DENVER—Rocky Mountain Farmers Union (RMFU) President Dave Carter testified today before the U.S. Senate Agriculture Committee on the importance of funding programs for farmer-owned cooperatives. Carter’s testimony was made at a hearing on the next farm bill.
“The next farm bill must have adequate resources to help producers further participate in the food chain to create viable competitive alternatives in a rapidly consolidating marketplace. New generation cooperatives are a valuable resource for producers,” Carter told the committee.
Carter, who serves as secretary-treasurer of the Mountain View Harvest Cooperative talked about the importance of government programs that provide loans, grants and other types of services to fledgling producer-owned cooperatives. Mountain View Harvest Cooperative, which eventually raised $5 million to purchase a state-of-the-art bakery, in its infancy used a $100,000 Rural Business Enterprise Grant from the U.S. Department of Agriculture to conduct its feasibility analysis. Following the analysis and formation of a business plan, 500 shares of stock were marketed for $12,500 apiece. Each share carried the right and obligation to deliver 900 bushels of wheat to the co-op. The cooperative utilizes the best wheat for the bakery operation and markets the rest on the open market. Since its purchase by the farmer-owned cooperative, the bakery has more than doubled its production.
“Not too many wheat farmers have $12,500 lying around in the kitchen drawer to invest in a new business concept,” Carter said. “But the local Farm Credit System stepped up to the plate with an attractive signature loan program in which producers could borrow the funds necessary for their equity investment.”
Carter recommended that the next farm bill have the following provisions to assistance farmer-owned cooperatives:
•Adequate funding for feasibility studies
•Rural Cooperative Development Grant Program funding at $50 million to allow for the operation of a cooperative development center in every state
•Strengthening of the Business and Industry Loan Guarantee program
•Continuation of the Value-Added Grant program that was initiated in 2001
•Directing of federal agencies to increase the percentage of products they purchase from locally-based, producer owned enterprises.