Selecting a Cooperative

Membership Structure

for the Agriculture-of-theMiddle Initiative

Research Report 216

i

Abstract This study explores choices of cooperative structure — local, centralized, or federated

— for mid-size farms, also referred to as the “agriculture-of-the-middle” (AOTM) or

farms of “the disappearing middle.” They are referred to as “in the middle” structurally

(in terms of numbers and production output) because they are positioned between

large industrialized farms and much smaller farms located near metropolitan areas.

The largest farms have increased in numbers as well in the proportion of total U.S.

farms..These farms fit the large-scale, industrialized and commodity-production farm

model. The smallest farms have increased in numbers and output as well and are generally specialized for “local” and organic markets. The financial stability of many farms

in the middle is tenuous. They generally have both too much output and are too distant

from metropolitan areas to take advantage of the niche markets that the smallest farms

have been able to access. While further industrialization and increasing scale may be

an option for some, for most it is not desired and/or possible financially. “Middle farms”

are a focus for different interest groups-including farmers, food wholesalers and retailers, university and government personnel, non-government organizations (NGOs),

independent certification organizations and rural and community development experts-

-seeking to protect and expand farm viability. Their strategies are generally organized

to develop niche-specified, differentiated products that encompass various sustainability agendas (economic, social, and environmental sustainability). These initiatives are,

in fact, budding collective actions that seek to mobilize AOTM farmers for survival. This

report argues that the historical conditions setting the context for this mobilization cannot be taken lightly. The report, therefore, reviews the historically based changes that

have occurred in the agricultural context--i.e., shifts in agricultural production, changes

in agribusiness complexity, and changes in consumption patterns--and understands

these changes as the historically set conditions that the AOTM initiatives must accommodate in their development strategies. From this socio-historical context, the paper

assesses different cooperative membership structures--local, centralized, and federated--for their appropriateness to the collective action initiatives of the mid-level farms.

Key words: agriculture-of-the-middle, cooperatives, mid-size farms, disappearing middle, sustainability, federated cooperatives

Rural Development — Cooperative Programs,

Research Report 216

March 2009

The views expressed in this report are those of the author and do not necessarily

reflect the positions or policies of the U.S. Department of Agriculture or its other

employees. Portions of the report have been presented previously as “The Agriculture

of the Middle Initiative” to audiences at professional meetings in the U.S. and Canada,

and will appear on the University of Saskatchewan's Cooperative Center web-page.

The U.S. Department of Agriculture does not, nor do any of its employees, endorse

any company, company product, or brand name mentioned in this report. The author

wishes to acknowledge Charisse Sary, Paul Lasley and the late Eileen Stommes for

their technical and conceptual assistance.

Cover photos courtesy (clockwise from upper left): Country Natural Beef; New Mexico

State University; University of Wisconsin; Paulette Phlipot Photography; New Mexico

State University; Paulette Phlipot Photography.
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Preface This paper was written in concert with the Renewing Agriculture of the Middle Task

Force (see www.agofthemiddle.org). The task force has noted:

More than 80 percent of farmland in the United States is managed by farmers whose

operations fall between small-scale farms with access to direct markets, and large,

consolidated, and increasingly industrialized farms. These farmers are increasingly left

out of the food system. If present trends continue, these farms, together with the

social, economic, and environmental benefits they provide, will likely disappear in the

next decade or two. The public good that these farms have provided in the form of land

stewardship and community social capital will disappear with them (www.agofthemiddle.org).

This paper has two major foci: (1) the tasks of the agriculture-of-the-middle (AOTM)

initiative; i.e., its economic, sociological and ecological agendas, and (2) agricultural

cooperatives (and their structures) as an option for AOTM development. Cooperatives

are formed from within preexisting socioeconomic and historical conditions. AOTM

farms (and their potential marketing outlets) exist within this historical context. This

paper reviews these conditions, and presents them as a context that must be considered prior to any cooperative mobilization. Cooperatives themselves have various

internal trade-offs and tensions (business emphasis versus democracy, for example)

that are expressed differently, depending upon pressures on the organization. Given

AOTM agendas, the historical context and cooperative tensions, the purpose of the

paper is to identify cooperative forms--local, centralized, and federated--that recommend themselves for AOTM development. The sub-functions of an economic system--

production, distribution, consumption--are utilized to sort the various pre-mobilizing

conditions. These considerations are presented in three sections: Section I: Socio-economic Context: Pre-mobilizing Conditions; Section II: Cooperative Organization; and

Section III: Considering Cooperative Structures and Dilemmas.
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Contents Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .iii

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

Co-ops a Probable Model, But Not Without Problems . . . . . . . . . . . . . . . . . . . .1

Section I: Socio-Economic Context: Pre-mobilizing Conditions . . . . . . . . . . . . . . . . .2

Contours of a Sustainable Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

Industrialization of Production and Conglomeration of Agro-Food Firms . . . . . . . . . .3

The Historical Shifts in Consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

Labor/Family Consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

Construction of the High Modern Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

Reaction: Consumption and Social Movement Desire . . . . . . . . . . . . . . . . . . . .6

Summary of the Socio-Economic Context and Pre-mobilizing Conditions . . . . .7

Section II: Cooperative Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

Cooperative Dilemmas/Tensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

Successful Cooperative Mobilizations: Organizing “To Have” . . . . . . . . . . . . . .9

Organizing Both for Fair Share “To Have” and Identity “To Be” Struggles . . . .10

Section III: Considering Both Cooperative Structures and Dilemmas . . . . . . . . . . . .11

Individualism, Collective Action, and Voluntary Participation . . . . . . . . . . . . . .11

Local Cooperatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

Centralized Cooperatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13

Federated Cooperatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
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Highlights This study explores choices of cooperative structure — local, centralized, and federated-for mid-size farms, also referred to as “agriculture-of-the-middle” (AOTM) farms or

farms of “the disappearing middle.” They are referred to as “in the middle” structurally

(in terms of numbers and production output) because they are positioned between

large industrialized farms and much smaller farms located near metropolitan areas.

The largest farms have increased in numbers, as well as in the proportion of total U.S.

output accounted for by their aggregate production. These farms fit the large-scale,

industrialized and commodity, production farm model. The smallest farms have

increased in numbers and output as well and are generally specialized for “local” and

organic markets. The financial stability of many farms in the middle (also referred to as

death zone farmers) is tenuous. They generally have both too much output and are too

distant from metropolitan areas to take advantage of the niche markets that the smallest farms have been able to access. While further industrialization and increasing

scale may be an option for some, for most it is not desired and/or possible financially.

“Middle farms” are a focus for several different interest groups — farmers, food wholesalers and retailers, university and government personnel, NGOs and independent

certification organizations, rural and community development experts — seeking to

protect and expand farm viability. Their strategies are generally organized to develop

niche-specified, differentiated products that encompass various sustainability agendas

— i.e., economic, social, and environmental sustainability. These initiatives are in fact

incipient collective actions that seek to mobilize AOTM farmers for survival. This report

argues that the historical conditions setting the context for this mobilization cannot be

taken lightly. And if a cooperative model is used in the mobilization, then contextual

conditions suggest a particular cooperative membership structure be used — i.e., federations.

The report is presented in three major sections. In Section I, an outline of sustainable

agriculture is presented, followed by the pre-mobilizing conditions of cooperative formation — i.e., the socio-economic context. Essentially, the interests of the agriculture

of the middle must contend with, accommodate, and/or oppose the tendencies of an

advanced investment-oriented economy that has resulted in the concentration and

centralization of agricultural production into fewer and larger farm units; the organizational conglomeration-strategies of agri-business firms that consolidate and expand

market positions through vertical and horizontal integration; and, food consumption

that reflects consumers' needs for nutrition, but also other needs, such as soothing,

status, and promises of safety and permanence. 

In Section II, various tensions and dilemmas are presented as inherent to cooperative

organization — e.g., bureaucracy versus participation, individualism versus collectivism, business efficiency versus participative democracy, and grass roots wisdom

versus managerial expertise. These tensions act as tipping points, and shifts can occur

incrementally from one position to another depending upon various influences, and in

particular stressors in the business environment. Historically most agricultural cooperatives have tended to shift in the direction of bureaucratic solutions, efficiency, and the

sacrifice of grass-roots wisdom. Farmer survival as a group (mutual collective-benefits)

has tended to be sacrificed in favor of individual collective-benefits (e.g., price).

Further, while most established agricultural cooperatives were originally organized

over struggles of “fairness” in the market place, most contemporary cooperatives (and

social movements) are organized around struggles over identity. 
vi

Section III assesses three different examples of membership structures — local, centralized, and federated — in the context of (a) historic socio-economic changes in production, agri-business organization, and consumption (as outlined in Section I); and (b)

the inherent tensions in cooperative organizations and the character of cooperative

development historically (as outlined in Section II). Considering socio-economic context, history, and tensions, federated cooperatives seem a likely choice for the agendas of mid-size farms. The cooperative model, particularly the federated co-op, may

have the capacity to empower mid-level farmers by providing an outlet for their volume, the organizational capacity and scale to compete with much larger organizations,

the ability to provide standardization and coordination, and a “local” democratic

process that can engender and promote grass-roots creativity, responsiveness, and

local identity. However federations must be chosen and monitored with caution, given

their inherent capacity (like all cooperative types) to shift along the various internal tensions that are intrinsic to their structure (e.g., bureaucracy versus democracy, shortterm returns versus long-term service, and efficiency versus participation).
Selecting a Cooperative Membership

Structure for the Agriculture-of-the-Middle

Initiative

Thomas W. Gray, Ph.D.

Rural Sociologist

USDA Rural Development

Cooperative Programs

Washington, D.C.

Introduction

The agriculture-of-the-middle initiative is a bottom-up, multi-centered ensemble of interests that is

loosely organized around community/sociological,

economic and ecological concerns of sustainability.

Lyson (2004) and Lyson and Green (1999) argue that

over the last two decades, two parallel food and agriculture systems have evolved: one progressively large

scale and vertically integrated into a global and corporate food system; the other composed of much smaller

and more diverse farms oriented primarily to local and

regional markets. Between these extremes are farms of

the middle. Farmers in this middle range essentially

seek to survive by finding a viable place between a

food-production system that rewards increasing

industrialization and scale, and a much smaller system

that rewards low cost, small volume and niche specialization.

These middle interests have two organizing

tasks: (1) to build their economic viability while holding ground against some of the most fragmenting and,

simultaneously, ordering socio-economic dynamics in

our late-modern age (e.g., Fordist industrialization,

corporate conglomeration, elite globalization, technology that creates redundancy among farmers and communities, and constructed consumerism); and (2) to

build viability in a manner that is consistent with the

values and goals of economic, sociological, and environmental sustainability.

Co-ops a Probable Model, But Not Without

Problems

Most business forms tend to be specialized

toward making a return on financial investment and

are not well suited to pursuing the broader collateral

interests of social and environmental sustainability.

However the cooperative business form may be a likely choice for AOTM development, given co-ops are

structured, not only as businesses, but also as democracies. 

Co-ops are organized around three general

democratic principles of use:

● The User-Owner Principle: Those who own

and finance the cooperative are those who use

the cooperative.

● The User-Control Principle: Those who control the cooperative are those who use the

cooperative.

● The User-Benefits Principle: Cooperative purpose is to provide and distribute benefits to its

users on the basis of their use (Dunn 1988, 83).

Mooney (2004: p. l) suggests this organizational form

may be ideal for accommodating the many interests of

sustainable development, since the cooperative structure is itself designed to meld together the many conflicting voices of a membership organization through

the processes of member-based, democratic decisionmaking. 

However, cooperative form must be considered

with caution. The historical record on agricultural

cooperatives integrating so many agendas--economic,

sociological, and environmental sustainability for

example--has not been positive. Traditional North

American agricultural cooperatives have done well at

helping farmers countervail the power of large corporations in the marketplace. They have not had a stellar

record of putting sustainability agendas in place, nor

of even keeping family farmers (as a group) in farming. Many of today's agricultural co-ops (as organizational derivatives) were formed in the first half of the

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twentieth century, when production, marketing, and

opposition to monopoly interest were exclusively central concerns, and environmental responsibility and

sustainability were barely part of the language.

According to Fairbarin (1999:95), many of these co-ops

pursued a competitive survival strategy of Òexpanding, merging, rationalizing,Ó becoming large bureaucratic organizations in their own right, and distant

from their farmer-members.

Fairbarin's observations are not surprising. As

organizations with the dual functions of both businesses and democracies, various tensions are built into the

very structure of cooperative organization itself. These

tensions are akin to a see-saw that can be tipped in one

direction or another, given the nature of external pressures. Changes can occur in a co-op's competitive environment where as an organization may privilege

development of the business rather than the economic

democracy, or efficiency rather than equality, or

bureaucracy as opposed to participation. Fairbarin's

comment highlights how the tension between democracy and bureaucracy was negotiated over time Ñ

Òexpanding, merging, rationalizing.Ó The development

of bureaucracy was privileged over democratic participation. While cooperatives have much to recommend

themselves as democratic businesses Ñ and as possible

forms for AOTM agendas--they operate within a particular historical context. How co-ops might be shaped

in a manner to sustain the concerns of middle agriculture, despite such tensions, is a central interest point in

this paper.

The first section of the paper provides a brief synopsis of the historical context of the agri-food economy, paying particular attention to the industrialization

of production agriculture, the parallel development of

large complex agro-food companies that provide marketing outlets for the distribution of production, and

the emergence of shifts in the nature of societal consumption from labor dominant to a late-modern consumerist. Although the detail of the first section may

be found elsewhere in the literature, the aim is to realistically highlight the historical socio-economic context

(as pre-mobilizing conditions) to cooperative formation and change. Any cooperative must operate within

this context. This section is prefaced with a brief summary and outline of a Òsustainable agricultureÓ to

emphasize the ideals and goals of the AOTM initiative.

Section II reviews cooperative organizations and their

various problematic tensions as they function in this

specified larger environment. Recommendations are

made in Section III on the kind of cooperative structure 

required to address sustainability agendas, given internal co-op tensions.

Section I: Socio-Economic Context: Premobilizing Conditions

Contours of a Sustainable Agriculture

Beus and Dunlap (1990) and Chiappe and Flora

(l998) chart the polemic differences between large versus small-scale agricultural systems. They suggest that

these alternatives involve trade-offs and choices

between and among some of the following characteristics (among others):

● Farming as a business versus farming as a

business and a way of life

● Heavy reliance on external sources of energy,

inputs and credits versus reduced reliance on

them

● Heavy reliance on non-renewable resources

versus reliance on renewable resources and

conserved non-renewable resources

● Large, capital-intensive production units and

technology versus smaller, low-capital production units and technology

● Concentrated control of land, resources and

capital versus dispersed control of land,

resources and capital

● A narrow genetic base versus a broad genetic

base

● Primary reliance on science, specialists and

experts versus primary reliance on personal

knowledge, skills and local wisdom

● National/international production, processing

and marketing versus more local/regional production, processing and marketing

● Small rural communities understood as nonessential and dispensable versus small rural

communities understood as essential to a sustainable agriculture 

● A larger socio-economy of high consumption

to maintain economic growth versus

restrained consumption and broad resource

conservation to benefit future generations

Green and Hilchey (2002, 15) expand on this

work, suggesting that the smaller scale, alternative

development path, oriented as it is toward economic,

ecological, and sociological sustainability, has several

benefits that include sustaining:
● The independent, relatively small businesses

(family farms) that contribute to the maintenance of a dispersed ownership agriculture, a

strong middle class and civil society

● The local economy via the Òmultiplier effectsÓ

of dollars spent locally from these farms, the

provision of local jobs and local purchasing of

inputs and services

● The environment with a smaller scale, lowinput production agriculture that better protects water quality, soil, air and biodiversity

● An agriculture that produces an output of

fresh, wholesome, and nutritious foods

● And enhancing the viability of a small-scale,

socio-economic culture better attuned to raising healthy individuals and families.

Many farms on the small end of the farm-size

continuum and near metropolitan communities have

been able to reproduce themselves (while emphasizing

the interrelationships of an ecologically minded socioeconomy) by producing nutritious, frequently organic

food that is directly marketed to nearby consumers

looking for locally grown ÒnaturalÓ and organic foods.

However, the volume that these markets can absorb is

limited and this precludes their use as a major outlet

for mid-sized farms which produce large volumes of

products and commodities that are distant from the

markets of metropolitan areas. In order to survive, as

noted earlier, these larger farms (the farms of the middle) must find an economically viable place between a

food production system that rewards increasing industrialization and scale and a much smaller system that

rewards low cost, small volume, and niche-product

specialization.

To this end, this report offers suggestions on how

the cooperative form of organization might be used to

find this mid-place and help renew agriculture-of-themiddle farms. As stated, cooperative organizations

exist within a historical context, as do the changes they

may undergo. This report takes the perspective that

these conditions are understood as a pre-mobilizing

context to cooperative formation. Therefore, these conditions are reviewed here, from the earliest petroleumdriven mechanizations to the Òhigh-modernÓ reconstruction of consumer tastes Ñ i.e., from production

through consumption (a path any commercial food

product must follow). Any cooperative formation

(existing or planned) will have to negotiate a path

through this context of conditions.

Industrialization of Production and

Conglomeration of Agri-Food Firms

The progressive developments in agricultural

production and corporate conglomeration of agri-business firms are presented in a timeline below to emphasize not only their historical entrenchment, but also

how their respective incremental development (i.e.,

food production, and large-scale agri-business

involvement in the provision of production inputs,

food processing and product distribution) have reinforced and strengthened one another. Emerging within

these developments has been a complex of powerful

and corporate-embedded, agricultural interests that

continually push further industrialization.

1) World War I onward: The progressive development and use of tractors and other mechanical

implements (as provided by incipient agri-business

firms) allowed individual farmers to farm much larger

acreages (while creating a tendency to displace the use

of animal and direct human power on farms). 

2) World War II onward: The progressive development of synthetic fertilizers, pesticides, herbicides,

other chemicals, as well as off-farm seeds and feeds

(provided by agri-business firms) allowed individual

farmers to intensify production per acre (while creating strong tendencies to displace the use of farm produced feed, seed, and fertilizer with off-farm inputs). 

3) Late 1950s onward: The development of artificial breeding, and the quality and quantity of animal

biologicals and antibiotics (provided by agri-business

firms) permitted increases in yields of animal products

per animal, as well as the numbers of animals that

could be raised in one location.

4) Post-Depression, post-World War II era

onward: A deepening industrial organizational strategy of conglomeration, firm integration (vertically and

horizontally), multi-regionalization, and globalization

of corporate firms evolved. These strategies gave firms

greater resilience and robustness to ride out the cyclical expansions and recessions of a progressively

advancing industrial economy, while avoiding a

repeat of the collapse of 1929. Other strategies Ñ joint

ventures, strategic alliances, and outsourcing, for

example Ñ became evident in the 1990s as accommodations to such 1970s and 1980s stressors as: oil crises;

relaxed regulation of international monetary arrangements after system collapse; coincident inflation and

high unemployment (stagflation); organizational

downsizings and closings concurrent with the recession of the 1980s; cyclical and product-specific trade

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wars alternating between free trade and protectionism;

and saturation of commodity-export markets and

falling prices (Fairbairn 2004, 46-49). 

From this context, the high-modern corporation

emerged, composed of Ónetworks of holdings, joint

ventures, subsidiaries, contracts and outsourced servicesÓ within a larger context of continuing mergers,

acquisitions and conglomerations (Fairbairn 2004, 46-

47). These organizational strategies have given present-day firms greater reach, both horizontally

(through multiple global locations and manifold products) and vertically (from producer to consumer),

while simultaneously retaining and deepening their

flexibility in the face of cyclical markets. And, as documented by Heffernan and Hendrickson (1999);

Hendrickson, Heffernan, Howard, and Heffernan

(2001); Rogers (1997); Sexton (1997); Marion and Kim

(1991); Barr (1999); and Cotterill (1999), these strategies

crystallized in the agricultural sector with the development of progressively fewer firms accounting for

increasingly larger proportions of the farm-input supply and farm-output processing and marketing chains.

5) Mid-1980s onward: What some have termed a

Ònew agricultureÓ emerged during the mid-1980s. This

new agriculture involved not only a deepening in production innovations, but also a blending of production

technologies with developments in methods for product distribution to consumers (Boehlje and Schrader

1998; Boehlje 1998; Boehlje and Sonka 1999; Royer and

Rogers 1998). These developments have included: (a)

the continued deepening of mechanical, biological and

chemical technologies, augmented with the development and application of new biotechnologies; (b) the

continued development of (agri-business driven) foodsupply chains that tend toward vertical integration

from producers to consumers; (c) the progressive

development of information-monitoring technologies

that permit trait-identity traceability along a food

chain, with possibilities for end-users to provide feedback (end user responsiveness); and (d) an expansion

of the competitive context in the international arena

that increasingly involves global sourcing and selling

of products by large corporations that have moved

from regional and national to multi-national status. 

These developments have reciprocally reinforced

each other, both technically and organizationally, as

large corporate actors have sought new and relatively

ÒsafeÓ investments in order to compete (or to escape

direct competition) with other corporate actors.

Information monitoring allowed for the inspection and

standardization of production, assembly and distribution, as food products are moved through what has

come to be a vertically integrated (and organizationally contained) food chain Ñ from dirt to plate. New

biotechnologies have offered opportunities for new

product development, greater technical control, and

expanded opportunities for profit realization. The

greater the integration of a food chain within a single

(though complex) firm, the greater a firm's control

over product characteristics, deliverable quantities,

and timeliness of delivery. The less uncertainty there

is, the greater a corporate entity's ability to shift sourcing and selling geographically (and globally) to maximize profits. A firm's use of production contracts with

farmers can help solidify the food chain at the producer level, serving to stabilize and standardize agricultural raw material for food-chain production.

6) Contemporary Agri-Food Complex: The simultaneity of these several trends, although cyclical in

impact, has resulted in a structure of agricultural production that exceeds consumption demand, with consequent prices insufficient to maintain long-run farm

viability. This structure has produced a complex of

impacts, including: continued expansions in farm scale

(in order to maintain income), debt incurred to finance

these expansions, still more production due to

increased industrialization of farming, the redundancy

of farmers given food demand, farm bankruptcy, farm

consolidation and farmer displacement. Functions performed on the farm have changed as well, with

increasing amounts of such inputs as feed, seed and

fertilizer being produced off the farm and sold to

farmers as purchased inputs; thereby pinching farmers

between high input costs and low product prices. The

distribution linkage between farmers' production and

consumer products is facilitated by increasingly large

and diversified firms that provide, respectively, inputsupply sales, product-processing, and marketing

(some firms providing all three functions) in an

increasingly globalized marketplace. 

7) Confined Animal Product: Developments in

information-monitoring systems and computerization,

the continued development of antibiotics, and innovations in farm architecture and engineering have helped

to facilitate and expand confined and high-density animal production. In turn, the deepening of these tendencies has augmented pressures that displace production from a family-farm scale, particularly in the

case of poultry but also (with major inroads occurring)

in the production of hogs and, more recently, in dairy

production. Many farmers have managed to survive

these trends by entering into production contracts

with off-farm agribusiness concerns, but have often
done so with the loss of discretion over their own

farm-based production processes (Boeljhe and

Schrader 1998; Thu and Durrenberger 1997).

The Historical Shifts in Consumption:

From Labor/Family to High Modern

Consumer

Labor/Family Consumption

Throughout much of the 20th century, the agrifood regime described above Ñ the production,

assembly, and distribution of food products from producers to consumers Ñ had a predominant (though

not exclusive) orientation to a labor- driven and family

consumer market. The market for food was shaped by

a socio-economy that became progressively less rural

and increasingly more metropolitan and urban--the

urban population increasing due to people being displaced from farming communities, as well as from

population growth generally within metropolitan

areas. Giddens (1991, 1998, 2000) variously summarizes aspects of the social and economic organization

of this era as: 

1) A social system, predominantly of a family

form - Ñ where the husband was the breadwinner, and the spouse a housewife and

mother,

2) A homogeneous labor market where men

threatened with unemployment were mostly

manual workers willing to do any job at a

wage that ensured their survival and that of

their families,

3) The dominance of mass production in basic

sectors of the economy, which tended to create stable, but unrewarding conditions of

work for many in the labor force, 

4) A national economy that was primarily

domestic such that export/import trade had

relatively little influence on larger economic

dynamics.

The link between food production and food consumption was made by increasingly large, complex,

multi-product and multi-location businesses that produced standardized, manufactured and inexpensive

edible food products for consumption by a labor force

of manual and factory workers and their families. This

manner of food production (and consumption) blended well with an overall national economy that was

organized for economic growth through the investments and outputs of increasingly large firms within

certain basic industries--those producing consumer

durables (like washing machines, refrigerators) and

automobiles. The production of ample supplies of

inexpensive food meant laborers (and their families)

had more money to support the purchase of these

basic consumer items. The food consumption diet was

one of inexpensive bread and butter, milk, meat and

potatoes (grain, dairy, livestock and vegetables)

(Friedmann 1995). This socio-economic structure Ñ

and its trends of production and consumption Ñ

shaped a large share of the market demand for food

throughout the 20th century. 

Construction of the High Modern Consumer

According to Bauman (2001), Gertler (2004), Beck

(1992), and Giddens (1990, 1991), a new path, or new

era, of socio-cultural and economic development

ÒnoticeablyÓ emerged somewhere in the late 1960s.

These authors argue this path is characterized by

intense use of technology (e.g., communications, computers, and biotechnology), globalization, high specialization and expertise, high consumption, high mobility

and institutional reflexivity. Giddens, in particular,

has suggested that globalization, specialization/expertise and reflexivity are predominantly important to

this high modernity era, and are instrumental in constructing a new dimension to consumer demand--augmenting, if not displacing in some instances, the earlier meat-and-potatoes, labor-driven consumption

market. (Both modernity theories and concepts of

human attachment theory are drawn upon in this section to more fully highlight the shift in the character of

food demand from labor-driven to high modernity

consumption. Though Giddens (1990, 1991) does not

write about ÒfoodÓ demand per se, his works are suggestive of how these shifts in consumption occur. 

In some sense consumers have been reconstructed during this high modernity era. ÒThe most fundamental relationship we develop is attachment, i.e.,

embeddedness and groundedness. Attachment is fundamental to building trust and security, or a secure

sense of self (DeAngelis 1997, 2; see also Cross 2003;

Theodori 2001; and Goudy 1990 for sociological treatments of attachment, and Cortina and Marone 2003;

Karen 1998; Solomon and George 1999 for psychological approaches with sociological implications).

Historically, psychological attachment becomes

embedded in Ñ and is received (and acted upon)

from within Ñ a cultural context of traditions and the

norms of ÒlivingÓ and ÒbeingÓ within communities

(see Giddens' 1991 and his discussion of Winnicott).

Traditionally, these communities have been located

within and bounded by geographic locations.

However, the interrelationships of globalization and

5
6

continued development in specialization/expertise of

high modernity tend to displace the embedded traditions and earlier ways of living and being. Traditional

authorities either become discredited due to the hightech expertise of others, or are simply reduced to one

choice of many choices readily available. New authorities and multiple authorities Ñ in the form of expertise and specialization, as well as exposure to multiple

ways of being, working and living via globalization

influences (and globalization demands) Ñ shift people away from earlier, more familiar patterns of living. 

The dynamism of these processes is intensified due to

the influence of what has come to be an ever-present

reflexivity, that is, Òthe susceptibility of most aspects

of social activity . . . to chronic revision in light of new

information and knowledgeÓ (Giddens 1991, 20).

Therefore knowledge and information are constantly

being revised and updated and can only be taken as

Ògood until further notice.Ó This constant reflexivity

intensifies and leverages upward the processes of

globalization and specialization/expertise to evermore-fluid levels. Combined with the pushes and

pulls of high mobility, these developments leave many

people experiencing the socio-economic culture as

Òcontext running away with itselfÓ (Giddens 2002;

Cassell 1993; and as reflected in Bauman 2000).

In his books Modernity and Self-Identity (1991), The

Consequences of Modernity (1990), and Runaway World

(2000), Giddens argues that within this Òrunaway context,Ó people carry large amounts of existential anxiety. The processes of globalization,

specialization/expertise and reflexivity disembed people from felt-known and unquestioned aspects of their

socio-economic culture.

Within these cultural dynamics, people shift,

intra-psychically, away from earlier conflicts about

knowing Òhow to fit whereÓ within culturally embedded patterns (and the struggles of violating (or not)

traditions, norms and acceptance of authority) to anxieties more indicative of troubled self-acceptance, if not

rejection of the self by the self. The high-modern consumer has come to exist in a context that demands selfdefinition and redefinition, while simultaneously contending with increasingly tenuous links to traditional

norms of living, and fewer and fewer long-term links

to communities with a geographic base, or to communities in general. Giddens (1991) characterizes this era

as one of pervasive and structurally embedded Òexistential anxiety.Ó And in consequence, high modernity

has emerged as an era characterized by a continued

seeking of control of self, risk and institutions, and by

a continued searching for the felt-secure (Gray 2000).

Reaction: Consumption and Social Movement

Desire

Consumption 

Many people play out these anxieties in the marketplace. Consumption appeals because it soothes the

psyche directly and seemingly addresses the problematic qualities of high modernity. Attractiveness, beauty, personal popularity, and acceptance are touted

through the consumption of the right kinds of goods

and services (Giddens 1991; Bauman 2000). The implicit promise is social acceptance or at least comfort and,

as a corollary, safety (Gray 2000).

Duncan (1999) refers to these goods and services

as ÒdesignerÓ products. Within high modernity, they

provide discriminating choices and part of a constructed home for one's self-identity. They signify not only

ÒtasteÓ but also political, environmental, and dietary

correctness, perceived interpersonal safety and social

responsibility; characteristics well beyond the earlier

labor-defined, Òmeat and potatoes,Ó Òbread and a bottle of milkÓ in importance. As designer products, they

become multi-determined with meaning and cultural

significance.

Consumption solutions are ephemeral, however,

within the continual reflexiveness of the culture.

Solutions are here today, displaced tomorrow, never

really stemming people's existential anxieties. At best,

these solutions offer only temporary relief, thereby

giving consumption a particular high-modern and

only temporarily sated coloration.

Social Movement Desire 

Melucci's (1988) work on Ònew social movementsÓ

parallels Giddens' (1990, 1991, 1994, 2000) writings on

a life and emancipatory politics. The dynamics of high

modernity, while central to dis-embedment and its

own brand of anxiety production, also create conditions for more positive reactions. A drive or desire Òto

beÓ (as a positive reaction to existential anxiety) has in

part displaced a drive Òto have.Ó As Melucci notes

(1988, 329; also see Melucci 1996). ÒThe freedom to

have . . . has been replaced by a struggle for a freedom

to be.Ó This struggle is particularly evident in the

demands and articulations of social movements,

whereby claims are made for improved quality of life,

easier self-expression and safety in the freer acknowledgment and development of identities--race, gender,

ethnicity and sexuality. (Also see Buechler 1995;

Johnston et al. 1994; and Larana et al. 1994 for further

discussion on contemporary social movements). Such

demands are different from the older cooperative and
labor movement grievances (the struggles Òto haveÓ)

Ñ based, as they have been, in mobilizations for fairer

distributions of resources, fairer prices and greater

power in the marketplace. 

ÒSince the 1970s, many of the new or expanding

kinds of co-ops have been those dealing with values,

lifestyles or services, rather than basic material goods.

Much of the growth in housing co-ops, worker co-ops,

community development organizations, women's coops, aboriginal co-ops, co-ops associated with ecological ideas or health and others, have occurred within

this new [high-modern] or post-industrial frameworkÓ

(Fairbairn 1999, 47). Although Òto haveÓ agendas are

still present, they have been augmented with a predominant interest to express and deepen identities and

ways of being. Slow food, organic agriculture and sustainable agriculture are multi-dimensional within this

context. They provide food consumption items that are

at once both political-economic, but also concretely

real. These items can have appeal Ñ in an era of existential anxiety Ñ because of their soothing effects as

food unto itself and their nutrition value, but also as

food that is safe (and perceived as less risky) and produced in a manner that seeks to embed production in

environmental, economic, geographic and community

sustainability (perceived permanence.) 

Summary of the Socio-Economic

Context and Pre-mobilizing Conditions

Although shifting historically in terms of predominance, the trends noted in Section I are all present

as an amalgam of influences in the current socio-economic and ecological context. In situations where

cooperatives are formed, these trends, rather than disappearing, can be expected to continue and to set limits on the character and nature of cooperative development. They are likely to include:

● Continued pressure for concentration and

centralization of farming via technological

development and industrialization.

● Continued pressure to integrate food chains

from production through processing and marketing via technology, and organizationally

with production contracts between the corporate firm and farmer.

● Continued pressure for vertical and horizontal integration among corporate firms in the

food sector (and outside of it). With food

firms this will likely occur via conglomeration

of related and unrelated products and activities at multiple locations, including global

conglomeration (and the consequent global

sourcing, selling and processing of products).

● Continued use of joint ventures, strategic

alliances, mergers and consolidations among

corporate actors to realize vertical and horizontal integrations and conglomerations.

● Continued demand from consumers for products oriented towards addressing the anxietydriven problems of high modernity; i.e., products that can both soothe and provide vehicles

(or be advertised and sold as consumption

vehicles) for self-expression and identity.

● Continued drive from the larger population to

find vehicles to mitigate the loss of embeddedness (beyond consumption) that can

address safety and permanence. For example,

production for economic, environmental and

community sustainability. . 

● Continued possibility of social movements

(and co-ops) to mobilize around the needs Òto

haveÓ in order to mobilize for fairer distribution of resources, fairer prices and greater

power in the marketplace.

● Continued possibility of new social movements (and co-ops) to address the various

needs for identity, individual efficacy, group

identity and community, a needed sense of

safety and an embedded permanence both by

pursing the stated goals of the organization

itself, but also through the very act of participating in the organization.

● Continued demand forÓbread and milk Òand

Òmeat and potatoes.Ó

● Continued ability of investment firms to find

vehicles for investment in profitable activities,

regardless of the interests served by the original activities (co-op social goals, for example)

Ñ implying continued pressures from the

investment firm sector to compete with cooperatives to acquire them and/or subordinate

them to investment interests. 

These several trends Ñ though shifting historically in terms of predominance Ñ are present as an amalgam of influences in the current socio-economic context. Competitors with an investment interest,

searching for a return on investments, will continue to

influence the shape of production, the organizational

nature of distribution, as well as the nature of consumption. Essentially, the interests of AOTM must

contend with, accommodate, and/or oppose the tendencies of an advanced investment-oriented economy

7
that has resulted in the concentration and centralization of agricultural production into fewer and larger

farm units, the organizational conglomeration-strategies of agri-business firms that consolidate and expand

market positions through vertical and horizontal integration, and food consumption that reflects consumers' needs for nutrition, but also for soothing, status, and promises of safety and permanence.

The cooperative model provides a strategy for

empowering local producers with economic organizational democracy. As businesses, co-ops have had to

find profitable consumer-oriented outlets for their producers' products, while historically competing in a

marketplace with firms often larger and sometimes

global in reach. These pressures, as noted earlier, create a series of tensions that can compromise the original purposes of the organization. Some of these tensions are reviewed in Section II in the spirit of

Mooney's (2004) contention that development strategies that do not at least acknowledge their basic oppositions and tensions, or utilize them in their planning

and practice, are disadvantaged and will likely tend

toward failure (Mooney 2004). It is important to be

aware that when gains are seemingly made, they may

be closely linked to coincident losses. Ideally, a co-op

can achieve both a positive business response, as well

as such larger collective goals as the sustainability

agendas of the AOTM initiative.

Section II: Cooperative Organization

This section provides a prologue to the later consideration of cooperative types (local, centralized, and federated) and their respective applications to the challenges of the AOTM. Two issues are reviewed here: (1)

the internal dilemmas and tensions of cooperative

organization and how development of one aspect of a

tension may result in compromising a linked opposite

(participation versus bureaucracy, for example); and

(2) how agricultural cooperative history suggests the

cooperative model as an appropriate vehicle for middle agendas, but only if close consideration is given to

these several internal tensions Ñ as have been played

out historically.

Cooperative Dilemmas/Tensions 

Cooperatives are at once democratic associations of

members as well as businesses (Craig 1993; Lasley

1981; Mooney 2004; Mooney and Gray 2002; Mooney,

Roahrig, and Gray 1996). A co-op's structure, purposes, and interactions with its external environment produce tensions and trade-offs between its political and

sociological aspects (as an organizational democracy)

and its economic aspects (as a business). Mooney

(2004), Mooney and Gray (2002), and Gray, Heffernan

and Hendrickson (2001) highlight some of these dilemmas to include the trade-offs and tensions between

and among their basic purposes of earnings versus service versus life-meaning, and such organizational

dilemmas and trade-offs as: individualism versus collectivism, competitive individualism versus cooperative behavior, business efficiency versus participative

democracy, complex expertise versus grassroots wisdom, centralized decision-making versus decentralized decision-making, bureaucratic logic versus cooperative logic, and democratic bureaucracy versus

direct participative democracy.

Dilemmas in Cooperative Purpose 

Most economic organizations are organized around at

least one of three basic purposes; i.e., making profits,

providing service, and/or realizing meaningÓ

(Torgerson, Reynolds and Gray 1998, 1; also see Craig

1993). Exemplar organizations tend to range along a

continuum, from investment-oriented firms (IOFs) (the

dominant U.S. business form) at the profits end, to the

kibbutz at the life-meaning end (see Figure 1). U.S.

forms of cooperative organization are found at different locations on the continuum but predominantly

within goals of service. The focus is on serving economically the greatest numbers of people over the

longest period of time (Craig 1993; Nadeau and

Thompson 1996). Typically, however, cooperative

organizations contain elements of all three tendencies,

having earnings needs, as well as service and internal

participation and meanings mandates (Torgerson,

Reynolds, and Gray 1998).

Organizational Dilemmas and Demands in the Business

Environment 

How a cooperative interacts with its external environment produces different degrees of tension and tradeoffs within the organization, much of it conditioned by

the market. For example, participation and democracy

take time. The market's demand for efficiency, quickness and Òbeing nimble in the marketÓ is ever present

and ever felt. These opposing pulls can become manifest in the structural form and in the internal logic of

the co-op. Both the needs for efficiency and a predominant emphasis on the bottom line can drive organizational form toward a bureaucratic shape and logic that

emphasizes development of organizational hierar8
chies, centralized decision-making and top-down

flows of authority (Breimyer 1965, 1996). A bureaucratic logic, as distinct from a grounded cooperative logic,

can displace local responsiveness, decentralized decision-making, participation, and involvement.

These linked oppositions are not simply or solely

a matter of choice and will. Tensions (and cooperative

character) are in precarious balance in the market.

Given a competitive market over time, efficiency criteria tend to drive organizational form toward bureaucratic models (organizational complexity and expertise) and away from direct participation and grassroots

involvement. When participation declines, as is often

the case when organizations tend toward centralization of decision-making, it can become increasingly

difficult to distinguish cooperative behavior from the

behavior of investor-oriented firms (and these firms'

exclusionary emphasis on earnings). Such co-ops begin

to act like any other business and, in the process, can

lose or severely compromise their service and meaning

purposes (and economic democracy goals). However,

for the co-op to act without recognition of market

imperatives (e.g., the need for earnings) is to risk the

loss of its business presence in the market place. 

For example, Òmany new cooperatives entered

the field in the 1970s [and later] associated with ecological and organic-food movementsÓ (Fairbarin 2004,

46). Many of these organizations went bankrupt during the 1980s and 1990s due to a failure to form strong

wholesaler organizations, a necessary degree of layered organizational complexity (Fairbairn 2004). A coop that demands organizational simplicity, while dismissing other requisites of the market, risks losing its

capacity to compete in the marketplace and, ultimately, to meet members' needs. However, co-ops that are

Òall businessÓ and leave various equality, equity, service, participation and meaning aspects unaddressed,

risk losing members' loyalty, and patronage. Thus,

business cooperatives must face several dilemmas,

among them, perhaps one of the most troublesome, the

tension between developing bureaucratic strategies

(which may be better adapted to the short-term earnings demands of the market) versus strategies that are

based within slower, democratically based (informationally complex) approaches that privilege participation, values-based meanings and economic democracy.

Successful Cooperative Mobilizations:

Organizing “To Have”

Within the panoply of agriculture-of-the-middle interests (social, economic and environmental sustainability) the cutting foci have involved (and will involve)

social-economic and political struggle. Mooney's 2004

writing is suggestive of the ideal character of cooperatives for accommodating the many interests of the

middle, given they are frequently established with a

tradition of countervailing power, and an internal

structure (democratic) designed for conflict. The ability of cooperatives to sustain struggle through time, in

a contentious and highly competitive environment,

and survive, has been documented by both Gertler

(2004) and Mooney (2004).

For example, the origins of many (though not all)

U.S. and Canadian agricultural cooperatives are

embedded in an era that spans from the late-nineteenth century onward to World War II. Their legitimacy is best marked by the passage of the U.S. CapperVolstead Act in 1922, which established the legal right

of farmers to cooperate (with parallel legislation occur

ring in Canada). Many of these early co-ops were 

organized to oppose monopolistic and oligopolistic

investment firms at local, regional, and national levels.

They were fair share (Òto haveÓ) struggles. 

Mooney (2004) and others (Torgerson, Reynolds

and Gray 1998) contend that these cooperatives have

had eminent success in sustaining themselves through

these struggles. Craig (1993) argues that they have

been instrumental in breaking monopolies and cartels,

eliminating both windfall profits and middlemen, and

distributing wealth more equitably. ÒThough not the

dominant form of agribusiness (except in a few commodities), the cooperative market share is usually

about one-third of marketed goods, and over onefourth of input supplies (USDA-Rural Development

2008). From a historical point of view, this must be rec9

Figure 1. Continuum of Cooperative Purposes

Players IOF New Open Farm Consumer Kibbutz

Generation Marketing Supply Goods

Co-ops Co-ops Co-ops

Purpose Profits Services Life/Meaning
ognized as a success, given the origins of the movement as a form of resistance to the oppressive conditions of monopoly and oligopoly . . .Ó and their

resilience to continue to service farmers over time in

the face of this power (Mooney 2004, 78). However,

although there have been very real successes, these

gains have been accompanied with other results that

have been disadvantageous to all farmers as a group.

Historic Strategy: Individual Collective versus Mutual

Collective Benefits 

Cooperatives have both individual collective benefits

and mutual collective benefits. Farmers who receive a

higher price for their individual products when marketed at a co-op are receiving an individual benefit

due to the joint action of farmers. The fact that individual farmers can raise a particular product because they

are able to reach a market that no farmer could reach

individually is a mutual collective benefit (Parnell

1999). Historically, agricultural co-ops have tended to

emphasize individual collective benefits, rather than

mutual benefits. Most have supported a trajectory that

depends upon large capital-intensive production units

and technology, with heavy reliance on external

sources of energy and credit. This path of development

has been a successful one economically for many agricultural co-ops and has enabled them to oppose

monopoly interests in the marketplace. However they

have failed many farmers (when farmers are considered as a group) because they followed a development

path (traditional and capital intensive) that deepened

tendencies toward farmer displacement (Fairbairn

2004; Craig 1993; Gray 2000). Individual farmers have

been able to survive (and have been assisted by cooperative presence in the market place), but the mass of

farmers as a group, particularly family farmers, have

not been able to endure, and have gone out of business.

Development of Bureaucracy

Further, in order to survive as businesses and to compete with large (highly robust) multinational investment firms, many cooperatives followed organizational strategies that paralleled those of their competitors

(as articulated in Section I). This strategy allowed them

to develop into a credible, though subordinate, market

force (Mooney 2004; Craig 1993). However, their success came with the costs of privileging a bureaucratic

logic of Òexpansion, merger, and rationalization,Ó and

an organizational form that was distant from their

own individual members (Fairbairn 1999, 2004;

Mooney and Gray 2002).

Organizing Both for Fair Share “To

Have” and Identity “To Be” Struggles

Within the socio-economic culture of high modernity,

collective mobilizations and new social movements

tend to be formed more often around concerns of individual identity, individual efficacy and the need for

community, safety and a sense of permanence

(Melucci 1988, 329). ÒTo haveÓ and Òto beÓ tendencies

co-exist, but, in general, grassroots predispositions for

expression/identity are more paramount (though not

exclusively so). 

Agricultural cooperatives with sustainability

agendas may need to follow both the older market and

the more recent identity/expression logics of mobilization. Clearly, these co-ops need a business presence in

the marketplace to survive; however, coming together

as farmers, with the broad social, economic and environmental agendas of the middle, may require farmers

to do more than organize for such goals as lower costs,

higher prices, and a market for their products (Òto

haveÓ agendas). ÒPeople's propensity to become

involved in collective action in general is tied to their

capacity to define an identityÓ (Melucci 1988). The

need to survive economically may bring farmers to a

co-op; however, Ònew social movementÓ history suggests these Òto haveÓ agendas may not be enough.

Rather plans more oriented to farmers' mutual identity

as farmers of the middle (seeking to ensure their joint

interests of socio-economic and ecological sustainability) may move them beyond struggles for their individual survival (as has been the predominant pattern historically in agricultural cooperatives) to one more

grounded in their mutual survival as a group. This

process might then re-embed farmers within a system

of production that is organized for farmer and community reproduction and environmental preservation,

rather than farmer and community displacement, and

environmental degradation. 

Consumption Desires

Ironically, it may be the larger marketplace and the

longings of the larger culture that are facilitative of

this embedment process. As alluded to previously,

nutritious food raised with environmentally sound

methods by family farmers is increasingly understood

as a preference among consumers (Center for Rural

Affairs News June 2004). Images and symbols proclaiming sentiments of Òback to the landÓ and Òback to

natureÓ abound in the larger culture and, despite the

persistence of Òcountry bumpkinÓ images, there is also

10
an acknowledgement of the Òsocial and human character benefits of learning honesty, hard work, ingenuity,

flexibility and fairness as part of being reared in a

farmÓ and rural environmentÓ (Thu and Durrenberger

1997, 1). More general themes of family farming (and

rural lifestyles) are evident in various advertising

images (for example Nature's Pride, Country Time, and

Florida's Natural), as well as in the mass-media advertising of such multinational agribusiness firms as

Archer Daniels Midland and Dean Foods. These

images sell products on a massive scale and in a socioeconomic context in which economists tell us Òthe consumer is kingÓ (the determinant in the marketplace).

Hundreds of thousands, if not millions, of people

identify sufficiently with these images to invest their

consumer dollars in the various associated products.

Following Giddens, the dynamics of high modernity Ñ globalization, specialization, reflexivity Ñ tend

to dis-embed people from many of their various cultural traditions, norms and authorities, resulting in

generalized conditions of existential anxiety. People

have sought to lesson this anxiety in a number of

ways, among them simply consuming the kinds of

goods that are bundled within promises of social

acceptance, attractiveness, beauty and personal popularity. However, other consumption has been oriented

to actually creating socio-economic structures that reembed people within a sustainable and identifiable

ecologically sound, socio-economy.

As suggested previously, and in the context of

high modernity, consumer desire may transcend the

demand for the soothing effects of food, given sociocultural disembedment and resulting existential anxiety. The published results of a survey done by Roper

Public Affairs in 2004 for the U.S.-based Organic

Valley cooperative (www.organicvalley.coop) document consumer support for a family-farm-based, environmentally responsible food system. This survey

reports that consumers ÒtrustÓ a family-farm agriculture, over an industrially organized agriculture to conserve resources and protect the environment. There is

a desire for environmental sustainability and, according to this survey, a willingness to pay more for food

so produced.

Mobilizations in any social movement are captured in part in symbols and identities. If family farmers of the middle were to combine their different needs

for empowerment in the marketplace Ñ by augmenting agendas of Ògetting a fair shareÓ and Òthe freedom

to haveÓ with an agenda of Òa freedom to beÓ Ñ this

might improve their possibilities to live out and

express their identities as family farmers, living on

farms, making a living farming. Consumers (in their

capacity as citizens) may in fact deepen the possibilities of these agendas with their own needs for safe and

nutritious food and an expressed need for a sense of

permanence (potentially approximated with sustainability agendas,) pursued in small to mid-size family

farm structures. 

Section III: Considering Cooperative

Structures and Dilemmas1

Individualism, Collective Action, and Voluntary

Participation

Recruiting and organizing family farmers for collective

action and cooperative organization presents dilemmas. As Thu and Durrenberger (1997) and Lauck

(2000) report, family farmers historically have carried

a series of values that include privileging hard work,

ingenuity, a sense of fairness, rights of property, individualism and independence. Individualism and independence, in particular, can be an anathema to collective action.

Cooperatives work best when formed by individuals who have a mutual interest to achieve some goal

they cannot achieve as individuals. However, this also

implies that individuals acting in accordance with the

agreements of a co-op may have to limit some of their

individual freedoms to obtain benefits that are only

available on a collective basis. For some farmers, neither individual-collective nor mutual-collective benefits may be sufficient for them to give up their respective autonomies. In a cooperative, demands for

product standardization, obligatory marketing schedules, and/or various sustainability criteria may serve

as a disincentive for some to join, in spite of other possible benefits. This individual-collective tension is ever

present Ñ to varying degrees - in co-ops in terms of

how readily potential members (and existing members) are willing to give up aspects of their individual

decision choices for the benefits obtainable in group

action. 

However, in Canada and in the United States,

cooperatives are structured in a manner that permits

aspects of individual choice and individualism to be

expressed. For example, in their initial framings, no

farmer is forced to join a co-op, no member is forced to

remain in a co-op; indeed, members may leave a co-op

whenever they choose. They can join and participate

11

1 Portions of this section appear previously as Gray, Thomas W.

ÒCooperative Structure for the Middle.Ó
or they can choose not to. However, once in the organization as continuing members, the individual-collective tension does not disappear but is present in various ways, depending on how the co-op itself is

structured. Historically, agricultural cooperatives have

followed three organizational structures: local, centralized, and federated cooperatives.

Local Cooperatives 

Locals are the most bottom-up of the three cooperative

structures (see figure 2). In general, small numbers of

members with similar interests are served by local

associations. Services may include the joint purchasing

of supplies and services, collective marketing of farm

output, and/or processing and marketing of products.

As organizations, they may have as few as 10 to 15

members, or as many as 500 to a 1,000 (Schaars 1971,

50). Most members live within close proximity of each

other and often know each other personally, lending

the cooperative a degree of informality unusual in

larger cooperatives and organizations. In fact, Òknowing each otherÓ tends to provide a rough measure of

local and small. Local cooperatives are businesses and

business is the central activity. However, member participation (beyond business patronage) in governance,

in meetings and in decision-making can provide the

additional benefit of a sense of individual and community efficacy, relationship and meaning. Involvement

and participation in the organization itself creates and

deepens these latter effects. 

Formal democratic control runs from the members as a group to the local association. Members elect

a board of directors who sets policy. This board may

also make managerial decisions, depending on the

complexity of the business. If business activity is conducted more than on a seasonal basis, and has a

degree of complexity not easily resolved with parttime management, then a professional manager is usually hired. The board of directors hires this manager.

With the introduction of a professional manager, the

tension between complex (managerial) expertise and

grassroots (member) wisdom may become more evident.

Local cooperatives have the organizational

potential to achieve many of the goals of the AOTM.

Open, transparent and democratic, locals can serve as

an organizational vehicle for assembling farmer voices

and achieving joint actions--giving farmers market

power and access well beyond what most small to

mid-size farmers could ever achieve as individuals. As

independent businesses, with local bases, they represent a dispersed, decentralized approach that would

allow members to take collective actions, if they so

choose, to support sustainability programs.

Responsiveness to local agendas and concerns almost

always occurs in these organizations, and local creativity (and identity) are stimulated and drawn upon.

However, as an overall policy approach to

national AOTM agendas, locals as a sole strategy for

AOTM survival would likely lack coordination and

congruency across the multiple individual facilities

and nationally. Further, given the intense competitive

environment agriculture represents historically, individual locals could well find themselves at a market

disadvantage, relative to larger firms that are less

socially and ecologically responsible. Market power

(as well as greater ease in bringing about coordination)

tends to inhere with the scale advantages of larger

12

Source: Schaars , p. 51

Figure 2:

Local Cooperatives
organizations. For reasons of scale, scope, as well as

standardization (and coordination) across region and

nation, Yee (2004) of the Association of Family Farms

suggests utilization of local facilities, in some combination with a larger organization, may be the most

appropriate structure for pursuing the interests of the

middle. 

Centralized Cooperatives

Similar to locals, members of centralized cooperatives

belong to a single organization (see figure 3). Unlike

local co-ops, their memberships are typically composed of thousands of farmers spread over broad geographic regions. Generally, these cooperatives serve

local members from local sites, but the ÒlocalsÓ themselves are associated with a central headquarters location. Typically, the headquarters is far removed from

most farm locations, residing in an urban setting. The

ÒlocalsÓ are not themselves co-ops, but represent local

business sites only. Formal democratic control runs

from the farmer to the central organization. Members

are elected either directly or through elected delegates,

to serve on the central organization's board of directors. As with local cooperatives, the organizational

board sets policy for the management of the cooperative business and is charged with hiring the cooperative executive officer (CEO). The CEO manages the

cooperative from the central headquarters. The managers that run the local facilities are hired and

employed by the management structure of the central

organization.

All the services that any local cooperative provides are made available at the local facilities of centralized associations; to include, for example, local

assembly, grading, packing, shipping, processing and

purchasing. However, centralized co-ops have various

advantages of scale, scope and resources that locals do

not have. These include achieving greater uniformity

of products and services regionally by operating all

local units from the center; lowering operating costs

through centralized control of the handling and marketing of products; and achieving the broad ability to

adapt local units to rapidly changing economic conditions (Cobia 1989). Further, large centralized co-ops

can sometime eliminate intense local competition by

Òdifferentiating their products from competing products with the development of various 'unique' product

qualities - through branding, advertising, packaging,

research and development, as well as intensive processing and product moldingÓ (Sexton 1997, 38; see

also Gray, Heffernan, and Hendrickson 2001). 

However, while there are advantages to centralization, there are also disadvantages. Decision-making

by definition is centralized rather than decentralized:

ÒOperational control and authority are concentrated in

the headquartersÓ (Cobia 1989, 45). Rather than being

organizations characterized by direct participative

democracies, as occurs in locals, democracy provisions

in centralized cooperatives tend to take shape as

democratic bureaucracies. Under such structures,

organizational size and bureaucratic authority flows

may all but eliminate possibilities for members to

13

Source: Schaars , p. 51

Figure 3:

Centralized Cooperatives
develop and deepen mutual identities such as the

Òfarmers of the middle.Ó Large bureaucratic structures

tend to mute a sense of individual and community

efficacy, relationship and meaning (qualities obtainable in local cooperatives) (Fairbairn 1999). 

Members may lose an active interest in participating in the organization for meaning and self-efficacy within such operations and revert to using the

cooperative merely for purchases and/or sales. The

potential for managerial expertise to gain greater

prominence over grassroots wisdom and voice increases when this occurs. Historically, cooperative membership has tended to dismiss its own voice (as a collective) in deference to managerial authority and the very

real demands for economic success. In turn, the

authority of managerial expertise has frequently

favored short-term profits and business survival, and

sacrificed activities that do not make an obvious contribution to the bottom line (e.g., membership programs). In such situations, strategic planning may

come to deemphasize the mutual-collective goals associated with belonging to the organization in favor of

individual-collective benefits (as discussed previously

in this report) (Fairbairn 1999; Parnell 1999; Yee 2004).

And activities organized to solidify an identity, such

as Òfarmers of the middle,Ó tend to be muted in their

impact. 

Federated Cooperatives

Federations of co-ops are sometimes formed from a

collective of local cooperatives (see figure 4). Farmermembers hold membership in the local co-op; the

locals in turn are the formative-members of the federation. The local cooperatives typically provide a large

proportion of the federation's capital needs, and own

the federation. The locals elect a federation board of

directors, which then hires the regional federation

management. The locals operate as cooperatives themselves, with their own elected boards of directors and

hired management. However the overhead organization may provide management for the local, per a contract arrangement. Federations can provide the services and most of the advantages of any centralized

co-op. By structure, federations can be as (or more)

responsive at a local level, given its system of locals, as

any unaffiliated local co-op.

Federations tend to fall in the mid-range of organizational dilemmas. They are organizationally complex, like a centralized cooperative, but this bureaucratic complexity tends to be offset by a representative

democracy at the overhead-federation level, combined

with a direct participative democracy at the local level.

ÒBecause the federation is built and controlled in this

manner (from the bottom up) the local members interestÉmay be better expressed in federation-membership communications, and [the necessary] member

contact more readily maintained because of the direct

ties to the localÓ [in patronage, votes, office holding,

and local and personal familiarity] (Cobia 1989, 48;

and as reflected in Schaars 1971).

To some extent, federations are able to address

some of the problems and dilemmas of centralization

versus decentralization--as implied by our discussion

of locals and centralized cooperatives. Briscoe and

Ward address this very issue (citing Schumaker) in

their book The Competitive Advantages of Co-operatives

(2000, 27). 

ÒWhenever one encounters such opposites [as

centralization and decentralization], each of them

with persuasive arguments in its favor, it is worth

looking into the depth of the problem for something more than compromise. . . . Maybe what we

really need is not either-or, but [both] togetherÓ . .

. we can find ways to enjoy the benefits of size

while staying small; we can get the advantages of

centralization while remaining decentralized.Ó

Federations incorporate the tension between centralization and decentralization into their structures, as

discussed previously in this report, without sacrificing

one for the predominance of the other. Further, concepts of heterarchy may apply as well, given the agendas of the middle and the need to establish and deepen

local identities. As introduced by Stark (2001a, 2001b)

heterarchy refers to organizational arrangements that

seek to Òcoordinate diverse identities without suppressing differences.Ó The richness of the local can be

deepened with heterarchial organization, while providing overall coordination; similarly federations

allow for deepening of local identities through local

cooperation, while providing a central mechanism for

overall coordination.

Yee (2004) argues, in a parallel manner, that the

AOTM interests might best be pursed with federatedlike structures. Central features to be included within

an AOTM federation might include: unified branding

to cover all members of the co-op, (with particular

attention to construction of a brand that incorporates

the agendas of the middle); a certification methodology administered from the federated regional level to

bring coordination across the locals and guarantees to

consumers; regional and national coordination of co14
op activities and flows of product; professional, broadscale marketing and advertising; research and education; and other professional support services. 

Although the relevance of individual strategies

might be debated, a federation tends to facilitate multilocal and regional coordination (as does a centralized

structure), but simultaneously addresses greater local

variability via its bottom-up, locally-based representation structure (Yee 2004). Large-scale coordination

may in fact be necessary for survival, in that it represents a capacity to manage the larger volumes of the

AOTM, while competing in a marketplace with multinational, complexly integrated corporations.

Federations can provide market presence and scale,

while securing and seeking to coordinate local member products. 

Despite their advantages, federations, like any

organization, must be examined for their internal tensions and conflicts (Mooney 2004). Federated structures have much to recommend themselves in terms of

their capacities to provide, in addition to coordination,

degrees of decentralized decision-making, local creativity, participative democracy, openness and transparency. However, dynamic tensions and trade-offs

exist. For example, the tension between grassroots

interests and wisdom versus managerial expertise and

the demands for business efficiency may be even more

difficult to balance. Strong incentives may exist (in the

context of intense market competition) to privilege and

make predominant the prerogatives of managerial

expertise with grassroots members furthest removed

from regional decision-making. Under such pressures,

shifts can occur in the structure of the co-op that can

minimize the participative and decentralized aspects

of the organization. Cooperative and AOTM development strategies, as noted previously, need to acknowledge these basic tensions and trades-offs, and/or utilize them in their planning and practice. Mooney

(2004) argues quite strongly that a cooperative that

ignores, or does not seek to manage the various tradeoffs mentioned in this report, will be disadvantaged in

the marketplace, and will tend toward failure. Making

these tensions explicit, planning for, and managing

them with the prudent use of member (oversight) governance structures, can help keep the organization

aligned with members and local needs. Keeping these

tensions and trade-offs hidden from view with poorly

designed or maintained democratic structures is likely

to result in cooperative failure as a ÒmemberÓ organization.

Conclusion

The overarching point of this report was to address

some of the agendas of the middle, by considering

cooperative membership-structure choices in the context of historic socio-economic, organizational and

social psychological influences on the economy (and in

particular its production, distribution, and consumption aspects). Much of the discussion has been organized around an implicit, but hardened, view that

15

Source: Schaars , p. 51

Figure 4:

Federated Cooperatives
highly competitive investment firms are part of the

socio-economic environment, and will pursue vehicles

for investment and profit, regardless of the interests

served by any original activities. The processes of agricultural industrialization and corporate conglomeration are likely to continue, given firms' pursuit of profits and of market power to realize profits. Farmers of

the middle then have the task of finding a place

between a food-production system that rewards lowcost, small-volume and niche specialization, and a

much larger system that rewards increasing industrialization and scale. 

In terms of consumer demand-and from the perspectives of high-modernity theories and attachment

theory--consumers want products that not only soothe

anxiety but also suggest permanence and personal,

community and ecological sustainability. Farming and

food systems that represent the values of sustainability

(i.e., permanence and safety) may be ready outlets for

consumer spending. 

Cooperatives represent an option to consider for

farmers of the middle. Co-ops have organizational

advantages in terms of democratic structure, transparency and service. By their formation, they are

designed to compete in the marketplace. They have

also been effective historically in organizing farmers

for power, particularly in opposition to monopolies,

oligopolies and conglomerate interests. However,

potential earnings (and success) will continue to entice

other market interests to compete for products, markets and possible organizational take-overs. The intensity of these competitive pulls can shift cooperative

purposes away from service, meaning and value mandates toward the exclusivity of market earnings.

This report suggests AOTM agendas may be best

pursued with a federated cooperative structure. It provides an approach to heterarchy (i.e., Òco-coordinating

and enriching diversityÓ) that entails combining

direct-member, participative locals with an overarching representative democracy serving a coordinative

role. Historically, federated co-ops have been able to

provide both accountability and transparency with

this structure, while effectively competing with much

larger organizations in the marketplace. However, coop organizations, like any organization, contain various tensions and dynamics that can shift and maximize some benefits and orientations at the expense of

others. Those using a cooperative model will need to

be vigilant to the various tensions highlighted (and

others) in this report.

With care and consideration of the various tradeoffs, farmer-members may be able to incorporate the

reality of these tensions within their planning, thereby

creating an organization that can effectively pursue

sustainability agendas. The cooperative model, particularly the federated co-op, may have the capacity to

empower the needs of the middle by providing marketing models for the volume of the middle; organizational capacity and scale to compete with much larger

organizations; an overarching organizational strategy

for providing standardization and coordination; and a

local democratic process to allow, engender, and promote grassroots creativity and responsiveness. The

model may do so-with vigilance--while being sensitive

to the organizational tendencies of bureaucratization

and the loss of local sovereignty, while simultaneously

addressing the needs for market viability.

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of the Middle Task Force, February. Racine, Wisconsin. 
USDA Rural Development

Rural Business–Cooperative Programs

Stop 3250

Washington, D.C. 20250-3250

USDA Rural Development provides research, management, and

educational assistance to cooperatives to strengthen the

economic position of farmers and other rural residents. It works

directly with cooperative leaders and Federal and State agencies

to improve organization, leadership, and operation of

cooperatives and to give guidance to further development.

The cooperative segment of USDA Rural Development (1) helps

farmers and other rural residents develop cooperatives to obtain

supplies and services at lower cost and to get better prices for

products they sell; (2) advises rural residents on developing

existing resources through cooperative action to enhance rural

living; (3) helps cooperatives improve services and operating

efficiency; (4) informs members, directors, employees, and the

public on how cooperatives work and benefit their members and

their communities; and (5) encourages international cooperative

programs. Rural Development also publishes research and

educational materials and issues Rural Cooperatives magazine.

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 a 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.