The agricultural industry needs to know where it’s going before new co-operative development can really take off, says a University of Saskatchewan professor and expert on co-ops.
Murray Fulton told a Regina conference last week that lack of leadership or a clear direction for agriculture leaves co-op-minded farmers in limbo. They are not sure where co-ops will fit.
Federal and provincial programs that offer matching money for co-op proponents are undersubscribed and Fulton said that’s because there is no vision.
“Until we figure that out … we can have all the programs in the world and it’s not going to make any difference,” he said.
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“I don’t think we’re doing enough thinking in a really hard way about where agriculture is going in this province in the next 10 or 20 years.”
Industry and resources minister Eric Cline told the conference that he sees a vibrant, healthy, self-sufficient industry, but he, too, pointed out that the $300,000 in provincial money available for new generation co-ops is not used up every year.
As of Sept. 29, there were 11 new generation co-ops in the province, he said, although three of them have not yet been publicly announced.
Fulton said development in Canada has been slower than in the United States, where hundreds of new generation co-ops exist. He said legislation is not a barrier to co-op formation, but investment might be.
“For most co-ops the capital that they’re going to get comes through retained earnings,” he said. “Co-ops have to be profitable if they’re going to have access to capital.”
Fulton said there is a need for member education. A $5 membership is no longer enough. Farmers must be willing to invest and they have to balance member needs with those of the marketplace.
Some organizations are forming co-ops within co-ops. A new entity could obtain financing and lend it back to the original co-op. Others are forming joint ventures and strategic alliances with businesses and other co-ops.
“There is a lot of adaptation going on,” Fulton said.
Co-ops are also wondering about their role in the world of “new agriculture,” said Brett Fairbairn, director of the Centre for the Study of Co-operatives.
Farmers are dealing with genetically modified organisms, information technology, new chemicals and varieties, plus increased dependence on others in the value chain, said Fairbairn. There is more risk and liability.
That could spell more opportunity for co-ops as farmers look for ways to share risk, control costs and meet consumer demand.
Fairbairn said farmers need to think about how they can best respond to demands for improved food quality and safety and environmental controls, what they can do to help rural communities survive and prosper, and when a co-op structure is an appropriate response.
“The really important thing is to know where you’re going in the first place,” added Fulton.
