RMFU Cooperative Development Center Reorganizes 
The Rocky Mountain Farmer Union Cooperative Development Center staff regrouped and reorganized after the passing of former Director, Bill Stevenson. Email Sandra.Baca@rmfu.org

As part of this reorganization Sandra Baca accepted the position of Assistant Director of the Rocky Mountain Farmers Union Cooperative Development Center. She manages the administration of the Co-op Center and is responsible for reviewing and assessing new clients, monitoring work plans, collecting data, preparing quarterly reports, and evaluating the performance of projects. She has initiated the process of reviewing and upgrading many systems to improve service delivery to clients. Additionally, she is responsible for the Co-op Center’s publications, web presence, social media, and content. Sandra also supports RMFU’s Education and Communication departments and has done so for the past four years.

A teen mother and right out of high school, Sandra worked as a graphic technician for Thomson Reuters for sixteen years. This is where she developed her graphic design and technical skills. As her children got older, she left the security of that position to pursue her dreams of attending college where she enrolled at Arapahoe Community College and studied criminology and worked part-time in the computer lab and as an office manager at a local church. She achieved her Associate Degree in Applied Science and continued her education at Metro State University of Denver and plans to return and complete the final credits of her bachelor’s degree.

Sandra is a board member at Community Ministry Food Pantry in Southwest Denver and sits on the advisory committee of Bridging the Gap: Kids and Cops whose mission is to create better relationships between kids and cops. She also is a core group of advisors working on a Southwest Denver Food collaborative. In 2019 she graduated from the Family Leadership Training Institute as a family and community leader and completed Phase II Facilitator Training in Conflict Resolution.

Sandra is a native of Colorado and has lived in the Denver Metro area with her partner, Johnny, for 26 years and their blended family of five boys and one girl and 12 grandchildren, all of whom reside in the Denver Metro area. When not spending time with her family, Sandra enjoys quiet time with her two dogs, a Labrador named Cornelius and Doberman named Snoop, and trying to grow her first garden.

“I appreciate having the opportunity to work and grow with an organization like RMFU. I get to have a voice on issues that are important to me, my family, and my community. Healthy local accessible food for all, strengthening our local economy, and create thriving communities that have faced inequity and exclusion is something that I am passionate about and excited to be part of.”

Cooperative Roots in New Mexico

By Susann Mikkelson, RMFU Co-op Center Cooperative Development Specialist a long-time rural activist, is a part-time cooperative development specialist with the Center, serving as the Center’s main liaison in New Mexico, as well as assisting with other RMFU efforts in the state. Susann has expanded the Center’s reach across New Mexico.

Cooperative businesses have varied reputations in New Mexico, as is the case in many states and regions. Being a mostly rural state, New Mexico has widely known rural electric co-ops, not all of which have a strong reputation for being democratically controlled and managed. This is partially a function of the changing times and growth and expansion of these cooperatives, and partially a lack of focus on the REAs’ parts on the Cooperative Principles and member engagement. They have also become somewhat political, which diverts attention from their core business of providing electricity to their member-owners.

Many New Mexicans are not aware that they patronize – and are part owners of – a number of cooperatives. As George Cheney points out in another article in this newsletter, many times patrons are not aware of the fact that their patronage and membership make them part owners, or that this means they have a voice in the overall operations of the cooperative.

There are a few long-standing co-ops that diligently work to keep their member-owners engaged, and to ensure they realize both the opportunity and the responsibility of their membership. One such example is La Montanita Co-op, a community-owned grocery store and a regional food distribution center, formed in 1976 in Albuquerque. This consumer-owned cooperative has done a stellar job of enticing members to attend and participate in their annual meeting each year, being active and diligent board members, and finding other ways to engage. Indeed, at times, this has created some turmoil in the Co-op; but they have continued to use the democratic process to work through the conflict and thrive.

I have recently had the tremendous opportunity – and still have it – of working with another long-standing New Mexico cooperative, though one less prominent in the public view. This cooperative deserves to be recognized for its stamina and fortitude.

The New Mexico Producer and Marketing Cooperative was formed in 1971 by a group of experienced and astute ranchers in northern New Mexico, with the intent of sharing physical plant resources for the production, handling and sale of their livestock. They made an agreement with a national nonprofit religious organization that had acquired a large ranch near Abiquiu Lake to transfer a small piece of land to the co-op, for the purpose of erecting facilities for sorting, finishing, weighing and shipping cattle and other livestock. The co-op built a barn, a large set of pins for sorting, holding, and finishing livestock, and a scale system and chute for shipping.

Over time, this co-op evolved, had various organizational and institutional partners and investors, and yes, experienced some turmoil – financial and otherwise. Some of the original goals and purposes of the co-op were never realized, due to lack of capital or other resources, or just a change in needs and interests. However, the co-op, in its various practices and operations, managed to stay active in one form or another, for most of its last 45 years!

When I began working with a handful of the NMPMC members in late 2018, I soon learned that these members were the sons, or in some cases grandsons, of the original co-op organizers. That, in and of itself, was impressive. Multi-generational ‘family’ businesses are not all that common in any corporate structure anymore, let alone in cooperatives!

We had work to do to bring the co-op into synchronization with today’s needs and interests of members and prospective members. Many of the original members were no longer actively ranching – some had even passed away – and new members had not joined or become engaged. In spite of these changes, however, some of the facilities that had been built in the early 1970s were still actively utilized on a fairly regular basis and had been maintained reasonably well. These needed some improvements and upgrades but were still functional. More importantly, the co-op had been very shrewd in maintaining records and documentation. It was clear to me that the founders of this cooperative had not only been astute businessmen with a community spirit, but they had passed along both of those characteristics to their sons and grandsons.

Throughout 2019, the members and I ‘dug in’ to the records, addressed the concerns the members had about moving forward, made some key decisions and carried out their plans to revitalize the co-op. They approved new bylaws and signed up new members in late 2019.

As 2020 unrolled and the COVID-19 pandemic struck the US, we all were taken aback and unnerved by the pandemic itself, and by the restrictions that have been employed to slow the spread of the virus. The crisis has impacted virtually every business and other entity, not to mention families.
The cattle industry, already facing some tough times due to drought and low market prices, took another big hit when ‘the big four’ packing plants were forced to slow their processing or shut down due to outbreaks among their employees. Ranching is not an easy business, under any circumstances. But, as a result, ranchers – indeed, all agricultural producers – have a resilience that we don’t often see in other industries. It is a necessity for them to stay the course from year to year.

The pandemic has impacted the co-op in some ways, such as an inability to handle livestock events and conduct board meetings and an annual meeting as they normally would have done. But it has not stopped them, and really, hasn’t slowed them down much!

During 2020, the co-op developed an agreement with a young, entrepreneurial veterinarian to offer some veterinary services to co-op members (and others for a fee) at the facilities. The vet has been able to get some small business funding to purchase some equipment that is needed for her services, and to offer some programming free or at a reduced cost to members and other producers. More is being developed and will continue.

In addition, the NMPMC has begun making some of the upgrades and needed improvements to the facilities – thanks to the sweat equity of some of the members. There are plans to purchase a new, digital scale system, to add some pens, install new barn doors, and – eventually – to add new public restrooms. There is discussion about relocating the entrance (no small feat!), and the possibility of working with a solar company to install a small solar farm on the property. These are just ideas, but they demonstrate what has been and continues to be the secret to this co-op’s ongoing survival and viability – a shrewd understanding of business and perceptive recognition of the need to continue to grow, develop and adapt with the needs and interests of the members/customers and the times in general.

In my 16 years working with farmers and ranchers, I have too often heard the phrase, “I am just a dumb farmer[rancher]” from a humble farmer or rancher. I am here to tell you, there is no such thing. And, as independent as ranchers are – and often need to be – the New Mexico Producers and Marketing Co-op is an exemplification of the capacity and value of working cooperatively toward shared goals and solutions when it is feasible and beneficial.

“Types of Cooperatives and Other Cooperatively Oriented Enterprises”
By George Cheney is professor emeritus in communication at the University of Colorado and an independent contractor working with RMFU

Most people have encountered at least one type of cooperative: maybe a producer co-op, like food giants Land O’ Lakes or Ocean Spray; a consumer co-op like most local food co-ops or big retailers like REI (Recreational Equipment Incorporated); a credit union or a mutual insurance company; or a rural electric cooperative, which are common around the country.  Some people are members of housing co-ops, or co-housing communities that may not be incorporated as co-ops but still function that way.

Cooperatives co-owned by artists and small food producers--usually linked to a physical common space--also can be seen in cities and towns around the country. These are organized in various ways, but in general they are marketing co-ops designed to help small-scale producers promote and sell their wares.  Some of these co-ops may also have special relationships for selling to restaurants or galleries or other establishments.

Even with all these familiar examples, it’s not common to connect the dots or to consider all the types that exist or would be possible. Plus, there’s often little awareness by members of a co-op such as a credit union that their membership entails certain benefits; and in this case is different from their being a client at a standard bank. 

A good place to start is with a definition of cooperatives. The International Cooperative Alliance (ICA) defines a co-op as “an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly-owned and democratically controlled enterprise.” This language casts a broad net, but it expresses the two main dimensions of co-ops as member-controlled businesses: member ownership and member governance. These are sometimes called the economic and the social-structural sides of cooperatives. Ownership means literally that members share the equity or value of the firm, whether the co-op is consumer, producer, or employee-owned (or some combination or variation). Governance refers to the decision making around key policies and plans, understood to follow the core agreed-upon values of the firm.  As part of governance, cooperatives have boards of directors drawn completely or largely from their membership. Specific arrangements vary, of course, depending on the type of business, what kind of participation is expected of members, and how active members are.  

 

For example, most credit union members are not very engaged in the decisions of the organization; they act much like consumers at a standard bank. Still the choice to be a member in a credit union may represent support for those values as well as the expectation of occasional dividends and other benefits.

Ownership means literally that members share the equity or value of the firm. In most cases, member ownership has certain monetary benefits: that can range from discounts at the local cooperative grocery store, to dividends paid to members as a percentage of profits, to access to lower interest rates, to actual ownership—meaning a share in the capital, the equity representing the firm. Dividends paid to members are generally called “patronage dividends,” stressing the fact of membership in the co-op. In the ICA definition above, the word “autonomous” is also important: this means that a true cooperative is not subject to control by outside investors, as, by contrast, it would be in a publicly traded corporation. 

There are dozens of other definitions of co-ops, but this one captures well their distinctiveness. Still, it’s true that many non-co-ops—especially ESOPs (or Employee Stock Ownership Plans) function cooperatively. ESOPs have their own legislative and tax history, but the important point here is that some ESOPs behave much like co-ops. For example, Gardener’s Supply in Burlington, Vermont not only devotes a substantial portion of equity to employees and strives to embody democratic practices but also makes significant contributions to the larger community.

A frequent misconception about various kinds of co-ops is that they are not-for profit. Those of us consulting on co-op start ups hear this question a lot. There’s a common stereotype that co-ops aren’t really that interested in or good at making money! This is just one of the stereotypes about cooperatives in the US that need to be overcome. Another is that co-ops can’t grow; yet, there are examples of cooperatives with hundreds or even thousands of members.

In reality, most co-ops are for-profit enterprises. However, due in part to highly variable corporate and tax laws across the states, in some cases, it can be more advantageous for a new co-op to incorporate not as a cooperative but as a different business form, such as an LLC (limited liability corporation) or a non-profit (of which there are several types under federal  tax codes). Such a move for the founding group can allow them to function cooperatively (in both senses described above) yet have a business status that works well for them in terms of their mission and goals and in the state in which they are operating. 

For example, the Colorado Grain Chain was incorporated in 2019 as a way to bring together growers, distributors, millers, brewers, bakers, and consumer representatives in a collaborative enterprise that is organized both vertically (in terms of seed to mouth, if you will) and horizontally as a network for shared resources and coordinated efforts. Ultimately, the founders decided to incorporate as a 501(c)5 non-profit, which is especially for non-profit labor and focused on agricultural and horticultural associations. One of the great strengths of the Grain Chain is in rural-urban linkages. That is also one of its most important lessons for responsible and creative initiatives in food systems—building bridges from farm to table. 

Other types of co-ops that may frequently be incorporated as non-profits are housing co-ops (for specific real estate needs) and community service co-ops (like day care centers). Community service co-ops are quite common in Canada and in parts of Europe, where they may be seen as part of the fabric of organizations and institutions that is understood as the “social capital” of a community or region.   

A non-profit status is typical for cooperative development centers around the US. RMFU, for instance, is a 501(c)5 foundation, under which a 501(c)3 co-op center operates. In some cases, co-op centers are connected with universities: for example, at the University of Wisconsin, Madison or Kent State University, Ohio. Co-op development centers may also arise independently, although in every case, they are well embedded in local, state or regional networks. Cooperation Jackson (Mississippi) is a good example of where there is a large-scale effort to promote and connect many co-ops. Co-op development centers are in practice economic development organizations.

If we look again at the two dimensions of cooperative involvement: member ownership and member governance, there’s a type where both dimensions—economic and social--can be maximized. That is a worker- or employee-owned co-op. There are worker co-ops in more than 50 different industries in the US, from food and beverage sales to machine shops to taxi services to home health care. In fact, one of the largest worker co-ops in the US is Cooperative Home Care Associates, in the Bronx, New York, with hundreds of trained worker-member-owners who are part of a dispersed network of service providers.

Whereas in the case of ESOPs in the United States, a portion of the equity or value of the firm is literally owned by employees, in a worker co-op it is mandated that all or nearly all of the equity is owned by worker-members. The only exception is when the co-op decides to sell a certain amount of stock to raise capital beyond what worker-owners are able to invest themselves. That additional capital is normally “class B” stock, where investors have no voting power and therefore cannot influence the policies or directions of the company. Investors endorse the values of the firm and usually receive modest dividends. 

Equal Exchange of Massachusetts, a well-known vertically as well as horizontally organized maker of food products (like coffee, chocolate, etc.), is primarily a worker co-op. Equal Exchange has close relationships with growers and producers, notably in Latin America.  At the same time, it takes on a “hybrid” aspect by occasionally selling class B stock to consumers and other supporters.

Full-blown “hybrid” cooperatives are where investors have significant investments alongside the equity owned by other members. If these are worker cooperatives that abide by traditional principles of capital control, the dividends for outside investors cannot exceed 8% and may be fixed, say, at 5%. The incentive for moving in a hybrid direction is not only to expand the capital base of a co-op but also to allow for significant expansions—such as when a group of growers decide to create their own food-processing facilities. 

What are commonly termed “next generation cooperatives,” some agricultural production co-ops will require large investments of member-owners in order to cover machinery and technology which will then be owned by the co-op.  In this way, the co-op moves to value-added processing by the producers themselves. These are most common on the Great Plains in the US and Canada for grain and other food production. NextGen co-ops are also found in fishing and forestry industries.

Considering different types of financial investment leads naturally into co-ops with different types of membership: multi-stakeholder co-ops. In all the types we have discussed so far, there is one principal class of membership—producer, consumer or worker. In recent years, cooperators have been pushing the boundaries of the idea of a single type of membership. For example, a food co-op can include two or even three classes of members: producers, workers, and consumers. Multi-stakeholder co-ops then need to delineate different types of involvement, investment, voting privileges, and dividends in accord with these classes. 

A multi-stakeholder co-op can be a viable route for other fields, too, like journalism and media, where maintaining sufficient financial support and a wide readership is even more critical today than ever before. Although the new media and newspaper co-ops vary in terms of membership/ownership structure and extent of reach, a good example of a multi-stakeholder co-op is the employee-and-readership owned alternative weekly is The Devil’s Strip in Akron, Ohio, with over 200,000 members.

The big take-away here, besides the power of cooperation, is about creativity in organizing work and business as well as seeing co-ops as part of larger community and regional networks. This is exactly why many co-ops are establishing new and diverse partnerships, for example, to include co-op education as part of the small-business curriculum in community colleges, as has occurred in Austin, Texas through the efforts of the Austin Cooperative Business Association. While entrepreneurship centers, whether in business schools and or in municipal programs, have traditionally had little connection to co-ops of any kind, that is changing.  

Thus, co-ops can bring together what would normally be independent entrepreneurs, creators, and inventors—which is another example of where cooperatives can defy stereotypes.

For example, 4 Corners Invents! Is a newly incorporated worker co-op of in the town of Aztec, New Mexico, formed through the facilitation of RMFU. This co-op strives to provide everything from technical assistance to legal support, to camaraderie, first, for its member-owners but also to a broader community of entrepreneurs that can eventually range across the state.

Another important bridge is between co-ops and organized labor. It was, after all, early labor organizations in the US that first created worker co-ops, dating back to 1794 on the East Coast. The separate ways that unions and co-ops have gone are again coming together in the form of union-worker co-ops in Cincinnati and elsewhere. Typically, in these firms, the union takes a worker-advocacy role within a structure where all employees are owners and engaged in governance through the one-member, one vote principle.

Finally, we increasingly see cooperation among co-ops, or what’s generally called inter-cooperation. For example, Namaste Solar in Boulder, Colorado, which focuses on solar power installation, has helped to create a co-op cluster—a federation--where distinct co-ops have different business emphases like purchasing and financing. Such a diversification and mutual support strategy engages diverse stakeholders and strengthens the market position and influence of the co-ops within that industry.

As the National Cooperative Business Association reminds us on its website, co-ops may look on the outside to be little different from other types of businesses. But, behind the scenes what makes most of them distinctive is their culture as well as financial and organizational structures. Co-ops try to embody certain principles, especially shared equity and democratic practice, and make them a part of their daily functioning. The Community Purchasing Alliance in Washington, DC, consists of churches and schools that came together to share utilities and other costs but now is also engaged in incubating small, community-oriented businesses. 

Although there isn’t the space here to discuss all of the cooperative principles (as we’ll talk about in other newsletters to come) the stress on shared values, such as democracy, equity, and responsibility—are what hold co-ops together and make them vital parts of communities.

Scott Zimmerman, a rancher in Wyoming, has worked with the Co-op Center since its inception providing technical assistance and outreach/education services for projects in Wyoming and northern Colorado. 



The Wyoming Food Coalition held its second statewide conference on December 10-11, 2020 on a virtual platform. Workshops included:

The coalition continues to expand its reach in members and involvement.

Central Wyoming College in Riverton is gearing up to offer short courses on butchering and processing of meats this course work in designed to compliment the recent purchase of a mobile slaughter system. They hope to be fully operational later this spring. 

E-commerce Solutions for RMFU members and Co-op Center Clients

One of the bright spots of 2020 was on-line sales for family farmers and food and farm cooperatives. For the operations that had existing E-commerce platforms or were able to pivot to online sales, in many cases, realized huge increases in sales. This was true across the board for livestock products, produce, seeds, and value-added goods. 

This sales opportunity has also led to new cooperative ventures. In the Lamar area of Southeastern Colorado, for example, a small group of producers have banded together to market their products together through a combination of retail farm stand and subscription program. (Subscription programs generally involve consumers purchasing “shares” or “memberships” to buy food, often in the form of pre-packed boxes). 

Seeing the surge in alternative buying patterns, farmer direct sales, and proposed cooperative solutions to meet consumer-demand, the Co-op Center engaged the Barn2Door company through a cooperative agreement to provide RMFU members and co-op Center clients with new tools, technical support and discounts. To learn more about Barn2Door products, check their website and watch their video demo: 

https://www.barn2door.com
The benefits for our members and Co-ops are as follow:

It’s that time of year again, for the NFU College Conference on Cooperatives. This year our event will be a virtual 2-day session. RMFU invites you to share with students and other faculty who may benefit from the upcoming College Conference on Cooperatives. The conference features presentations by cooperative leaders from all across the cooperative spectrum, and is beneficial both to beginning students of co-ops and to students with some previous co-op education. Contact Jennifer.Bahr@rmfu.org for the registration link and for an invite to a special networking event available to RMFU.