ESTEVAN, Sask. – A new wave of co-operatives could be the answer to rural Saskatchewan’s woes, participants in a seminar here were told.
The name “new generation co-operative” has been applied to more than 70 co-ops formed in Minnesota and North Dakota in the last four to five years, said Murray Fulton, director of the Centre for the Study of Co-operatives at the University of Saskatchewan.
These co-ops, engaged mostly in value-added activities, differ from the traditional organizations in that they have restricted membership and two-way delivery rights.
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Membership is restricted by the selling of shares, he said. For example, a group of farmers in North Dakota wanted to raise money to build and equip a pasta plant. Each share purchased entitled the farmer to deliver one bushel of durum.
The co-operative “got equity capital up front and restricted its membership,” Fulton said.
Under a two-way delivery system, the co-op guarantees it will accept a certain amount of product from a farmer.
“Farmers have the right to deliver but they also have the obligation to deliver,” Fulton said. “If you don’t, the co-op buys it somewhere else and charges you.”
New generation co-ops are attractive because they bring people together, create jobs and gain power for rural residents. Members need to be strongly committed, able to work together and think long term, he said.
Bill Patrie, rural development director with the North Dakota Association of Rural Electric Co-operatives, said one of the dangers of restricted membership is copycat co-ops.
Nobody benefits
“If that happens you discount your product to get market share and then nobody makes any money,” he said.
Similarly, he said the key to success in Saskatchewan will be not copying North Dakota.
He said farmers should find markets themselves and use governments as allies.
“Farmers are smarter than you think. If they’ll accept the responsibility for solving their own problems, then the advisers just hang on for the ride.”
