RMFU Cooperative Development Center highlights co-op importance

DENVER—The Rocky Mountain Farmers Union (RMFU) Cooperative Development Center is taking this occasion of National Cooperative Month, which is celebrated in October, to remind producers and consumers of the important part played by cooperatives in today’s economy. According to the cooperative sector, U.S. cooperatives serve four in 10 Americans or 120 million people, with the ag sector alone providing approximately 255,000 jobs.

“This year’s theme: ‘Cooperatives: Owned by our Members, Committed to our Communities’ reflects the fundamental cooperative principle of service to and concern for community,” said Robert Mailander, director of the RMFU Cooperative Development Center. “Cooperatives operate in nearly every industry, including agriculture, food retailing, consumer product retailing, childcare, energy, utilities, financial services, and health care,” he added.

The RMFU Cooperative Development Center was established in 1995 to assist farmers, other rural residents, and other groups wishing to form value-added cooperatives. ‘Value-added’ is the term used to refer to the process of changing a raw product or commodity into a finished or retail product. For example, a farmer can sell a bushel of wheat to a processor or he or she can be a member of a cooperative that mills, bakes, and markets bread from wheat produced by its farmer-members.

“The goal of the value-added cooperative is to improve the producer’s bottom line, or in the case of a supply cooperative, to assist the producer by supplying what he or she needs to make the farming operation successful and/or to supply these products at a better price,” said National Farmers Union director of economic and cooperative development Jeff Moser.

A major player in the ability of the center to offer this assistance is U.S. Department of Agriculture (USDA) Rural Development’s Rural Cooperative Development Grant program and Rural Business Enterprise Grant program, which in 2004 jointly made available $373,799 to the center for groups wishing to establish cooperatives. The grant money was awarded on a competitive basis to help foster rural cooperative development and is part of an on-going relationship between RMFU and USDA.

“This is a very important partnership between RMFU and USDA because it enables the RMFU Cooperative Development Center to offer expertise, legal assistance, and grants to those groups with viable business plans for cooperative structures,” Moser said. “Rural America continues to be challenged economically, and this relationship is a good way to offer an opportunity for rural communities to help themselves.”

The RMFU Cooperative Development Center has assisted a variety of producer groups in cooperative development since it was established over a decade ago. Examples include value-added meat marketing, fruit and vegetable consumer distribution, and a commercial bakery.

“On one hand, successful cooperatives are operated like businesses in that they have accountability to a board, they must operate profitably, and they hire and compensate people commensurate with their skills and training,” said Mailander. “However, the cooperative differs from the corporate structure in that every member has a say, through his or her vote, in how the cooperative should operate. Co-ops are creating jobs, income and opportunities in their communities every day.”