THIS week has been designated to recognize co-operatives in Canada, so
it’s a fitting time to evaluate the role people want co-ops to play in
the future.
If members take their co-ops for granted and are not actively involved,
they may find that modern co-operatives are not what they envisioned.
Co-operatives around the world are changing and different themes are
emerging. The familiar grain elevators, grocery stores and credit
unions on main street are slowly disappearing. Members often have to
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travel greater distances to support their co-ops.
But co-operatives remain an important thread in the fabric of our
society, especially in rural areas, extending as they do to include
financial, agricultural, housing, health and day-care operations.
According to the Centre for the Study of Co-operatives in Saskatoon,
“more than half of Saskatchewan households have memberships in credit
unions and other co-ops.”
The International Co-operative Agricultural Organization says there are
more than 400 million farmers involved in co-operatives and they
produce more than 50 percent of the agricultural production and
marketing in the world.
Kim Zeuli, associate director of the University of Wisconsin’s Centre
for Co-operatives, last month told a conference in St. Paul, Minn.,
that co-ops are changing.
“The traditional co-ops had a history of concern for the community,
often at their peril,” she said. Now co-ops are “concerned with bottom
line profits, with very little going to the community.”
Her research has shown other trends: more emphasis on value-added; a
change to less farmer control; business tied more to environmental
initiatives; new partnerships with companies that may have been
philosophical foes in the past; communities becoming a challenge
instead of support for some types of co-ops; more innovation as farmers
look for new markets and accept new production practices; and growing
questions of the leadership and direction taken by co-operatives.
Zeuli noted co-ops are not for everyone. They require a lot of equity,
and farmers planning a business venture should consider whether that is
the best model for them.
Zeuli also advised farmers to be more critical of new ventures: “Are
we so happy that people are doing something that we don’t ask the tough
questions?”
Farmer confidence in some of the bigger co-operatives might have been
shaken in recent years. Declining profits and plummeting share values
in Canadian grain co-operatives are among the reasons.
In June, Farmland Industries Inc., the largest farmer-owned
co-operative in the United States with $12 billion US in annual sales,
filed for bankruptcy.
But as AgriMarketing magazine recently emphasized, sometimes problems
“have more to do with governance and management issues than with the
co-op business model.”
Zeuli gave examples of members who took their co-ops for granted,
didn’t attend the annual meetings and didn’t ask about operations or
direction. As a result, decisions made by management adversely affected
the members.
That’s the crux. Support appears strong for co-operatives in general,
but in many cases members should take more interest in the business
side.
Canadian co-op members should be aware of international trends
affecting co-ops, and ask questions about their local ones: why was the
co-op created? What are the goals and are they being met? Do members
agree on the goals? Should their business remain a co-operative?
Those at the Centre for the Study of Co-operatives in Saskatoon believe
co-ops have a role for the future.
Director Brett Fairbairn said in remarks earlier this year that co-ops
“are the cornerstones of community and regional economies.”
He said they “straddle the boundary between the market and the
community. They are economic organizations formed by ordinary citizens
to address economic challenges. They mediate the relationship between
global economic tends and local needs and aspirations.”
To simplify greatly, then, the original attraction of co-ops was likely
the human touch, the sense that community members could work together
on economic development for mutual benefit.
That same sense must be preserved in modern co-ops if they are to
continue as viable investments and community builders.
