Strengthening ag markets with co-ops (Keeping the Farm)
(Editor’s note: Perry Hickman is the state director for Virginia Rural Development.)
Farming is a naturally risky business that requires producers to assess the probable negative outcomes of every decision.
Agricultural cooperatives have adapted the risk pooling strategies of the insurance industry to offset the all too real financial challenges of working the land.
This time-tested approach can help independent farms succeed in the long-term while building more sustainable local food systems.
These member-owned and controlled organizations also fill market gaps to build stronger economies in the communities they serve.
That’s a win-win proposition and a major reason why USDA Rural Development (RD) provides funding and resources that can help foster and sustain this resilient and flexible business model in the Delmarva. RD Cooperative Services helps rural residents form new co-ops and improve the operations of existing ones in four important ways.
• Fostering Cooperative Development: USDA RD helps to fund Rural Cooperative Development Centers that offer technical assistance for those interested in forming new cooperatives or experiencing issues developing them.
This financing can be used to conduct feasibility studies, develop business plans, provide training and facilitate strategic planning.
These centers are also eligible to receive Socially Disadvantaged Groups Grants that can help them offer technical assistance for underserved audiences.
While the application window just closed for this funding, it’s still open for fiscal year 2023 Rural Cooperative Development Grants.
Visit www.rd.usda.gov/programs-services/rural-cooperative-development-grant-program for details.
• Investing in the Process. Cooperatives are also eligible for other RD funding programs such as Value-Added Producer Grants (VAPGs) and Business and Industry (B&I) Loan Guarantees. We’ve highlighted VAPGs in previous columns but not in this context.
These grants are available to co-ops as well as independent producers and producer groups and can be used for planning activities or working capital to produce and market new products.
B&I loan guarantees provide financial backing to convert existing businesses to employee-owned worker co-ops, purchase land and equipment and convert or modernize businesses.
Learn more at www.rd.usda.gov/programs-services/business-industry-loan-guarantees.
Sharing Data and Resources. Financial, social and operational statistics can offer valuable insights into the process of forming and running successful co-ops. We’ve been collecting this data from farmer, rancher, fishery and bargaining cooperatives for almost a century and will freely share the information to help strengthen other enterprises.
E-mail email@example.com to request available cooperative data.
Ongoing studies can also help co-ops deal with current and emerging issues and broaden understanding of principles and practices. Information, research and service publications are available online at www.rd.usda.gov/resources/publications-for-cooperatives.
• Engaging Stakeholders. The Cooperative Services Branch periodically sends out informational bulletins on USDA cooperative-related materials and products.
Visit our website at www.rd.usda.gov/va and click on the red envelope icon at the bottom of the page to sign up to receive emails through GovDelivery. Be sure to select the “Cooperative Practices” and “Annual Cooperative Statistics” topic areas.
Co-ops truly embody the spirit and intent of the USDA RD tagline “Together, America Prospers.”
These coalitions also align well with the independent spirit of farmers and ranchers because members make decisions together and share profits.
Most of America’s two million producers are members of one or more cooperatives, (according to ncfc/). How can we help support yours?