a strong

ownership culture and learn new

management, governance and financial

planning skills.

Financing the purchase 

Maine-based CEI and the

Cooperative Fund of New England

(CFNE), two Community

Development Finance Institutions

(CDFIs), organized the financing to

buy the businesses. Without these

funds, the workers’ dreams of buying

the stores and keeping them local would

have remained just that. 

“This financial transaction represents

the best kind of collaboration needed to

build wealth in Maine’s rural communities,” says Cole Palmer, CEI loan and

investment officer. “CEI

was tremendously excited

to help the IEC realize its

goal to purchase these

three businesses.”

CFNE has worked

with cooperatives since

1975 and was able to

contribute expertise to

the lending process. 

“We’re proud to

commit to this very

important workercooperative conversion,

which preserves local

ownership of these

businesses and retains 65

essential jobs in the

communities,” says Gloria

LaBrecque, Northeast loan and

outreach officer with CFNE. “We

congratulate the worker-owners of the

IEC on this milestone achievement.”

Now that the employees own the

businesses, they are excited to have a

say in how they are run and a share in

the profits they generate. As Vern Seile

says: “Now it’s their turn to build on

and 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 cooperatives, formed last year to help preserve 65 jobs and maintain businesses that

are crucial to the local economy.

“Success means we will really achieve the American dream — economic security and building

wealth through ownership, both for our families and our community.”
22 July/August 2014 / Rural Cooperatives

Editor’s note: The following is condensed

and adapted from articles that originally ran

in CCA News, the member newsletter of the

Cooperative Communicators Assoc. The

original articles were written by Sheryl

Meshke of Associated Milk Producers Inc.

(AMPI), Dana Kelroy of the Cooperative

Network and Nickie Sabo of AMPI.

After more than 30 years

as a “franchise player” in

co-op communica-tions,

David Sheets has been

named “most valuable

player.” Sheets is the 2014 recipient of

the H. E. Klinefelter Award, the highest

accolade bestowed by the Cooperative

Communicators Assoc., recognizing a

career devoted to advancing the state of

co-op com-munications. As senior vice

president at RushShelby Energy, Sheets

directs the communications efforts of the

15,000-member electric cooperative that

serves nine east-central Indiana counties.

CCA’s other grand awards went to

Chris Hamon, CEO for White River

Valley Electric Cooperative Inc. in

Branson, Mo., who won the CEO

Communicator of the Year Award, and to

Michelle Ricard Geans, who won the

Michael Graznak Award, recognizing her

as one of the nation’s top young (under

age 35) co-op communicators. She is a

communications specialist for Baldwin

EMC in Summerdale, Ala. 

The awards were presented during

the closing ceremony of CCA’s annual

Co-op Communications Institute, held

in Pittsburgh, Pa., in early June. 

Co-op career of accomplishment

In 1982, Sheets became the first fulltime communications specialist for an

electric distribution cooperative in

Indiana. Three years later, he was a

member of the first class to earn the

Certified Rural Electric Communicator

designation. In 1992, CCA presented

him with the Graznak Award,

recognizing him as an aspiring young

communicator.

When Terry Jobe was named

RushShelby’s president and CEO in

Co-op communications contest toppers

CCA’s annual Co-op Communications Contest attracted 678 entries in

2014. Awards were presented at the Pittsburgh conference to winners

in 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 Communications

Services, was selected based on a portfolio of her work that included

investigative and entertaining features, technical writing, co-op

education articles and speech writing. 

■ Publication of the Year — The communications staff of Tennessee

Farmers Cooperative won for a special report, “The Sum of Us.” The

co-op annually creates a “corporate identification” publication that

has replaced its traditional annual report, but which still includes

removable financial report inserts.

■ Photographer of the Year — Mic Smith won for photography

contributed to South Carolina Living, the statewide electric co-op

association’s member magazine. Smith was cited for capturing

images that were consistently well lit and framed, including a

difficult-to-shoot nighttime concert. 

■ Programs and Projects, Best of Show — Greg Brooks and Savannah

Chandler of Georgia’s Walton EMC won for the co-op’s social media

program, which scored a perfect 100. The campaign included efforts

on Facebook, Twitter and “YouTube.” Judges praised the “engaging

voice,” “clear and effective language” and the “ability to address

different audiences.” 

■ USDA’s Rural Cooperatives magazine won first place for editorial

writing and third place for news writing. Both were won by Dan

Campbell. For a full list of award winners, visit: www.

communicators.coop.

Sheets, Hamon, Geans

named top co-op

communicators
Rural Cooperatives / July/August 2014 23

2010, his first move was to name Sheets

as the cooperative’s senior vice

president. “I wanted his experience and

knowledge available to me and my

board at all times,” Jobe says. “I am a

man of numbers who understands the

value of working with a man of words.” 

With a seat at RushShelby Energy’s

senior management table, Sheets

continues to elevate communications to

a place of importance.

A common theme in nomination

letters for Sheets was his ability to

communicate an idea to a wide variety

of people in a clear, concise manner.

Sheets’ responsibilities include media

relations and communications,

including coordinating the cooperative’s

annual meeting for 20 years. He also

supervises employees responsible for

member services, marketing,

advertising and information technology.

As editor of the co-op’s monthly

member newsletter, Sheets leads a team

that has been honored with numerous

national communications and

publications awards. His ability to

mentor others “elevates him from a

player to coach,” award presenter

Sheryl Meshke of Associated Milk

Producers Inc. said. 

The passion he shows for his work is

equaled by contributions to his

community. Dressed as a clown, he is a

frequent entertainer at a children’s

hospital and he is beginning his 40th

season as a high school sports official,

working basketball, football and

volleyball games, including officiating

at state championship finals.

“Dave set the bar high for those of

us who joined the cooperative

communication business after him,”

says John English, retired manager of

corporate relations for Noble Rural

Electric Cooperative. 

The tall and short of it: Graznak award winner

Michelle Richard Geans requires a little boost

in order to have an eye-to-eye conversation

with 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 Living

magazine, 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 the

financial information typically found in an annual report, along with other information that makes it a striking “identity”

publication for the co-op.

24 July/August 2014 / Rural Cooperatives
CEO involves all in

communications 

Under Chris Hamon’s leaderhip,

White River Valley Electric

Cooperative (WRVEC) “does more

than communicate effectively; it

embodies the cooperative idea of

involving the member-owners and

making the entire co-op, literally, a part

of the effort,” one selection committee

member said. “Elected officials,

policymakers and community leaders

pay attention when they know they’re

receiving communications not just from

one person speaking for an

organization, but from the large body

of people that organization represents

and from its members individually.”

Hamon was saluted for

demonstrating his commitment to

communication with his board, his staff,

co-op members and the communities

the co-op serves through his

transparency and willingness to speak

out on key cooperative issues. He

includes communication staff in

strategic planning and encourages their

professional development.

Hamon, who has been with the coop since 1985, has been willing to add

staff to ensure that all forms of

communication are well utilized. If a

matter of national import arises in the

energy industry, he promotes an active

role for the co-op and instigates

creation of local marketing campaigns

to inform and energize the voting

public, says Diana Bradford, marketing

coordinator at WRVEC. 

Among the communications efforts

he has championed are: 

• Member Alliance Program — a

grassroots group that can be

mobilized for action when legislative

or other issues arise that require a

quick response;

• Communicating through videos and

commercials;

• Media Relations Day — A luncheon

for the media in the co-op’s fivecounty service area, which includes a

talk by Hamon about vital issues for

members and the general public. 

• Member Appreciation Days — Each

Friday in October, during National

Co-op Month, the communications

department arranges a lunch for

members at one of the five WRVEC

offices and takes the opportunity to

visit with members about issues that

may be affecting them and the

cooperative.

Hamon also represents Oklahoma,

Arkansas, Louisiana and Missouri on

the National Rural Utilities

Cooperative Finance Corporation,

which helps to provide financing to

more than 900 cooperatives. In 2009,

he won the J.C. Brown CEO

Communication Leadership Award

from the National Rural Electric

Cooperative Association for

“demonstrating a clear understanding of

and commitment to the strategic role of

communications in employee, member

and community relations.”

Multi-talented Graznak winner 

Michelle Ricard Geans is a key

player in producing Baldwin EMC’s

publications and is known for her

abilities to design, photograph and

write. She also shines when developing

internal and external communications

projects and campaigns. 

A pivotal moment in Geans’ co-op

career occurred when she began

wearing a pink hard hat that eventually

ignited the “Pink Power” campaign in

2011, which raised funds for breast

cancer research. She first donned the

pink helmet when photographing and

interviewing co-op linemen and other

employees. Soon, at their request, all

work crews were wearing the pink hard

hats to raise breast cancer awareness. 

Geans designed the logo for the

effort, photographed campaign

highlights and wrote feature stories

about it for the cooperative’s Alabama

Living magazine. The Pink Power

campaign has received both state and

national recognition. Now in its fourth

year, the idea is spreading throughout

the country.

“Michelle is always willing to lend a

hand with a cause; she’s always the first

to help with any cooperative or

employee project,” says Rebecca Shobe,

manager of communications for

Baldwin EMC. “She has a genuine

talent for leading others and

encouraging them to get involved, and

always manages to add a splash of

appropriate humor in the mix.”

That humor has been a part of the

communication strategy for Geans, who

previously worked for a TV station. For

example, she took the common

Southern adage “Bless your heart,” and

turned it into a slogan for Baldwin

EMC’s heart walk. 

“Michelle has an eye for

photography that tugs at the heart,”

says Graznak committee member

Megan McKoy-Noe. “She breaks her

writing into easy-to-consume chunks –

a great tool in the age of shorter

attention spans.” Geans’ work has

earned multiple state and national

awards, including the 2011 Cooperative

Communicator of the Year for the state

of Alabama.

From singing “This Little Grid of

Mine” at a co-op event, to decking out

the state of Alabama in pink hard hats,

this Graznak winner makes life a bit

brighter (and funnier) wherever she

goes. ■

Chris Hamon

Rural Cooperatives / July/August 2014 25
26 July/August 2014 / Rural Cooperatives

Why women farmers are key to global food security 

The Missing Piece
Rural Cooperatives / July/August 2014 27

By Hannah Guedenet, Paul Guenette 

and Lydia Mbevi-Nderitu

Editor’s note: The authors are all with

ACDI/VOCA, where Hannah Guedenet is

communications and technical manager;

Paul Guenette is executive vice president

for communications and outreach;

and Lydia Mbevi-Nderitu is regional

gender and youth specialist.

Since its founding in

1963, ACDI/VOCA has

kept rural cooperatives

at the heart of its vision

of a world in which

people are empowered to succeed. This

vision has resulted in millions of

farmers and entrepreneurs achieving

growth, thanks to the cooperative

business model. 

These cooperatives have mobilized

capital, pooled knowledge and achieved

scale. Such groups not only catalyze

local economic growth, but often also

serve as the “glue” for social initiative

and effective, equitable community

planning. 

Cooperatives are an important way

to group rural producers into an

efficient, effective interface with

markets — an essential condition that

results in major contributions to local,

regional and global food security.

Farmers engaged in cooperatives not

only increase their own incomes and

household food security, but their

improved food production and postharvest handling practices lead to

stronger food markets for the region. 

Women are the ‘missing piece’

In recent years, it has become

increasingly apparent that many

cooperatives have been overlooking one

key group: women. Women farmers

play a major role in food production,

particularly in rural areas of the

developing world. But they are often

marginalized when it comes to

accessing farming services, such as

improved seeds, equipment and

technical knowledge. 

A recent report by the World Bank

and ONE campaign found that female

farmers in sub-Saharan Africa are 13 to

25 percent less productive, in terms of

yields, than their male counterparts.

The report suggests that closing this

gender gap could provide much-needed

economic growth to the continent. 

Lydia Mbevi-Nderitu, ACDI/VOCA

regional gender and youth specialist,

based in Nairobi, Kenya, has spent a

large part of her career working with

rural farmers. She has worked to find

ways to increase women’s participation

in, and benefit from, ACDI/VOCA’s

projects. In the following excerpt, she

shares her experience working with a

large farmers’ association in East Africa

to help them see the value of taking a

gendered perspective to their approach.

Nancy Winnie (facing page) is a member of a

farmers’ group in Liberia that is working with

ACDI/VOCA’s Liberian Agricultural Upgrading,

Nutrition and Child Health (LAUNCH) project.

The project works through farmer associations

to teach growers how to use environmentally

sustainable production techniques. Photos

courtesy ACDI/VOCA

“k

Early in my career, I was one of those who thought of farmers as

men — I just lumped them all together and never really thought

about the role women play in farming. My eyes were opened when a

project I worked on was audited and scored poorly in gender

integration. That led me on a new career path to learn more about

how development projects could function differently and ensure that

both men and women benefit. 

“For 50 years, ACDI/VOCA has worked in development to

ensure food security and economic empowerment for communities

around the world. In 2012, ACDI/VOCA launched its gender

policy, a commitment to women’s empowerment and mainstreaming

gender in all its activities. ACDI/VOCA has learned through our

work that using gender approaches and analysis is part of doing

“smart” development. Gender approaches and tools allow us to bring

an awareness of gender issues to our program design,

implementation, and monitoring and evaluation activities. My role is

to 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 operates

in 10 countries. In carrying out a gender assessment of their work, I

found some of their leadership thought like I had: that their members

were a homogenous group. They did not have membership data

disaggregated by gender or age and couldn’t tell you how many of

their members were women. 

“Though the federation has provided services to its members since

2002, we agreed that the leadership needed to look closer at their

membership base so that the services they provide are beneficial to all

members of the household and, ultimately, the community. It was

interesting to see that the national farmer leaders from Rwanda,

Burundi and Congo whom I interacted with had very high levels of
28 July/August 2014 / Rural Cooperatives

The gender policy the federation put

in place is just the beginning in the

complex and challenging task of

empowering female farmers.

Organizations that are resistant to

change and existing power structures

that are reluctant to cede power are

daunting hurdles to overcome. Social

patterns are firmly entrenched in

decision-making systems, such as

maintaining membership rosters based

on the man’s name or tying

membership eligibility to land title —

which is often in the man’s name. 

Women and food security

The shift to include female farmers

and involve women members in farmers

groups is vitally important, particularly

in light of a growing global population

and rising rates of food insecurity.

Female farmers can play a significant

role in improving food security,

especially in rural areas. 

When cooperatives like the one in

East Africa ensure inclusive participation of female farmers in their

activities, these women have access to

new communication technologies that

will inform them about improved seed

varieties, cultivation techniques and

post-harvesting handling strategies.

According to the United Nations’ Food

and Agriculture Organization,

improving women’s access to the same

productive resources as men could

increase yields on their farms by 20-30

percent. This would ultimately lead to

as much as a 17-percent decrease in the

number of hungry people worldwide. 

Financial institutions serving the

“missing middle” space between formal

banks and microcredit institutions are

on the lookout for better ways to reach

rural farmers. Cooperatives can provide

that link — and cooperatives with an

engaged female membership offer these

institutions reliable borrowers. 

Research shows that female

borrowers are generally more likely

than men to make their payments on

time and repay loans in full. This access

to finance continues to strengthen

i”

knowledge about production and trade within the East Africa region,

but most of these activities were going on without specifically

incorporating 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 the

federation leaders and staff in the secretariat to write a gender policy.

The policy informs how they target both men and women in their

service provision and ensures that benefits and services are equally

distributed. Ultimately, their newly appointed gender and youth

advisor presented a draft policy to the board of directors, which they

approved. 

“The policy outlines the federation’s commitment to gender

equality and women’s empowerment at the secretariat level, where

strategic decisions are made and at the farmer level where projects

and proposals are developed. Going forward, the federation will

routinely collect and report key data by sex and age. The federation

will also ensure that services are designed to be accessible to and meet

the needs of all members, based on gender analysis to be carried out by

the secretariat.

“With the board’s commitment to the new gender policy, the

federation is prepared to put in the effort required to ensure that this

first step of developing a gender policy can result in gender

integration in activities and programs.The move by the federation to

develop and implement a gender policy will hopefully serve to

strengthen the position of female farmers throughout East Africa.
women’s ability to improve their

farming practices and invest in new and

better ways of growing their farms,

which sets them on a path to more

economic freedom and more security. 

In addition to her work with farmers

groups in East Africa, Lydia MbeviNderitu played a pivotal role in

incorporating gender in ACDI/VOCA’s

Farming as a Business training module,

which became Farming as a Family

Business. This updated gender-sensitive

approach addressed men’s under-valuing

of women’s time, skills and

contributions to farming activities. 

In Kenya, the approach led to

women taking on more on- and offfarm income-generating activities,

including kitchen gardens, poultry

production and sweet potato processing,

which increased household food

security. Farming as a Family Business

also promoted women’s participation in

farmers associations and gave them a

louder voice as leaders and change agents.

Aiding women 

farmers in Ghana 

In Ghana, the Agricultural

Development and Value Chain

Enhancement (ADVANCE) project has

worked closely with women farmers to

improve their access to services. The

project used short message services and

voice messages in local languages to

share agriculture advice, financial tips

and market information with women

farmers. 

In one area of northern Ghana, the

project trained women’s groups on

improved agricultural practices, such as

planting in rows instead of broadcasting

seed. It also connected the women with

a “nucleus farmer” — a larger farmer

who has access to markets, equipment

and inputs — who provides them with

fertilizer, improved seeds and plowing

services. After the harvest, the small

farmers repay for this help with bags of

maize. 

The women are now using improved

plant varieties and fertilizer and have

increased their yields from one bag of

maize per acre to seven-to-nine bags

per acre. The nucleus farmer also

appreciates working with the women,

who have a high repayment rate of

around 98 percent. As a result, nucleus

farmers throughout the project

intervention area started working with

more women farmers; the proportion of

participating small farmers who were

women increased to 39 percent, up

from 26 percent, over three years.

The key to achieving broader food

security is to strengthen farmer

cooperatives and federations. Such

groups provide the crucial link between

the world and the rural farmer. And

farmer cooperatives cannot be strong

when they ignore the abilities and

contributions of half of the farmers.

They can become stronger by affirming

gender equality and by embracing

women’s empowerment at all levels of

the organization. ■

The key to achieving broader food security is to strengthen farmer cooperatives and federations, according to ACDI/VOCA. But farmer co-ops

cannot 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 of

improved maize seeds) and (facing page) these vegetable growers in Angola.
30 July/August 2014 / Rural Cooperatives

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 finished

products. The co-op has taken great care in to clarify the distinct responsibilities of the worker-owners, the board of directors and the staff. Photo

courtesy Real Pickles. Cupcake photo illustration by Stephen Thompson/USDA. 
Rural Cooperatives / July/August 2014 31

By Kristin Howard

Editor’s note: This article is reprinted,

with minor changes, from Ferment, the

Real Pickles’ blog, at: realpickles.blogspot.

com, where it was originally posted. The

author is a worker-owner of the

Massachusetts-based Real Pickles co-op. 

We recently wrapped

up our fiscal year at

Real Pickles. In many

ways, it was a typical

year for the business.

Interest in fermented foods has

continued to rise, and the year was

another strong one for us. 

As is often the case, the uncertainties

of the growing season necessitated some

creative problem solving; a wet spring

in our region resulted in much less

early cabbage than we were expecting.

But in the end, we got all of the fresh

ingredients we were hoping for and

processed over 300,000 pounds of

Northeast-grown vegetables during our

production season. That’s an increase of

about 40 percent over last year! 

What was different about this past

year, however, was our business

structure. May 9 marked the first

anniversary of Real Pickles’ transition

from sole proprietorship to cooperative

ownership. It took a lot of work to

become a co-op; now the process of

running the business involves both

shared effort and reward for our new

group of member-owners. 

Some of what we encountered

during our first year was expected,

while other things took us a little more

by surprise. As an increasing number of

businesses consider transitioning to the

cooperative model, we want to share

some of our experiences so far.

Learning to be business owners

As Real Pickles made the structural

shift to becoming a co-op owned by its

employees, those of us who hadn’t

previously been owners knew we would

have to make the mental shift to

thinking like owners. Looking back a

couple of years, the process started with

a group of us who worked together to

figure out if Real Pickles’ transition to a

worker co-op made sense for the

business and for each of us as individual

potential owners. We spent quite a bit

of time on activities that served the

joint purpose of strategic planning and

practicing the art of ownership. 

Inspired by our friends at South

Mountain Company (a “cooperatively

owned design/build company” on

Martha’s Vineyard), we prepared an

exercise that encouraged us to articulate

what kind of growth we want for Real

Pickles and the possible outcomes of

different approaches for our future.

Since completing the transition, we’ve

continued this important strategic

planning work.

To further foster a learning culture

in our business, we started holding

internal classes on five core topics:

Social Mission, History of Real Pickles,

the Cooperative Movement, Finances

and Governance. While all staff people

attend, all potential worker-owners are

required to complete these classes

before becoming part of the co-op.

This has given us all a common base of

understanding of Real Pickles as a

cooperative business and some of the

tools we need to be effective business

owners. 

The need to think like owners was

highlighted when we recently were

looking at increasing certain benefits

for staff. In this case, it was starting a

Real Pickles-sponsored retirement

account, increasing our paid time off

and implementing a family leave policy.

While we as employees were, in

principle, supportive of enhancing

benefits for ourselves and our coworkers, as owners we also had to take

responsibility for the impacts of these

decisions on the business that provides

us with employment. 

When we looked at the costs in our

budget for the next year, we ended up

proceeding more cautiously, scaling

back the new benefits for the upcoming

year based on the understanding that

we will revisit this topic after we have

another year as a co-op under our belts.

We should then be able to better

envision what long-term sustainability

looks like. 

Another example of new owners

having to broaden their perspectives

came recently when it was time for the

first annual review of our general

manager. A small group of board

members was formed to conduct the

review process. 

This process of evaluating our

general manager — who is also the

business founder, hired many of us and

to whom many of us directly report —

exemplifies how the workers have had

to step up and manage multiple roles

with this new cooperative. In the end,

the review went extremely well. It was a

powerful experience for all involved and

a clear example of what makes a co-op

different from other business models.

Charting our future

Last May, as we looked forward, we

knew that if the co-op was to be

successful over time, we would have to

make worker-ownership appealing to

more staff people. We expected that

other employees would see the value of

being worker-owners, but we didn’t

expect it to happen so quickly. Even

before we officially made the transition

to a co-op, two more staff people

expressed their interest in workerownership. 

In the midst of working on our

business strategy, investment campaign,

incorporation and legal documents, we

had to scramble to articulate the “path

to worker-ownership” at Real Pickles,

with an eye to finding the balance

between making the ownership process

clear and accessible to workers while

maintaining a high level of training and

engagement for potential new

members.

We have also been careful to create

clear distinctions between the

responsibilities of the worker-owners,

the board and staff. We wrote our

bylaws with an eye to these issues but,
32 July/August 2014 / Rural Cooperatives

taking a cue from fellow worker co-op

(and fair trade pioneer) Equal

Exchange, we later also created a

governance matrix that both lays out

responsibilities from our bylaws (such as

only a consensus of all worker-owners

can amend Real Pickles’ mission). Our

bylaws also clearly communicate what

body is accountable for other areas of

the business (for example, the general

manager creates the annual budget to

be ratified by the board of directors).

This clarity of responsibilities has

served us well so far; the delineation of

authority and oversight has also helped

us to work efficiently.

For Brendan Flannelly-King, Real

Pickles’ facility manager and one of the

five founding members, much of the

work of setting up the co-op felt

abstract and he says it was often

difficult to imagine what it would be

like to be an owner. “In some ways,” he

says, “owning the business has been

easier than I had expected. It’s hard

work, but since the worker-owners as a

body aren’t involved in operations, we

have been able to really focus on

strategy.” 

As we look to our second year, we’re

working to anticipate the systems that

will help us to be even better business

owners and will help make future

decisions as clear and simple as possible.

Real Pickles and 

our community

Real Pickles as a sole proprietorship

has long had a strong network of

support within the community, and we

knew we would need to engage that

network in a variety of ways as we made

the transition to a cooperative. Soon

after our transition, we gathered a

group of community members to form

a board of advisors to help us look at

strategic planning, particularly the issue

of how to grow our business in a way

that is thoughtful and sustainable. 

This topic has provided fodder for

energetic meetings, with lots of debate

about competition, mechanization,

growth and sustainability. As workerowners, we have been inspired and

motivated by these discussions.

We have also found that the outreach

work we did throughout the months

leading up to our co-op transition has

continued to benefit us. Real Pickles’

local following has grown and become

even more dedicated — we sold over

7,000 more jars in the Pioneer Valley in

2013 than we did in 2012! It is

encouraging that worker cooperation

appears to have value not only for our

own employees, but also for customers

who can see its benefits for the wider

community. 

Central to our vision as a sustainable,

mission-based cooperative is further

engaging our community — including

the growers who supply us, the farm

stands, food co-ops, natural food stores

and other businesses that carry our

products, the people who purchase

them, the investors who helped finance

our transition, and the co-ops that have

supported 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 first

year of what we hope will be a long and

inspiring journey. A co-op is a

community effort, and we could not

have done it without you! ■

As they look to their second year as a co-op, members are working to anticipate the systems

needed to become better business owners.

“While we as employees were supportive of enhancing benefits for ourselves

and our co-workers, as owners we also had to take responsibility

for the impacts of these decisions on the business.”
Rural Cooperatives / July/August 2014 33

Newsline

Send co-op news items to: dan.campbell@wdc.USDA.gov

Co-op developments, coast to coast

GROWMARK names 

Spradlin new CEO

Jim Spradlin

has been named

chief executive

officer of

GROWMARK

Inc., effective

Sept. 16, 2014. He

succeeds Jeff

Solberg, who will

retire in

September. 

Spradlin was most recently

GROWMARK vice president of

agronomy. He has also served as

manager of the co-op’s energy and

agronomy divisions. His other positions

within the GROWMARK system of

cooperatives include controller of

Schuyler-Brown FS and regional

administrative director/general manager

of Piatt Service Co., among others. 

“Jim has the skills, knowledge,

experience and support to successfully

lead GROWMARK into the future,”

says GROWMARK Chairman and

President John Reifsteck.

Spradlin is a 1982 business

administration and economics graduate

of Illinois College, Jacksonville, Ill. He

is one of five members of the industry

advisory council for the Purdue

University Center for Commercial

Agriculture. He serves on the board of

directors for The Fertilizer Institute

and is a former local director of Rotary

International.

“GROWMARK and its FS member

companies have a long-standing

reputation as a progressive and reliable

supplier of quality products and

The 17th

Annual Farmer

Cooperatives

Conference,

Nov. 6-7 in

Minneapolis, will provide a unique

opportunity to hear cooperative

leaders assess their business

environment. 

Among the speakers will be Åke

Hantoft, Swedish farmer and board

chair of Arla Foods, Denmark, who

will discuss Arla’s European

expansion and the development of a

governance system across

countries. Other confirmed speakers

include: Michael Boland, professor

and director of the University of

Minnesota Food Industry Center;

Terry Fleck, executive director of the

Center for Food Integrity; Andrea

Bonime-Blanc, CEO and founder of

GEC Risk Advisory; Phil Kenkel,

professor at Oklahoma State

University; Greg Wickham, senior

vice president for business

development, DFA; and Patrick

Hessini, CHS vice president for

transportation and distribution.

Topics will include:

• Exploring Non-qualified and

Unallocated Equity — Are these

alternative strategies the right

choice for your cooperative? What

is the right balance between

growth and member-owner rights?

• Assessing and Managing Risks in

the Global Market — Participants

will assess risks faced by

cooperatives and will leave with

the tools to better understand and

act on these risks. 

• Incorporating Sustainability Into

Strategic Plans — Industry experts

will relate how to develop a longterm sustainability strategy. 

• Food, Agriculture and Consumer

Trust — Cooperatives will learn

about new consumer trends,

implications for the ag industry and

steps to rebuilding the public’s trust

through transparency.

• Transportation, Infrastructure and

Impacts — Industry experts will

assess the impact of transportation

challenges on the distribution

system. Co-op leaders will share

their unique experiences in

overcoming transportation and

logistical challenges.

• Evaluating Risks and Benefits of

Big Data — This session will

explore trends and impacts of big

data on farmer co-ops.

For more information, visit:

www.uwcc.wisc.edu, or e-mail Anne

Reynolds at: atreynol@wisc.edu. ■

Critical co-op issues to be explored Nov. 6-7
34 July/August 2014 / Rural Cooperatives

services, for being easy to do business

with, and for its highly trained

employees who operate with integrity,”

Spradlin says. “It is truly an honor to

have the support of the GROWMARK

board of directors as we work together

to guide the GROWMARK system.” 

GROWMARK is a regional

cooperative with annual sales of $10.1

billion. It provides agronomy, energy,

facility planning and logistics products

and services, as well as grain marketing

and risk management services in more

than 40 states and Ontario, Canada. 

Agreement to boost 

Kenya’s co-op sector 

An agreement signed June 4 by

NCBA/CLUSA and the government of

Kenya solidifies the co-op trade

association and international

development organization’s leadership

in Kenya’s cooperative sphere. The pact

is also expected to better position

NCBA/CLUSA for future work in the

country. Cooperatives in Kenya are at

the forefront of enhancing productivity

in agriculture while fighting poverty

and promoting economic and social

equity.

At a ceremony in Nairobi, Mike

Beall, CEO and president of

NCBA/CLUSA, and Wilson Songa,

executive secretary of Kenya’s Ministry

of Industrialization and Enterprise

Development, signed a memorandum of

understanding, which had been a year

in the making. 

“Both NCBA/CLUSA and the

Kenyan government are committed to

the development of rural communities

through cooperative development,

capacity-building, enhanced food

security and livelihood improvement —

especially among women and young

people,” says Amy Coughenour, the

association’s chief operating officer for

international development.

About 70 percent of the population

of Africa is under age 30, making young

people a key demographic to engage in

development, Beall says. NCBA/

CLUSA has been active in Kenya since

2001, creating and implementing

development projects that strengthen

rural enterprises and facilitate access to

improved health services, food

production, information and products

that lead to increased profitability and

competitiveness in food security 

and health. 

Currently, NCBA/CLUSA heads Yes

Youth Can!, a project that grooms

thousands of disadvantaged young

people for future employment,

entrepreneurship and community

leadership. It also implements the

Cooperative Development Program in

Kenya, which enlists cooperatives to

advance food security and nutrition for

mothers and children under the age of

five. 

Beall was also among a team of

program facilitators and mentors in

Nairobi helming the first-ever,

continent-wide African Cooperative

Development Education Training

program. The focus was on savings and

credit cooperatives (SACCOs) as key

players in sustainable community

growth. 

Beall also traveled to Mombasa, on

the Kenyan coastline, to meet with a

group working to save money at the

local SACCO to help build small

businesses. They have launched a

motorbike taxi service, a barbershop, a

cinema, a video game arcade and a

“chip (French fry) shop” in Mombasa. 

Beall also met with a group of

community health volunteers who

follow cooperative principles. The

volunteers undergo training by

NCBA/CLUSA staff and partners, then

work within their local communities to

raise awareness of HIV prevention, safe

birthing practices and other health

issues.

I Love My Farmers 

Market celebration

American Farmland Trust’s (AFT) I

Love My Farmers Market celebration is a

summer-long effort asking consumers

to champion their local family farmers

by shopping at a nearby farmers market,

many of which are cooperatives. You

can vote for your favorite farmers

market until midnight on Sept. 13.

AFT says supporting family farmers

helps them to steward and protect their

land from development. The 100 Most

Celebrated Farmers Markets will be

showcased on a continuously updated

NCBA/CLUSA President/CEO Mike Beall (left) and Wilson Songa, executive secretary of Kenya’s

Ministry of Industrialization and Enterprise Development, sign an agreement formalizing the role

of Beall’s organization in helping to boost Kenya’s co-op business sector. Photo courtesy

NCBA/CLUSA
Rural Cooperatives / July/August 2014 35

The rescue of a herd of 176 alpacas

in dire need on an Oregon farm was

coordinated earlier this year by Cross

Creek Alpaca Rescue. Outraged by the

poor condition of the animals, the

Columbia Alpaca Breeders Association

(CABA), the Northwest regional

affiliate of the Alpaca Owners

Association Inc. (AOA), donated more

than $6,500 toward the care of the

rescued alpacas, which were housed

at the Oregon State University School

of Veterinary Medicine. 

AOA members throughout North

America have made further donations

for the care of the animals. As of early

July, all of the alpacas had been

placed with new owners, except for

two that will become part of the

university’s herd. 

The exact circumstances that led to

such dire conditions for the herd are

uncertain, but the situation

underscores the need for continued

education to help prevent similar

situations from occurring, AOA says. 

The alpaca industry has grown

steadily in North America during the

past 30 years, numbering about 230,000

registered animals at present. But it is

not a “get rich quick with a part-time

job” venture, AOA stresses. Many

people make a successful living in the

industry but, as with any business,

research and hard work are necessary.

A good way to start researching the

business is to talk with other alpaca

ranchers in your area. A listing of

farms can be found at:

www.alpacainfo.com. A helpful

repository of information about alpacas

can be found at: www.

ariACADEMY.com.

“Learn from someone with

experience and integrity,” says Lona

Nelsen Frank, owner of ALPACAS of

Tualatin Valley LLC in Beaverton, Ore.

“Buy your first alpacas from someone

who will mentor you 24/7 — not just at

the point of purchase, but in the

future.” Another great way to learn

about the industry is to attend alpaca

shows and events.

Thomas and Connie Betts of

Cascade Alpacas of Oregon in Hood

River, Ore., say a well thought-out,

detailed business plan has helped them

to succeed. “Keep focused on your

goals and pay attention to cash flow

and expenses. It is important to not go

into debt, in case things don’t turn out,”

Connie Betts says. “From the

beginning, we were prepared for

worst-case scenarios.”

Beth Osborne of the Alpaca

Hacienda in Temecula, Calif., originally

concentrated solely on breeding highend stock. Her focus today is to be an

asset to her community by providing

jobs, hosting community events and

tours and by providing community

service hours for high school students.

She sells handcrafted alpaca-fiber

products at her farm store and boards

alpacas at her ranch to earn additional

income.

AOA, based in Lincoln, Neb., is the

largest alpaca association in the world.

It facilitates the expansion of a strong,

sustainable alpaca industry through

the tracking of bloodlines, registration,

education, the national show system,

marketing and public relations. For

more 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 for

fashion 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
36 July/August 2014 / Rural Cooperatives

scoreboard at: http://lovemyfarmers

market.org/, where you can also go to

vote. The final Top 100 will receive a

special seal to place on their outreach

materials. 

Co-op promotes 

SweeTango apples 

Growers of SweeTango apples are

planning a “full-on retail campaign”

this fall featuring an interactive map

populated with retail locations,

provided by consumers’ Tweets and

texts. Growers are capitalizing on the

apple’s short season, called a “hyperseason,” to encourage consumers to get

into the “sweet spot of apple season”

with SweeTangos, according to a co-op

news release. The apple is available only

from September into November. In

2013, the entire crop sold out in 60

days.

Only growers who are members of

Next Big Thing, a growers’ cooperative

in Lake City, Minn., are allowed to

grow the SweeTango, developed by

using traditional plant crossbreeding

techniques. Co-op members share their

expertise with each other to refine

methods for growing, harvesting and

shipping this new variety.

Apple breeders at the University of

Minnesota spent more than a decade

developing the Minneiska cultivar, the

apple tree that produces SweeTango. In

1908, the University of Minnesota

created the Fruit Breeding Farm, now

known as the Horticultural Research

Center, on 80 acres near Victoria,

Minn. During the next century, the

farm grew to become a center of fruit

research and breeding, particularly for

northern climates. Apple varieties that

have been named and released by the

university 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 last

year at a restaurant in Los Angeles. The apples are grown by the Next Big Thing cooperative. Photo by David McNew
Rural Cooperatives / July/August 2014 37

Honeycrisp and Zestar.

The cooperative has traditional retail

tools available, including recipe cards

and signage. The Sweet Spot campaign

is also scheduled to include social media

contests and giveaways via SweeTango

channels.

Illinois grain co-op 

to merge with CHS 

Members of Carrollton Farmers

Elevator, a grain cooperative based in

Carrollton, Ill., in early June approved a

merger with CHS Inc., the nation’s

largest farmer-owned cooperative. The

proposal passed with a 75-percent

approval and will become effective in

September, pending approval by the

CHS board and appropriate due

diligence by both organizations.

Carrollton Farmers Elevator has

served the grain merchandising and

handling needs of farmers in

southwestern Illinois since 1918. Upon

completion of the merger, the

Carrollton operation will join with the

current CHS Country Operations

business unit based in Lowder, Ill.

“The Carrollton Board has always

worked hard to maintain a strong

balance sheet, so we could take

advantage of opportunities like this

one,” says Rick Steinacher, Carrollton

Farmers Elevator board chairman.

Chris Howard will serve as location

manager under the new business,

reporting to CHS-Lowder General

Manager John Bender.

In other CHS news, Gleadell

Agriculture Ltd., in Lincolnshire,

England – the United Kingdom’s third

largest agricultural trading and

distribution company — and CHS

Europe Sarl, a division of CHS Inc.,

have entered into an agreement under

which CHS will provide global fertilizer

sourcing, mainly granular urea, to

support Gleadell’s ag supply chain. 

CHS Europe Vice President and

General Manager Roger Baker said the

partnership is part of the cooperative’s

focus on global fertilizer distribution

expansion. 

Diglio new GM 

at Michigan Milk 

Michigan Milk Producers

Association (MMPA), Novi, Mich., has

named Joe Diglio as the cooperative’s

new general

manager. Diglio

has been serving

as acting general

manager since

May. 

Diglio has 23

years of

experience with

MMPA, serving

most recently as the director of finance

and controller. He has served in a

variety of capacities in the accounting

department. He holds a bachelor’s

degree from Wayne State University

and is completing a master’s degree in

management at Walsh College.

“We believe Joe’s extensive

knowledge of the co-op’s operations and

management will provide a solid

foundation as he takes over the

leadership of the MMPA team,” says

Ken Nobis, dairy farmer and MMPA

president. “We are excited about the

opportunities we see on the horizon for

MMPA, and we have the utmost

confidence in Joe and the rest of the

MMPA staff.”

As MMPA general manager, Diglio

will lead 200-plus employees, providing

milk marketing services to dairy farmers

in the Great Lakes region. MMPA

operations include milk processing

facilities in Ovid and Constantine,

Mich. During the last fiscal year,

MMPA marketed more than 4 billion

pounds of milk for its 2,000 farmerowners in Michigan, Wisconsin, Ohio

and Indiana.

USDA investments help 

grow rural businesses

Agriculture Secretary Tom Vilsack in

May awarded loans and grants to

organizations in 14 states to support

rural infrastructure, job creation and

business development. 

“Our small rural businesses need

first-class infrastructure to be worldclass competitors in the global

economy,” Vilsack said. “To achieve our

community-based development goals,

USDA is investing in the infrastructure

of the rural economy by providing loans

and grants to local partners who can

leverage the funds with other financing

for projects that have broad economic

impacts.” 

The funding is being provided

through USDA’s Rural Economic

Development Loan and Grant

(REDLG) program. Under this

program, USDA provides zero-interest

loans and grants to utilities that lend

funds to local businesses for projects to

create and retain employment in rural

areas. The revolving loan funds broaden

the program’s reach and create a

multiplier effect for its impact. 

The funding will help organizations

such as the Benton Rural Electric

Association in Washington, which will

use a $750,000 loan and a $300,000

grant to expand the wastewater

treatment facility at the port of

Sunnyside. This project serves valueadded agricultural processing facilities

in the Pacific Northwest. With

improvements made possible by this

investment, 50 jobs will be created and

263 others will be saved. 

The Southern Pine Electric Power

Association in Taylorsville, Miss., is

receiving a $2 million loan that will be

used to help Polk’s Food Products

remodel internal refrigerant and

process-control systems at its 50,000-

square-foot plant in Magee, Miss. The

project will help save 115 jobs in

Simpson County, a persistent poverty

area. 

USDA is assisting Simpson County

through its StrikeForce Initiative for

Rural Growth and Opportunity, an

effort launched in 2010 to reduce

poverty by increasing investments in

rural communities through outreach

and stronger partnerships with

community leaders, businesses,

foundations and other groups working

to combat poverty. 

In total, Vilsack announced $22.3
38 July/August 2014 / Rural Cooperatives

million in loans and grants for REDLG

projects in 14 states. 

Second Harvest opens

distribution center 

Second Harvest of South Georgia

recently opened a 65,000-square-foot

regional distribution center in

Thomasville, Ga. Second Harvest is the

state’s largest rural food bank, serving

30 Georgia counties. More than 90

percent of its service area has

experienced high poverty rates in recent

years.

The new distribution center was

financed through a $5.2-million

Community Facilities loan from USDA

Rural Development. The center

includes a commercial kitchen and an

indoor/outdoor marketplace. The

center also triples the organization’s

storage capacity to a total of 5 million

pounds of food.

Second Harvest is also positioning

itself to become one of the country’s

more than 300 food hubs, which

aggregate and distribute local foods. As

a food hub, Second Harvest will help

open up new markets for farmers and

increase availability of local foods. A

weekend farmers market will connect

farmers directly to consumers, who can

buy fresh, local produce on site. 

Second Harvest’s farmers market will

join 4,000 others nationwide that accept

SNAP (Supplemental Nutrition

Assistance Program benefits, formerly

called food stamps).

Education is key to Second Harvest’s

efforts. Children and adults can “get

their hands dirty” learning about

gardening at its onsite “food forest.”

Nutrition classes will teach kids about

the importance of fruits and vegetables

for a healthy diet.

Food banks that provide marketing

assistance, storage, aggregation and

distribution services are popping up all

over the country, says Elanor Starmer,

senior advisor to Secretary TomVilsack

for local and regional food systems. She

cites New York’s Foodlink and Food

Bank of North Alabama as examples of

operations that are integrating local

food into their service programs and

product mix. 

“Turning food pantries into local

food hubs is a win-win for producers

and consumers and is helping rebuild

local economies,” Starmer adds. To

learn more about USDA programs for

food banks, visit: www.usda.gov and

enter “Know Your Farmer” in the

search box. 

Iowa co-op producing

cellulosic ethanol

Quad County Corn Processors

(QCCP), a farmer-owned cooperative,

is now producing cellulosic ethanol at

its plant in Galva, Iowa. An $8.5-

million distillation unit is enabling the

co-op to convert corn kernel fiber into

cellulosic ethanol, in addition to

traditional corn-starch ethanol,

according to a report in the Sioux City

Journal. 

The process, developed by the coop, involves converting and processing

more from each kernel of corn, co-op

CEO Delayne Johnson says. “Through

hard work and forward-thinking

innovation, we’re excited to be the first

cellulosic ethanol producers in Iowa,”

Johnson said in a an announcement

from the co-op. “Our Adding Cellulosic

Ethanol (ACE) project will not only

increase our plant’s production capacity

by 6 percent, but it will also continue to

boost energy security and provide

consumers with more low-cost, cleaner

burning ethanol without adding any

additional corn to the production

process.”

The 35-million-gallon-per-year plant

will use the corn kernel fiber to produce

an 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 to

increase the amount of corn it buys. 

The co-op’s roots go back to 2000,

when six northwest Iowa producers

formed Quad County Corn Processors

and signed an option to buy 102 acres

of land south of Galva. They started

fundraising to build an 18-milliongallon ethanol plant. In just six weeks,

more than 420 Iowa farmers invested in

this value-added project.

In February 2002, the first load of

ethanol was transported out of the plant

by truck. Thirteen years later, QCCP

employs 35 people who operate the

plant 24 hours a day, producing up to

100,000 gallons of ethanol daily. 

USDA funding supports

bioenergy research 

Agriculture Secretary Tom Vilsack in

June announced up to $14.5 million in

funding for two USDA bioenergy

programs, made available through the

2014 Farm Bill. USDA Rural

Development announced that it is

accepting applications from companies

seeking to offset the costs associated

with converting fossil fuel systems to

renewable biomass fuel systems.

USDA’s National Institute of Food and

Agriculture (NIFA) announced the

availability of $2.5 million in grants to

enhance national energy security

through the development of bio-based

transportation fuels, bio-power and new

bio-based products. 

At the same time, USDA also

announced a valuable new aid for bioenergy businesses: the Bioeconomy

Tool Shed. The Tool Shed is a portal

offering users access to a complement

of web-based tools and information,

statistical data and other resources

related to the sustainable production

and conversion of biomass into

products and fuel, a process often

referred to as the bioeconomy. 

USDA plans to make up to $12

million in payments for eligible biorefineries through Rural Development’s

Repowering Assistance Program, which

Rural Cooperatives / July/August 2014 39

The Cooperative Development Foundation (CDF) recently inducted a new group of “co-op heroes” into the Cooperative

Hall of Fame. The 2014 inductees are (from left): Papa Sene, who helped spread co-op values globally during his three

decades as senior technical advisor for NCBA/CLUSA; Harriet May, who led the effort to make home ownership more

affordable 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 has

been a strong advocate of the co-op business model for more than 30 years; and Barry Silver, executive vice president of

National Co-op Bank, who for 33 years has helped thousands of co-ops secure financing. For more information about

these and past inductees, visit: www.heroes.coop. Photo courtesy CDF 

Hall of Fame, Class of 2014
40 July/August 2014 / Rural Cooperatives

was reauthorized by the 2014 Farm Bill.

Bio-refineries in existence on or before

June 18, 2008, are eligible for payments

to replace fossil fuels used to produce

heat or power with renewable biomass.

The deadline for applications is

September 15, 2014. For details on how

to apply, see page 34,280 of the June 16

Federal Register. 

USDA is also seeking applications

for NIFA’s Sun Grants program that

encourages bioenergy and biomass

research collaboration between

government agencies, land-grant

colleges and universities and the private

sector. The program provides grants to

five grant centers and one sub-center,

which then will make competitive

grants to projects that contribute to

research, education and outreach for

the regional production and

sustainability of possible bio-based

feedstocks. The project period will not

exceed five years.

Nebraska co-ops to merge 

The boards of Central Valley Ag

Cooperative (CVA) and United Farmers

Cooperative (UFC) met July 1 to ratify

votes cast by their respective memberowners, approving the merger of the

two co-ops, effective Sept. 1, 2014. In a

joint announcement, the two co-ops

said the vote was “overwhelmingly in

favor” of the merger. Nebraska law

requires two-thirds of the votes to be

cast in favor of such a proposal in order

to be ratified.

The unified cooperative will retain

the Central Valley Ag name and will be

headquartered in York, Neb., with Carl

B. Dickinson serving as CEO. CVA had

sales of $687 million in fiscal year 2013

with a local net profit of $13.5 million.

UFC had sales of $709 million in fiscal

2013, with a local net profit of $9.8

million. The combined co-op would

have ranked as the 21st largest ag co-op

in the nation in 2013. 

The new CVA will consist of 66

locations across eastern Nebraska and

northern Kansas with more than 800

employees. The cooperative offers a

wide range of products, services,

information and innovation through its

agronomy, energy, feed and grain

divisions. 

“I am very pleased that the patrons

of both cooperatives entrusted the

vision and due diligence of their board

members and leadership teams to

approve their recommendation to

merge two strong cooperatives focused

on creating value for our customers,”

says Dickinson. “The new CVA will

provide the opportunity for expanded

services and facilities, increased savings

and accelerated equity redemptions for

the benefit of our member-owners. We

also expect to be able to attract and

retain the best employees.”

Initial merger discussions between

the co-ops began in early 2013, with the

respective boards meeting in March

2014 to unanimously approve the

merger plan that was later put to a vote

by the members. 

Doug Derscheid, current CEO of

CVA, says that in his 44 years of

cooperative employment, including 38

in CEO positions, he has witnessed

many mergers and acquisitions. “But

this one is undoubtedly the very best, in

every measurement. Very exciting times

are in our future.”

CVA was formed in 2003 by the

combination of Agland Co-op of

Oakland, Central Farmers Cooperative

of O’Neill, and Tri Valley Cooperative

of St. Edward. CVA merged with

Northeast Cooperative in 2005, adding

nine locations, and later that year

purchased the assets of Precision

Agronomy LLC and continued business

through their seven locations.

UFC was created in 2001 from the

merger of United Co-op Inc. of

Hampton, Farmers Cooperative

Association of York, and Farmers Co-op

Business Association of Shelby. In 2005,

UFC acquired the Greenleaf, Haddam,

Linn, and Washington locations in

Kansas, with a number of other

acquisitions being made prior to the

current merger.

Policinski honored as 

‘Master Entrepreneur’

Land O’Lakes Inc. President and

CEO Chris Policinski was named the

2014 Master Entrepreneur of the Year

in the Upper Midwest by Ernst &

Young (EY). EY says the prestigious

award honors business leaders in 145

cities across 60 different countries

around the world. 

EY says this is its 28th year of

“recognizing inspiring people and their

contributions, specifically innovative

entrepreneurs who show success in

financial performance and personal

commitment to their businesses and

surrounding communities.” 

“It’s a great honor to accept this

award, but the true champion of

entrepreneurship at Land O’Lakes is

our dedicated workforce, who

contribute their efforts each day to

bring our vision to reality,” says

Policinski. “Their innovative thinking

drives great work that is helping to feed

a growing global population and positively

impacting the world in many ways.”

The Upper Midwest region of the

program encompasses businesses based

in Minnesota, the Dakotas, Iowa and

Nebraska. ■

The East Hub facility of Nebraska’s Central Valley Ag Cooperative (CVA), which will merge with

United Farmers Cooperative, effective Sept. 1. The merged co-op would have ranked as the

nation’s 21st largest ag co-op last year. Photo courtesy CVA 
Rural Cooperatives / July/August 2014 41

of how its famous brand would be used

in marketing foreign oranges. 

Sunkist’s adoption of offshore

sourcing is an example of how

cooperative leadership can achieve a

member consensus. The process was

aptly described as: “The changes being

made at Sunkist are evolutionary, not

revolutionary” (Smith).

Adopting policies for trading

foreign-sourced commodities is an

example of how agricultural

cooperatives gradually develop a

member consensus. Although foreign

trade is a particular issue that most

cooperatives do not confront, it

demonstrates a process of leadership in

working with members that is

applicable to many issues. 

Building consensus

Cooperative leadership involves

effective communication with an

informed membership. Members are

neither followers nor obstructionists.

They are an important part of decisionmaking in that they must understand

how the cooperative operates and why

it has to address changes in its industry. 

While the manager needs foresight

to identify impending changes, the

directors work to make such strategic

changes appropriate for the cooperative

and understood by members. Leading a

cooperative is a multi-faceted

enterprise, and successful leadership is

usually not the exclusive

accomplishment of one person.

Consensus is often regarded as the

prevailing view of a group. In a

cooperative, consensus provides the

cohesiveness for members to want to

continue their membership. At any

point in time, a member consensus may

not reflect what a cooperative needs to

do for economic survival. When

management and directors see a need

for change, an important part of their

leadership is building a consensus for

major decisions to be made. ■

References

• Dusek, Rick, (2013) Harvesting Global Grain

Opportunity, Presentation at USDA Agricultural

Outlook Forum, February 22.

• Hoyt, Ann (1995) “Creating Boards That

Lead,” The Cooperative Grocer, June-July.

• Reynolds, Bruce (1980) Producers Export

Company: The Beginnings of Cooperative Grain

Exporting, USDA/ESCS/Farmer Cooperative

Research Report 15.

• Smith, Claire (2003) “New global strategy—

Year-round citrus demand has Sunkist tapping

foreign market supplies,” Rural Cooperatives,

September-October.

• Thurston, Stanley K., et al (1976) Improving the

Export Capability of Grain Cooperatives,

USDA/Farmer Cooperative Research Report

34.

• Wadsworth, James (2014) “A Two-Way Street:

Members must fulfill responsibilities to their

co-op,” Rural Cooperatives, July –August.

Directors need

the skill to use member

input to improve decisionmaking, while preventing

diverse views from

becoming a source of

divisiveness.

the northeast Ohio region, he added,

citing “The 25 Percent Shift,” a report

posted at www.neofoodweb.org. 

In addition to supplying fresh

produce, meat, cheese, eggs and a

variety of value-added products to

families, restaurants and other

businesses, the co-op is participating in

a farm-to-school program that includes

12 schools districts. The next step in

expanding institutional buyer networks,

according to Melissa Miller, Lake-toRiver marketing manager, is a

workplace wellness initiative where a

local autoworkers union will cooperate

in launching a healthy food box initiative that includes on-site delivery from

the Online Ordering System of L2R. 

The co-op has also worked to create

a corner store initiative through

collaborations with three retail food

stores located in “food deserts” within

the co-op’s market area and has learned

the many challenges to improving lowincome household purchasing and

dietary habits.

The institutional sales effort includes

a partnership with the Sisters of

Humility of Mary Health System,

where in-hospital farmers’ markets are

part of a Healthy Food Rx program,

which helps finance food purchases for

obese and diabetic patients. The

Humility of Mary order also owns a

convent farm.

The Villa Maria convent is

celebrating its 150th anniversary this

summer. The Sisters of the Humility of

Mary oversees 726 acres in western

Pennsylvania, including a 280-acre

farm. The Villa Maria convent is a

member of the Lake-to-River Food Coop. As much as 50 percent of the

produce grown on the farm is given to

the less advantaged through local food

banks, shelters and parishes. 

The farm also grows grain and hay

and operates a community-supported

agriculture service, which has a waiting

list at present. It also operates an onfarm market, maintains a herd of beef

cattle (all feed is grown on the farm),

has a small flock of sheep and operates a

large, year-around greenhouse. Land

management at the farm “is based on

spirituality, sustainability, simplicity and

the preservation of all local life systems.”

It is farms such as this that are

helping Lake-to-River Co-op rebuild

“an abundant local food source with

new, old, urban and rural co-ops,”

Converse said. ■

The Privileges of Membership

continued from page 13

Co-ops: leadership with a

difference

continued from page 9
42 January/February 2014 / Rural Cooperatives
Rural Cooperatives / January/February 2014 43
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