Octobers Cooperatives Month

Posted on 10/15/2010 at 12:00 AM by Christa Hartsook

October is not just about cool breezes, falling leaves, and smiling Jack-o-lanterns. October is also Cooperatives Month --- a time when we recognize a business model uniquely positioned to deliver powerful results, because of the way it is organized, because of its economic impact, and because of its accountability.

A cooperative is a business jointly owned and democratically managed by its members, to provide the goods or services they need but cannot get at the price, place, or level of quality they want. People create cooperatives to provide the products or services needed by all members, to keep their businesses, families, and communities strong.

You don’t always have to be a member of a cooperative to buy its products or use its services. In fact, Americans do business with cooperatives every day, most without even knowing it. Many nationally known brands and products are backed by cooperative businesses, including Ace Hardware® stores, Carpet One® flooring, Land O’ Lakes® butter, Nationwide® insurance, Ocean Spray® cranberries, REI® outdoor equipment, Sun-Maid® raisins, and Welch’s® grape juice. 

And the economic impact is considerable. In the United States, cooperative businesses serve about 120 million people, or four out of every ten Americans, according to the National Cooperative Business Association. As documented in a study by the University of Wisconsin Center for Cooperatives, almost 30,000 cooperatives currently exist in the U.S., owning more than $3 trillion in assets and generating more than $500 billion in revenue. Cooperatives can be found in virtually all business sectors, from agriculture and utilities to credit unions, insurance, housing, and health care.

Because the business owners are, in most cases, also the people who use its services, cooperatives are usually locally owned and locally accountable.  Even in larger cooperatives, that accountability to the member owners is paramount. In a recent interview with Forbes magazine, Ocean Spray® CEO Randy Papadellis observed, “What makes us unique vs. the more traditional business model is that we seek to maximize the cost of our largest raw material. . . . . Cranberries are our largest raw material purchase, and we actually seek to pay as much for those cranberries as we can, to compensate our grower-owners.” Beyond the benefits to their member owners, cooperatives are known for supporting their communities, and they often offer scholarships and leadership programs for local students.

The first cooperative business in the United States is thought to be a Philadelphia company that provided fire insurance, formed in 1752. Over the next centuries, cooperatives flourished in the U.S., enabling dairy farmers to jointly process their milk into cheese in the 1800s, bringing electricity to isolated rural communities during the Great Depression of the 1930s, connecting members and farmers to provide natural and organic foods during the 1970s.

In the 21st century, the cooperative business model is more relevant than ever before. With renewed national interest in revitalizing both urban and rural communities, educational resources are needed to help people of all ages understand and benefit from the powerful potential of cooperatives. Now is the time to leverage the power of cooperatives to develop communities and to enhance prosperity and quality of life across the United States.

In pursuit of this goal, the national Cooperative Extension System, through its online education forum eXtension.org, is creating an essential source of high-quality, relevant, peer-reviewed information and education for successfully creating and managing cooperative businesses. With resources targeting people at all levels of knowledge and interest in cooperatives — from today’s managers and board members, to members of the public who want to learn more, to students who are looking for a source for a research paper or a career path — the Cooperatives space at eXtension.org will create a community of learning, networking, and interaction.

This October, we encourage all Americans to learn more about cooperatives, to buy their products or services, or to become a member. And, if you can’t find a cooperative where you live, get one started using the resources at the cooperatives page at eXtension.org!

Mary Holz-Clause
Associate Vice President for Extension and Outreach
Iowa State University

Edward G. Smith
Texas AgriLife Extension Service
The Texas A&M University System

Categories: General