That cooperative spirit remains a cornerstone of Rocky Mountain Farmers Union today. In cooperatives the producers found a form of competitive enterprise solidly rooted in democratic control by the membership. Cooperatives allowed independent farms gain equity in the market place; they enhanced farm bargaining power with the giants of industry; and they helped reduce exploitation of farm producers and prevent price gouging suffered by both producers and consumers.
A CO-OP is a business that is values-based, benefits its members, is member owned, and democratically controlled. Profit is necessary to survive and prosper yet other things – such as transparency, opportunity, and inclusiveness – are equally valued. The CO-OP operates for the benefit of its user-members to meet a common need. Owned by its user-members—each user-member shares equitably in profits based on his or her use of the goods or services produced by the co-op. Democratically controlled and each user-member has a voice and vote.
At the turn of the century, facing the growth of corporate agribusiness and increasing monopolization of agricultural markets, family farmers and ranchers recognized cooperatives as an effective tool to help them remain economically viable. During the decades following the Civil War, corporate interests established a ruthless control over large segments of American commerce: banking interests, the railroads, the meat trust, the sugar trust, giant urban life insurance companies. Competing with these giants was vital to family farm survival. Many corporations had created buying and selling combines, with arms-length transactions among their own holdings, to eliminate competition, corner and depress markets for raw materials, and maintain high prices for manufactured and processed products. President Theodore Roosevelt described this era in his autobiography: “A riot for individualistic freedom for the individual… turned out in practice to mean perfect freedom for the strong to wrong the weak.” Laws to control the power of the giant corporations were archaic and impotent to help the agricultural producer.
Farmers Turn to Cooperatives
In this historical setting, Farmers Union leaders began creating strong working relationships. That cooperative spirit remains a cornerstone of Rocky Mountain Farmers Union today. In cooperatives the producers found a form of competitive enterprise solidly rooted in democratic control by the membership. Cooperatives allowed independent farms gain equity in the market place; they enhanced farm bargaining power with the giants of industry; and they helped reduce exploitation of farm producers and prevent price gouging suffered by both producers and consumers. Many cooperatives organized in Colorado between 1908 and 1960 and in Wyoming between 1944 and 1960 were small, limited by their early market potential. Even so, Farmers Union has built more cooperatives in the Rocky Mountain region than any other organization. In these smaller cooperatives, democratic control by the membership was of major educational importance, because these ventures often represented the first business experience ever for the cooperating farmers, ranchers, and consumers. Members developed confidence and business skills necessary to competitive survival. Some cooperatives did not survive, but those that did were stronger with passing years. These cooperatives, born of the Farmers Union, were nurtured financially and with educational meetings designed to attract new members, camp programs to teach both young and old the principles of successful cooperative enterprise, and other support from the RMFU in times of crisis.
Soon after World War I, business opponents of farm cooperatives in Colorado began attempting to scuttle farmers’ efforts to create cooperatives and sustain buying and marketing associations. It was not unusual for a large corporation to wage price wars against a cooperative, underwriting losses sustained by their retail business outlets in order to ‘break’ the fledgling cooperative.
After World War II, these corporate interests contended that patronage savings should be considered taxable income, for example. This tactic continued until February 1951, when a push in the Colorado legislature for a tax on retained patronage savings was soundly defeated.
The Rocky Mountain Farmers Union has never faltered in its support of farm cooperatives, from its early lobbying for passage of the Capper-Volstead Act to its defeat of numerous harmful cooperative tax laws. The RMFU Cooperative Development Center was created to organize RMFU’s efforts in this vital undertaking.
Formed in 1996, the RMFU Cooperative Development Center has worked with and helped grow more than 100 cooperatives, LLC’s, and other businesses and organizations, with a focus on areas and professions suffering from economic stress, high unemployment, and high poverty.
Cooperatives are voluntary organizations, open to all people able to use their services and qualified for membership, without gender, social, racial, political, religious, or other protected class discrimination.
Cooperatives are democratic organizations controlled by their members—those who buy the goods or use the services of the cooperative—who actively participate in setting policies and making decisions.
Cooperative members contribute to, and democratically control, the capital of the co-op. This benefits members in proportion to the business they conduct with the co-op rather than on the capital invested.
Cooperatives are autonomous, self-help organizations controlled by their members. If the co-op enters into agreements with other organizations or raises capital from external sources, it is done based on terms that ensure democratic control by the members and maintains the co-op’s autonomy.
Cooperatives provide education and training for their members, officers, managers, and employees so they can contribute effectively to the development of their co-op. Members also inform the general public about the nature and benefits of co-ops.
Cooperatives serve their members most effectively and strengthen the co-op movement by working together through local, regional, national, and international structures.
While focusing on member needs, cooperatives also work for the sustainable development of their communities.
Cooperative developers subscribe to the highest level of ethics and shall declare any conflict of interest, real or perceived, so that they can be a credible source of objective feedback and an articulate advocate of the project as needed.
There are essential development steps that must be taken in a critical path to success.
An enthusiastic group of local, trustworthy leaders is a prerequisite for providing technical assistance. The effective cooperative developer nurtures that leadership by helping them shape a vision that will unite members and provide ongoing training.
Cooperatives only work when they are market driven; the cooperative developer works to ensure that accurate market projections precede other development steps.
Member control through a democratic process is essential for success. Success also depends on the commitment of the members’ time, financial resources, and loyalty to the cooperative.
There must be tangible benefits for members.
Steer Toward Revenue Generation: The cooperative’s products and services must generate sufficient revenue so the effort can be financially self-sustaining. Provisions must be made to share any surplus equitably.
Each cooperative responds to its unique economic, social and cultural context; as a consequence, each cooperative is different.
Cooperative developers link emerging cooperatives with established cooperatives to facilitate mutual communication and learning.
Cooperatives are tools for development and promote social empowerment and economic goals.
Understand that Cooperatives Work Everywhere: Applied appropriately, cooperatives have value to all population groups and for all businesses and services in the public and private sectors.
Applied appropriately, cooperatives have value to all population groups and for all businesses and services in the public and private sectors.
Opportunities for human cooperation exist throughout the world. Cooperative development transcends national boundaries.
Summary of Co-op Best Practices