Rural Defending Your Turf Defending Your Turf COOPERA COOPERA SA/RrlDvlpet May/June2004 USDA /RuralDevelopment efforts aresoessential Why co-oplegislative TIVES TIVES Organizations serving co-ops serving S PECIAL page 18 S ECTION COMMENTARY

The extended family

No man is an island, nor is any scope of these efforts, here are just a the Newsline section of this issue for cooperative. few highlights from the special section: several news items that describe more Regardless of what purposes coop- • National Milk Producers Federation than $500 million in USDA loans and eratives serve, they are all strengthened is strengthening the dairy industry grants recently awarded (or soon to be — and the scope and impact of their through the Cooperatives Working awarded) for rural electric, broadband operations amplified — through a sup- Together (CWT) program, a self- and renewable energy projects. porting network of private sector and help effort to balance milk supply Space didn’t permit us to list every governmental organizations dedicated and demand, and by proposing organization that has played a major to the belief that, through cooperative changes to the dairy price support role in helping cooperatives. On the businesses, there is nothing Americans program that will prevent farm-level agricultural front alone, the American cannot achieve for themselves. prices from dropping below $9.90 Farm Bureau Federation, National More than 120 million people are per hundredweight. Farmers Union and National Grange members of 48,000 cooperatives in • National Council of Farmer have played key roles in helping estab- the United States alone. Worldwide, Cooperatives is striving to improve lish and promote cooperatives. So do cooperatives serve some 730 million co-ops’ access to capital and is sup- numerous other ag commodity boards members. Those are numbers often porting legislation that would elimi- and associations. trumpeted each October during nate the third layer of taxes imposed Likewise, virtually every arm of Cooperative Month. But they should on farmer cooperative dividends. USDA — the Farm Service Agency, be cited in speeches and articles • National Cooperative Business Natural Resources Conservation throughout the year to help commu- Association has organized opposition Service’s RC&D committies and nicate just how far-reaching the co-op to a ruling that threatens to throw Cooperative State Research, Education system of business has become. the balance sheets of thousands of and Extension Service, to name just a Whether it is to process and market co-ops into chaos by reclassifying few — in one way or another impact their crops, to gain access to dependable member equity as debt, and has farmer cooperatives. You can find out and affordable energy and telecommu- launched an initiative to expand the more about these and any other USDA nications services, to secure credit or role of co-ops in creating economic agency or program through the housing, or for nearly any other service opportunity in inner cities. www.usda.gov website. We’ve also or product under the sun, cooperatives • National Rural Electric Cooperative included websites and other contact are delivering every minute of every day Association’s legislative and regulato- information for every organization for their members. This wouldn’t be ry efforts are focusing on controlling included in the special section, and we possible without an infrastructure of costs for consumers, protecting them urge you to find out more about them. supporting organizations that do every- against market power abuse and anti- So, while “user owned, user con- thing from giving their member coop- competitive behavior, and on pre- trolled and user benefited” remains the eratives legislative clout to providing serving the co-op governance struc- mantra of the nation’s family of coop- director training programs and educa- ture of its members. eratives, let’s never forget that we’d be tional materials needed to attract and a pretty dysfunctional family, providing inspire the next generation of co-op We’ve also provided an overview of fewer benefits to fewer people, without leaders and members. how USDA Rural Development is a solid infrastructure of supporting A special section of this issue, which helping to improve the quality of life organizations. begins on page 18, provides an and create jobs in rural America, and overview of some of the major organi- — in particular — the many ways its Dan Campbell zations supporting cooperatives and Cooperatives and Rural Utilities Editor highlights some of their recent accom- Programs help the nation’s farm and plishments. To provide an idea of the utility co-op sectors. Also check out

2 May/June 2004 / Rural Cooperatives Rural May/JuneCOOPERACOOPERA 2004 TIVESTIVESVolume 71 Number 3

FEATURES 4 Defending their turf Growers see co-op’s legislative action as essential to future of nation’s sugar industry Rural COOPERATIVES (1088-8845) is published bimonthly by Rural Business–Cooperative Service, By Dan Campbell U.S. Department of Agriculture, 1400 Independence Ave. SW, Stop 0705, Washington, DC. 20250-0705. p. 4 The Secretary of Agriculture has determined that 9 Co-op born of growers’ frustration with publication of this periodical is necessary in the transaction of public business required by law of processor’s lack of long-term outlook the Department. Periodicals postage paid at Washington, DC. and additional mailing offices. Copies may be obtained from the Superintendent of Documents, Government Printing Office, Washington, 11 USDA co-op development efforts DC, 20402, at $23 per year. Postmaster: send address change to: Rural Cooperatives, USDA/RBS, Stop support commercial farming in Ghana 3255, Wash., DC 20250-3255. By John Dunn Mention in Rural COOPERATIVES of company and brand names does not signify endorsement over p. 11 other companies’ products and services. 14 Election and voting policies

Unless otherwise stated, contents of this publication of agricultural cooperatives are not copyrighted and may be reprinted freely. For By Bruce J. Reynolds noncopyrighted articles, mention of source will be appreciated but is not required.

The United States Department of Agriculture (USDA) prohibits discrimination in all its programs and 18 Special Section: activities on the basis of race, color, national origin, sex, religion, age, disability, political beliefs, sexual Organization Serving Cooperatives orientation, and marital or family status. (Not all p. 14 Includes: Accountants for Cooperative Communicators prohibited bases apply to all programs). Persons State Co-op Councils (Pg. 18); Cooperatives (26); Association (35); with disabilities who require alternative means for communication of program information (braille, large CoBank (23); Farm Credit Council(28); Association of Cooperative print, audiotape, etc.) should contact USDA’s TARGET National Council of Farmer Cooperative Finance Corp. (29); Educators (36); Center at (202) 720-2600 (voice and TDD). Cooperatives (24); National Rural Electric ACDI/VOCA (37); To file a complaint of discrimination, write USDA, National Cooperative Business Cooperative Association (30); Credit Union National Director, Office of Civil Rights, Room 326-W, Whitten Association (25); Federation of Southern Association (39); Building, 14th and Independence Avenue, SW, Washington, D.C. 20250-9410, or call (202) 720-5964 National Milk Producers Cooperatives (31); National Telecommunications (voice or TDD). USDA is an equal opportunity Federation (26); Rural Cooperative Development Cooperative Association (40); provider and employer. p. 18 National Association of Centers (32); National Cooperative Bank (41); Ann Veneman, Secretary of Agriculture Housing Cooperatives (26); UW, KSU & NDSU Centers for USDA Rural Development (42). National Society of Cooperatives (34); Gilbert Gonzalez, Acting Under Secretary, USDA Rural Development DEPARTMENTS John Rosso, Administrator, Rural Business- Cooperative Service 2 COMMENTARY Pandor Hadjy, Acting Deputy Administrator, USDA Rural Business-Cooperative Service 45 NEWSLINE

Dan Campbell, Editor 48 NEW USDA CO-OP PUBLICATIONS

Vision Integrated Marketing/KOTA, Design On the Cover: Have a cooperative-related question? A field of Red River Valley sugarbeets greet the new morning. American Call (202) 720-6483, or Crystal Sugar Co. members increasingly look to the co-op’s legislative office to Fax (202) 720-4641, Information Director, help “defend their turf” in trade talks. Likewise, many of the co-op organiza- This publication was printed with vegetable oil-based ink. tions featured in the special section of this magazine also tackle critical leg- islative issues for their member co-ops. Photo courtesy American Crystal Sugar Co.

Rural Cooperatives / May/June 2004 3 Defending their turf Growers see co-op’s legislative action as essential to future of nation’s sugar industry

By Dan Campbell, editor America’s beet sugar, is processed and marketed through e-mail: [email protected] producer-owned cooperatives. In the Red River Valley, the nation’s largest sugar co-op, American Crystal Sugar Co., f American farmers weren’t supposed to grow just celebrated its 30th anniversary. sugarbeets, surely there would be no Red River The roots of the co-op go back to 1935, when area growers Valley — quite possibly the world’s most per- began organizing the Red River Valley Sugarbeet Growers I fect garden for cultivating the crop. Not only Association, which ultimately purchased the privately owned do sugarbeets love the black-clay soil of this American Crystal in 1973. Today, the company markets about river valley that both divides and unites Minnesota and 18 percent of the nation’s sugar. It is often looked to as a role North Dakota , but the rainfall is more than adequate in model for new-generation co-ops and as a blueprint for how most years to raise the crop without irrigation. And the cold farmers can buy a major processor (see sidebar). winters allow the crop to be piled outdoors and stored for up Other U.S. producer-owned sugarbeet processing co-ops to 200 days or more, creat- include: Minn-Dak Farmers ing a longer processing sea- Cooperative, Southern son that helps maximize Minnesota Beet Sugar factory utilization. Cooperative, Amalgamated But the world is a fierce- Sugar, Michigan Sugar and ly competitive place when Western Sugar Cooperative, it comes to production of the latter two having been sugar and other sweeteners. formed in 2002 when grow- Indeed, some 110 nations ers acquired plants that grow sugarbeets or sugar- were formerly investor- cane, and many of them owned. seek to export their surplus, even if it means dumping Legislative actions seen sugar at prices below the as crucial to industry’s cost of production in order future to “buy” market share. Sugar producer Mark About 25 percent of the Nyquist spent much of the world’s sugar goes into for- “The world market and related political issues increasingly control our past winter in his farm shop eign trade, and virtually destiny,” says Mark Nyquist (center), seen here doing maintenance on a repairing and overhauling every producing nation beet harvester. USDA photo by Dan Campbell cultivation and harvesting uses some kind of trade- equipment in preparation distorting sugar subsidies to support their producers. for the 2004 growing season. Nyquist — whose father served High fructose corn sweeteners also are taking an increas- as American Crystal’s board chairman and grandfather was a ingly large slice of the nation’s sweetener pie (55 percent in founding member of the board — has spent many another 2000, up from 16 percent in 1970, according to USDA). And long night in the farm office, preparing for this season by artificial sweeteners also jockey for their place in the food pouring over the farm’s financial books, doing cost analysis ingredient trade. and budget projections, filing tax reports and doing all the So despite all of the Valley’s natural advantages, growers other paperwork which is now just as necessary as seed and here have their work cut out for them if they want to main- fertilizer to produce a crop. tain their market share. About 55 to 60 percent of all sugar During the course of this season, Nyquist will consult produced in the United States, and 90 percent of all of closely with an agronomist from the co-op to produce the

4 May/June 2004 / Rural Cooperatives best crop he can — both in terms of tonnage and sugar con- our destiny,” adds tent. When harvest season rolls around in mid-October, he’ll Nyquist, who spent sev- also coordinate closely with the co-op regarding harvest tim- eral years after college as ing and delivery. Nyquist says he takes pride in knowing the a pit trader in the dog-eat- co-op operates five efficient sugar processing plants up and dog world of the Chicago down the Valley, and that its joint marketing venture — Mercantile Exchange before United Sugars — has an expert team of agents selling the returning to take over the co-op’s sugar worldwide. family farm in 1996. He still Just as important as all those co-op functions, Nyquist trades part time, mostly in says, is American Crystal’s legislative effort. The United the winter, but sees the States has been under intense pressure in trade negotiations farm and sugarbeets as to open up the domestic market to more imported sugar. his future. American Crystal and other co-ops and industry trade orga- nizations have had to go to a full-court press to make certain Fast track deals a that their industry’s position is represented in these talks. major concern The North American, Central American and Australian free David Kragnes, trade agreements have all been tracked closely in America’s who grows about sugar-producing states. 1,400 acres of sugar- Although more imported sugar is gradually being allowed beets, wheat and bar- into the nation, the industry’s legislative efforts have been ley near Felton, generally successful in limiting these increases to manageable Minn., shares levels. But Nyquist and his fellow growers say their co-op Nyquist’s concerns. and the industry must continue to make their voices heard. “We’re worried that “One stroke of the pen in Washington, and it could we could be sacrificed potentially eliminate the sugar industry in the Valley,” if we aren’t active leg- Nyquist says while walking through one of his fields. “The islatively,” says world market and related political issues increasingly control Kragnes, a board mem- ber of both American Crystal and United Sugars. Fast-track trade deals are of particular con- cern, he stresses, because if approved, they can’t be amended by Congress. “In this battle, we want the export subsidies [of foreign nations] reduced before we reduce our border protection,” Kragnes says. Unlike grain, sugar has a very finite shelf life. “Sugar has a life-span of one year,” says Kragnes, who, like Nyquist, was born and raised on his family farm. “After that, it turns into brick.” Small countries produce sugar under labor and environmental con- ditions that would never be tolerated in the United States, Kragnes notes. The domestic industry currently supplies 85 percent of the nation’s sugar, with 15 percent imported. “By rationing up and down the level of A real slice of Americana: fresh-baked pies and a pitcher of lemon- ade made with American Crystal sugar. The co-op used this photo in imports, the government has been able a recent annual report to promote the wholesome goodness of real to control the supply and demand and sugar. Photos courtesy American Crystal Sugar Co. therefore control market conditions,”

Rural Cooperatives / May/June 2004 says American Crystal President and tose corn sweeteners in its soft drinks their growers so that they produce CEO James Horvath. “They have (as does the United States), it would enough to keep the plants operating done a pretty good job of doing that result in a sudden surge of sugar over the long term,” Berg says. To do over the years.” imports — perhaps 2 million tons, or this, “the 14 largest sugar-producing But in 2000, a glut, brought on by a 20 percent of total U.S. consumption, countries all intervene, in one way or number of factors, forced the nation to which would be allowed under another, through interest rate subsi- adopt a payment-in-kind (PIK) pro- NAFTA, Horvath notes. dies, direct payments, tariffs, export gram — which American Crystal lob- “We are working toward a new enhancements, etc. bied for — to remove excess “Relying on foreign sugar supply from the market. can work for a time, but when American Crystal employs a prices spike upwards, your full-time lobbyist, Kevin Price, consumers will pay through in Washington. Although the nose, if they can buy these days his home is in the sugar at all. Most people here corridors of the Capitol and its don’t know what they pay for office buildings, this native of sugar because the price is the Red River Valley is equally affordable and stable — so it’s at home in the beet fields and not an issue for most knows what’s at stake for Americans. That hasn’t always growers in the trade talks. been the case,” Berg says. “We cannot sit back and wait When the United States for things to fall in our lap,” becomes dependent on for- says David Berg, the co-op’s eign suppliers, it can become vice president for operations. vulnerable: think oil or coffee. “You have to find out what the The U.S. imports nearly all of issues will be, propose solu- How U.S. sugar growers fare in future trade negotiations is a top its coffee, and those prices tions and then work like heck concern for American Crystal Sugar board member David Kragnes. periodically spike and have USDA photo by Dan Campbell to get it done.” climbed steadily. “When cof- The PIK program is a case fee prices soar, people are in point, Berg says. “Within two weeks agreement that sets a specific amount outraged; ‘How can they do that to of the concept being floated, Kevin of sugar that Mexico can bring into the us?’ they ask.” But there’s not a lot and I were in the offices at USDA of United States and a specific amount of Americans can do about it, he notes. the people who administer the pro- high fructose corn syrup that can go Even though U.S. sugar policy has gram.” With them was Earl Pomeroy, from the United States to Mexico,” maintained a stable supply at an afford- North Dakota’s member of Congress, Horvath says. “The industries are rela- able price, “the program keeps getting who worked on the legislative autho- tively close to coming up with that beat up, because you look at the world rization. “Our efforts helped make it deal, from my perspective. This, of price for raw sugar and see it at six (the PIK) a reality. When we see course, will ultimately need to go to cents a pound. Domestically, it’s around opportunity, we are not shy about each of the governments for negotia- 21 cents a pound. How can we justify going out and getting it done. Not just tion and implementation.” that? Well, the average cost to produce the co-op, but the whole industry ben- sugar worldwide is 18 cents a pound; efits from our efforts.” Sugar factories: use ‘em or lose ‘em the average selling price for the past In the Australian Free Trade talks One major reason for so much gov- five years has been 8 cents a pound. this past winter, the United States elect- ernment involvement in sugar produc- You can’t sell a product long-term for ed to totally exclude sugar, based on a tion worldwide, Berg explains, is that less than half the cost of production. At decision that Australia was a developed once a sugar factory shuts down, it least you can’t do it unless there are country and therefore didn’t need any very seldom starts up again. The cost subsidies going to the producers.” increased access to the U.S. market. of retrofitting a plant that has been U.S. grain industry groups are often “We were obviously very pleased with idled for even a few years — and the proponents for free trade deals. So that outcome and we believe that it toll that temperature and humidity can U.S. trade negotiators have the unen- should become the template for future take on a shuttered operation — make viable position of making someone trade deals,” says Horvath. it very unlikely it will reopen success- angry regardless of their stance. Other One major concern on the interna- fully. critics of U.S. sugar policy, including tional front is that if Mexico were to “Therefore, most countries try very the candy and bakery industries, say switch from using sugar to high fruc- hard to keep the revenue stable to American consumers would benefit

6 May/June 2004 / Rural Cooperatives from lower food prices if the U.S. reinstituted a marketing allotment sys- owned subsidiary of American Crystal, market was open to more imported tem to better balance supply and called Sidney Sugars Inc. The Texas sugar. demand. In 2002, USDA set the allot- and Washington plants are being left “But the only way sugar can sell at ment at 7.7 million tons, raising the idle, with no plans to put them back such low prices is if you are getting a bar to 8.5 million tons in 2003. into production. government subsidy,” Berg maintains. “The [sugar portion] of the 2002 Nyquist says the plant acquisitions “Once a producing nation meets its Farm Bill was designed to fix the over- represent a solid business strategy. “I domestic sugar needs, they put the supply problem,” Horvath says. support the cooperative’s aggressive- surplus on the world market at what- “Market allocations were established so ness in purchasing these other plants. ever they can get for it, because each of the companies in the United We’re not trying to push anyone out of whatever they earn is gravy. It’s a States had the ability to market only a the market — we’re just defending our dump market that doesn’t reflect the certain amount of sugar.” turf. To do that, we need to acquire economics of producing it. If people For American Crystal, that would these plants just to keep the same share say they want 6-cent sugar, they must have meant cutting back acres by about and acreage base.” realize that were it not When the sugar for the domestic sugar market took a dive in supply, they would like- 2000, some investors ly be paying 18 cents to quickly fled and a num- 20 cents or possibly a ber of plants were put lot more.” on the block. Some “The domestic price other plants were in the United States is, bought by producers in fact, in the lowest (such as Western Sugar one-third of the world,” and Michigan Sugar). Horvath says. “The “There isn’t much else United States doesn’t you can do with a sugar export any sugar,” he factory; so some got stresses, and limits sold at fire-sale prices,” domestic producers in Berg says. Since then, order to balance supply the market has been and demand. “The generally stable, with result is that every sugar producers earning rea- exporting country CEO James Horvath talks with growers in one of a series of "summer shop meet- sonable returns. would like nothing ings" held around the Red River Valley each July. Kragnes says farm- more than to get a big- Photo courtesy American Crystal Sugar Co. ers, with their commit- ger chunk of the United ment to the long-range States market.” 10 percent, which Horvath says would future of their industry, make the ideal To put the picture into perspective, have threatened the co-op’s ‘critical party to own the processing and mar- Horvath says the U.S. sugar market is mass.’ “We would have had to cut back keting operations. But he says he’s about 10 million tons, of which U.S. from 500,000 acres to 450,000 acres. worried that talk regarding possible growers produce 8.5 million tons. More That would have increased our fixed changes in the co-op model could imported sugar, he says, would result in costs and driven down returns to our lessen grower control of the industry. lost sugarbeet acreage in America. grower-owners. So we had to look at “The bedrock of American farm “By taking away [sugarbeet] that as a serious situation and search cooperatives has always been, and must acreage...there will be more corn for ways to solve that.” continue to be, the Capper Volstead planted, more soybeans planted in this In part to help maintain its acreage Act,” which gives them the power to particular area, creating an oversupply allotment, American Crystal in 2002 jointly market their crops and prod- there as well. It would result in lower and in 2003 acquired four plants in ucts. “If you start messing with the prices and in more deficiency pay- other parts of the nation: Moses Lake, definition of a co-op, I fear you could ments. It is a serious problem.” Wash., Sidney, Mont., Torrington, jeopardize Capper-Volstead,” Kragnes Wyo., and Hereford, Texas. The continues. “I’m not happy with any Co-op buys plants to To rrington plant has been leased to the changes that allow large investors to maintain acreage base new, Denver-based Western Sugar get their foot in the door and buy a As a result of the market glut in Cooperative, while the plant in Sidney piece of our co-ops. Control follows 2000 and 2001, the 2002 Farm Bill is being operated under a wholly the money.”

Rural Cooperatives / May/June 2004 7 No option but whole lot of loyalty there. I don’t The multiplier effect of actual dollars to remain on guard know that locally grown sugar can and jobs generated by the nation’s farm Giving up on the trade battle is not command a premium.” economy is often estimated at a factor an option for the U.S. sugar industry. Nor do most consumers stop to of seven, and some have estimated that “It takes a lot of lobbying, and this co- think what would be lost if the sugar 20 percent of the nation’s workforce is op has been — and will continue to be industry stopped providing jobs and involved in the food and fiber system, — a strong advocate for its members economic synergies that boost the ranging from production through pro- on the legislative front,” Kragnes says. standard of living throughout the cessing, distribution and retailing. So has the American Sugarbeet Upper Midwest and other regions Nyquist says his basic outlook Growers Association, the Red River where it is grown, he says. remains “cautiously optimistic.” That Valley Sugarbeet Association and a The impact of losing sugar would was not the case in 2000, when sugar- number of other farm industry groups. ripple far beyond the sugar industry if beet payments fell to $32-$36 per ton With sugarbeets grown in 14 states, beet farmers are forced to shift to and margins were near breakeven lev- Kragnes says the industry can muster other crops, such as grains and pota- els for most producers. “I was not very considerable clout in the halls of toes. The University of Idaho did a optimistic then at all. There was real Congress. study in 2001 which projected that in cause for concern. But much as farmers might like to just Idaho, if the 200,000-plus acres of “Despite all of our natural advan- think otherwise, Nyquist says he does sugarbeets were switched to potatoes, tages, it is not easy to compete against not believe the average American growers of the latter crop would lose third world countries with labor costs consumer cares if their sugar is U.S. $105 million annually. that are a small fraction of ours and no grown or not. “They want good qual- American Crystal alone has an environmental standards,” he says. ity cereal, cake mix or whatever at the annual economic impact of over $1.5 “We can’t go down to their standards, most affordable price. If those prod- billion in the communities where its and it’s awfully hard to bring them up ucts are made with sugar from Brazil members and employees live and to ours. So through their co-ops, or Cuba, well...I’m not sure there is a work. growers must remain vigilant.” ■

American Crystal pumps $1.5 billion annually into the economy of the Red River Valley, where it operates five processing plants, including this one in Moorhead, Minn. Photo courtesy American Crystal Sugar Co.

8 May/June 2004 / Rural Cooperatives Co-op born of growers’ frustration with processor’s lack of long-term outlook

Editor’s note: The following article is largely excerpt- willing to sell 100,000 shares, or 9 percent, of American ed from “A Heritage of Growth,” which traces the histo- Crystal’s common stock, for $2.3 million. Through the ry of American Crystal Sugar and the Red River Valley purchase of those shares, they hoped to gain a voice in Sugarbeet Growers Association. the future direction of the company. Bloomquist informed the company of the association’s intent to buy Nothing frustrates a sugarbeet grower more than not the shares while simultaneously including a note that being able to deliver harvested beets to the processing asked whether the company’s board would entertain a plant on a cool, dry autumn day. But there were a lot of buyout offer based on book value for its facilities. frustrated growers around the Red River Valley on such During an industry meeting in Phoenix in March 1972, days in the late 1960s and early 70s. That’s because the the company indicated it would be interested in a sale, Valley’s dominant processor – American Crystal Sugar, although most officers and the directors had serious then an investor-owned company – was not investing in doubts that the farmers could pull off such a deal. At piling equipment needed to keep up with farmers, who that time, the company’s book value was 66 percent had made giant leaps in their ability to rapidly dig and higher than its stock was trading for, hence ears deliver sugarbeets. Virtually no maintenance perked up when there was mention of a sale was being done on pilers during the offsea- at those terms. Bloomquist was told to son, which lead to frequent breakdowns invite the growers’ executive commit- during harvest. tee to meet with the American Crys- Indeed, it appeared more and more tal board in Denver in one week. that “the company was being bled to If the idea of buying a sugar maximize short-term profits, without company scared the growers, los- making the type of critical capital ing such an opportunity was investments needed for the long-term worse. So the committee unani- future of the industry,” says American mously decided to pursue the buyout. Crystal board member Dave Kragnes, who Bloomquist may not have been universal- grows beets and grain on his Felton, Minn., farm. ly loved by the growers, but he was well respect- “The growers [including his father] could see that there ed and known as a man of integrity who was not afraid was money to be made if the plants were operated more of big ideas. The growers also had faith in their attorney, efficiently; truck drivers needed to be paid to drive, not William Dosland, one of the Valley’s most respected sit. When the company needed money, it simply cut legal counsels. He advised the growers’ executive com- back on capital expenditures. The trust was milking the mittee that the key to making a good deal was to hire the company dry. The growers felt they could run it better. ” right legal and financial professionals who could help The Red River Valley Sugarbeet Growers Association them through mountains of paperwork, including even offered to pay for some new facilities to help speed prospectus and proxy statements, and through potential- the harvest and stockpiling, but the company refused, ly rancorous negotiations with skilled corporate lawyers. fearing that growers might then want a voice in how the This they did, although the board had to swallow hard facilities were operated. In 1971, growers became more before agreeing to spend $500,000 for such services. worried when the company suddenly shut down its plant The law firm they hired quickly concluded that the in Chaska, Minn., rather than investing several million dol- company was not doing as well as indicated by the gen- lars to meet stricter air pollution standards. While earlier erous dividends it was paying; they suspected the com- plant closings had concerned growers, this one scared pany was playing tricks to keep stockholders happy. them. The company was also threatening to cut back Uncovering the company’s true worth, they advised, acres, along with rumors of a factory closing in the valley. would not be easy. In the face of these cutbacks, growers concluded Undaunted, on March 8, the full 40-member associa- that they could only influence the company’s direction tion board voted 37-3 to pursue a deal. from the inside. Al Bloomquist, the association’s execu- After meeting with the St. Paul Bank for Cooperatives, tive vice president, learned that food giant Borden was it was decided the company should be operated as a

Rural Cooperatives / May/June 2004 9 cooperative if a deal could be reached. Not only were Organized grower opposition circulated flyers say- commercial lenders not interested in offering long-term ing it would be better to let American Crystal go broke, financing, but a co-op offered tax advantages and liabil- or to ship their beets to processors outside the Valley. ity protections that a for-profit business did not. The The proponents’ education efforts stressed that the cost was calculated at $60 million, plus $26 million more buyout meant growers would own their beet contracts, to retire short and long-term loan obligations. The bank that they could vote in how the company was operated wanted growers to come up with $20 million. and that they would share in any profits. Further, the One week after making the initial proposal, the co-op would increase acreage and invest in plants for growers’ team flew to Denver to meet the company’s the long term. board. American Crystal directors were impressed by In the end, hope of success spoke louder than fear what the growers brought to the table and gave them of failure. one month, until April 15, to raise the money. The grow- On April 10, 1973, 1,500 growers jammed into the ers then hired the Wall Street investment firm of Loeb Grand Forks Armory to vote. Seventy percent of them Rhodes to polish their offer and, at the bank’s insis- (1,065) voted in favor. tence, hired a German company, BMA, to more closely The growers’ experts had to make sure there were appraise American Crystal’s seven sugar factories. no unresolved liabilities or outstanding tax issues. After BMA concluded that the factories were in better shape a month of negotiating, during which the growers’ team than the growers thought, and could be operated as had flown 100,000 miles back and forth to Denver, a they were. The Bank for Cooperatives issued a letter of deal was approved pending completion of financial credit for $66 million for the purchase, and $30 million arrangements and approval by American Crystal’s more for seasonal operating loans. It said it was willing shareholders. to study further loans for capital improvements. Financing for growers’ still hinged on the coopera- The growers were advised it would be best to form a tion of small, local banks and production credit associ- stock corporation to buy American Crystal, which in turn ations. In the end, nearly 60 Valley banks and PCAs would immediately be purchased by the co-op. But that loaned money to cover the growers’ investment. also necessitated bringing in an intermediate lender, Company shareholders overwhelmingly approved since the Bank for Co-ops could not finance a stock cor- the sale on Jan. 23, 1973. On Feb. 21, Crystal Growers poration. A consortium of four banks was forged to Corp. paid $86 million, then merged into American Crys- finance the initial buyout, until the co-op took over. tal and ceased to exist as a corporate entity. To finance the growers’ $20 million investment, the Later that night, a joint celebration dinner was held association developed a plan to expand the Valley’s at Denver’s Brown Palace hotel. Bloomquist recalls beet acreage and required growers to invest $100 for that several company directors told him they had never each acre of beets they raised. Total acreage base was even been in the Red River Valley, nor ever seen a sug- set at 200,000 – or 40,000 more than contracted for in arbeet. Most said they had doubted the farmers could 1972. Most growers supported the pull off the deal. “You really showed us plan, although some were unhappy something” one said to Bloomquist. about having to pay for something In the end, The transition to a co-op was com- they previously got for free –a beet pleted on June 14, 1973, and – after 74 contract. But Bloomquist countered hope of success years of being headquartered in Den- that a beet contract was never guar- ver or New York City – American Crys- anteed as long as someone else spoke louder than tal had truly found a home in the Red owned the company. River Valley. ■ fear of failure.

10 May/June 2004 / Rural Cooperatives USDA co-op development efforts support commercial farming in Ghana

By John R. Dunn, Director existing cooperatives Co-op Resources Management Division and intervenes with USDA Rural Development Ghanaian institutions that can help sustain the adoption of trade interests of both nations. USDA ince 2000, the western cooperative models over the agencies with active involvement in Cooperatives Program of long haul. CCARD include: Rural Development; USDA Rural CCARD conducts a series of joint Cooperative Research, Education and S Development has been activities that serve the agricultural and Extension Service, Foreign Agricult- working in ural Service; Natural Resources Con- Ghana to build western- servation Service; and the style cooperatives that Agricultural Marketing help Ghanaian farmers Service. Activities conduct- successfully market their ed by CCARD are funded farm products. The vital primarily by the U.S. work in this poor, West Agency for International African nation is carried Development (USAID). out under the banner of The Ghana Cooperative the Consultative Assistance project, managed Committee on by the Cooperatives Agriculture and Rural Program of USDA Rural Development (CCARD). Development, was initially CCARD is a formal, gov- funded under USAID’s ernment-to-government African Trade and relationship between Investment Program USDA and the Ghana (ATRIP), but has since been Ministry of Food and adopted by USAID’s mis- Agriculture (MOFA). sion in Ghana. The ATRIP- The purpose of the funded project covered work Ghana Cooperative pro- both in Senegal (in partner- ject is to extend western ship with the Federation of cooperative models into a Southern Cooperatives) and Ghanaian setting to help in Ghana (in partnership farmers there transition to with OIC International). a more commercial level Current efforts focus exclu- of food production. The sively in Ghana and parallel project operates with a Rural Development’s Pineapples are inspected and packed for the export market at the two-pronged strategy of Nigeria cooperative devel- Farmapine Ghana Ltd. Co-op. Top: Rice is harvested by members of opment project (see Rural direct advisory assistance Dawhenya cooperative, which is helping members sell higher value, Cooperatives, Jan./Feb. 2004 and training which targets milled rice. USDA photos by John Dunn and Tracey Kennedy issue).

Rural Cooperatives / May/June 2004 11 Capacity building at with basic training in business software provided training and advisory assis- Ghana Cooperative College and IT methods essential to contempo- tance. The focus was on structural or The Ghana Cooperative College is rary business operations. The opening operating issues that were constrain- a small institution in Kumasi, the of the center represents a true public- ing the organizations from taking the Ashanti region capital. It is charged private partnership. Partially funded by next necessary step toward business with training managers and directors USAID, with computer donations from success. of Ghana’s cooperative system in basic the National Cooperative Bank, Farmapine Ghana Limited at cooperative principles and business National Rural Telecommunications Nsawam, eastern region is a ‘farmer- skills. This college is extremely lacking Association and the Cooperative owned’ limited liability company in resources and was sliding into Development Foundation, the center is owned by five pineapple cooperative decline, a result of diminishing public managed by volunteers of the U.S societies (with an 80 percent share) and funding and, more significantly, of Peace Corps. two limited liability companies (with a reliance on the teaching of outdated Future activity will include staff 20 percent share) that received its orig- and ineffective top-down models of development, planning, and coopera- inal capitalization through a World cooperative enterprise. Reform and tive course designs, to be done in part- Bank loan. The cooperative’s goal was rejuvenation of the Cooperative nership with the Cooperative Center to build an export- based marketing College became one of the centerpiece at the University of Wisconsin. program for Ghanaian pineapples. projects under CCARD. Farmapine’s major challenges included As a first step, former USDA Cooperatives provide restructuring its finances to replace the Cooperatives Program staff member technical assistance expiring World Bank loan, improving Rosemary Mahoney was contracted to Rural Development’s Cooperatives product handling practices, and resolv- conduct a curriculum review and Program contracted with OIC ing significant schisms within the assessment for the college. This International, a Philadelphia-based membership base. resulted in a series of recommenda- nonprofit organization, to provide the The Cooperative Development pro- tions and strategies for improving the in-country presence for the project, ject coordinator provided formal train- overall conditions of the college. which worked directly with a set of ing to 320 members of the five pineap- In February, one of the centerpiece selected cooperative associations. ple cooperatives to help in the devel- recommendations was implemented Project coordinator Ferdinand opment and implementation of work- with the opening of a new computer- Nyantakyi- Dapaah worked with able business plans, cooperative basic training facility at the college. The cooperative organizations identified as principles and governance, and pineap- new computer lab will provide students “high potential” organizations. He ple crown reduction to meet export requirements. In addition, there is on- going mediation to help the coopera- tive work through these issues and move to a more sustainable footing. Within two years of operation, Farmapine Ghana Ltd. became the second largest exporter of fresh pineapples in Ghana. Dawhenya Irrigation Cooperative Rice Growers Society is an irrigated- rice cooperative composed of about 120 farmers, each farming 1-2 hectares of rice. This cooperative, formed around a Ghanaian government irrigation plan, enabled farmers to produce high-quality rice, but they lacked capacity to mill more than about 10 percent of the members’ production, meaning they had to sell lower value, in-hull rice. The development project worked with the cooperative to establish a more formal business plan that provid- Ghana Co-op College staff members try out computers at a new training center in Kumasi. ed the foundation for the co-op to arrange milling services for all of its

12 May/June 2004 / Rural Cooperatives members’ crop. This basic, value- cassava root to the plants and, eventu- Many challenges remain added improvement produced a prod- ally, to take an ownership position. Business success is never guaranteed uct farmers could sell for nearly twice Some 10,000 small farmers have been for cooperatives, even in the most the value of their unprocessed rice. organized into cooperative units to advanced economies. The vulnerabili- Through the cooperative development support the initial plant of this ties and fragilities present within project, the members have also been nationwide program. The grassroots, economies of developing nations make linked to a large- scale buyer, the cooperative development process Continental Commodity Trading Co. even more daunting. For example, in This company provides inputs for By addressing their spite of its significant gains, the sur- farmers on credit and buys the majori- vival of Dawhenya Irrigation ty of the rice produced by these farm- Cooperative Rice Society Ltd., is very ers, processes and packages it, then problems together, much in doubt. The situation is the markets the rice under the Ghana same for another cooperative targeted Pride brand. in cooperative for assistance, Weiji Irrigation Cooperative Vegetable Growers Cassava-starch project businesses that they Society Ltd. has major potential Significant changes in electric- A major poverty reduction initiative own and in which price policies of the Ghanaian govern- under Ghana President J. A. Kufour ment have jeopardized the viability of involves the creation of a starch-manu- all agribusinesses tied to public irriga- facturing industry to help Ghanaian they actively partic- tion projects. Many other challenges farmers increase income from their will continue to face Ghanaian coop- cassava crop. Cassava, a root crop that ipate, Ghanaian eratives. is a staple of Ghanaian diet, has histor- Other needs include: better trans- ically been subject to considerable loss- farmers are learn- portation systems, more reliable utili- es. President Kufour’s program is ties and communications systems, bet- intended to build 10 cassava-starch ing the power of ter post-harvest handling practices, production plants over a five-year peri- adoption of meaningful grades and od. They will sell commercial-grade standards and modern processing and starch, primarily to European markets. cooperation. packaging capacities. These are just The first of these plants, the Ayensu some of the needs against which Starch Company (ASCo), established democratic structures established for Ghanaian farmers must struggle to at Bawjiase in the central region, was these co-ops have facilitated produc- realize a degree of the success of their formally commissioned by President tion planning, input supply and tech- counterparts in the developed world. Kufour on Feb. 24. nical assistance. Additionally, two new Yet by addressing their problems The cooperative development pro- farmer cooperatives are being orga- together, in cooperative businesses that ject is working with the Ghanaian nized for two new cassava-processing they own and in which they actively Ministry of Trade and Industry to plants for Eastern and Ashanti regions participate, Ghanaian farmers are develop farmer cooperatives to supply this year. learning the power of cooperation. ■

Why help Ghana’s cooperatives?

Often, when hearing of USDA’s efforts to help nesses in developing nations will also facilitate trade cooperatives in developing nations, people ask between those cooperatives and U.S. trading partners. “why?” This is understandable. The answer is based Activities of this sort — which improve the eco- on both pragmatism — it helps us — and a humani- nomic and social conditions in developing nations — tarian philosophy of helping others learn to support build permanent reservoirs of goodwill toward the themselves. United States. The benefits of this can be far reaching. Successful cooperatives will generate income for Finally, participatory democracy is a fundamental farmers and directly contribute to economic growth. principle of the cooperative form of business. In a time Increased income will, eventually, lead to increased of challenge such as this, what better “product” can demand for U.S. products. Stronger cooperative busi- the United States export than democracy? ■

Rural Cooperatives / May/June 2004 13 Election and voting policies of agricultural cooperatives

By Bruce J. Reynolds, Economist Table 1: Size of board of directors for 437 respondent cooperatives in USDA Rural Development/RBS 2003, expressed as a percent of membership size intervals and in total. [email protected] Number of directors on respondent boards Editor’s note: This article is the second in a Members 5 7 9 : 6&8 >9 : Cooperatives three-part series on selecting and compen- sating directors. The first article discussed <800 13% 52% 19% : 6% 10% : 144 methods cooperatives use to select and nominate board candidates (see page 21 800-1,499 10% 35% 23% : 10% 22% : 107 of the November-December 2003 issue, 1,500-2,999 8% 26% 25% : 6% 35% : 106 on line at: www.rurdev.usda.gov/rbs/pub/ openmag.htm.). This second article exam- >3,000 9% 17% 20% : 15% 39% : 80 ines election and member voting policies. Total 11% 35% 22% : 8% 24% : 437 he critical trade-off in cooperative voting poli- Many of these policies have various on whether larger producers should cies is the need to estab- kinds of interrelations. For example, in have more votes than provided by a T lish sufficient voice for the first policy issue, the number of one member-one vote policy. This members in electing their board seats is influenced by the size of point was raised in an article about directors, while at the same time pro- the membership. As another example, preparing for the future in the Nov- viding for a certain amount of board cooperatives with the longest director Dec 2003 Rural Cooperatives. A ques- independence from disruptive member terms more often apply limits on the tion for research is whether voting pressures. Election and voting policies number of times a director can be re- method influences a tendency for are designed to choose directors who elected. In addition, the much-debated either relatively large or small farmers will exercise leadership in reconciling issue of member voting power centers to serve on cooperative boards of member interests and prioritizing goals directors. To help answer this question, that will yield the most long-term ben- data were collected on the farm size of efits for membership as a whole. Election and voting directors in relation to the member- Survey results of election and voting ship as a whole. policies show different ways that coop- policies are designed eratives have sought to establish lead- Board size ership that both represents members Table 1 reports the number of and achieves business success. The fol- to choose directors who director seats on cooperative boards, lowing six policies influence this bal- sorted by different membership size ance: will exercise leader- intervals. Seven-member boards are • board size in relation to the most popular board size, with nine membership; ship in reconciling and five-member boards being the next • term lengths; most popular sizes. Only in the largest • term limits; member interests and membership size interval, 3,000 and • competitive elections; above, are nine directors the most fre- • outside directors; quent board size (occurring in 16 out • member voting power. prioritizing goals… of 80 cooperatives).

14 May/June 2004 / Rural Cooperatives As membership size increases, so that at the time these cooperatives only practical, since the incumbents does the frequency of boards with organized there, the state incorpora- have to run for election so frequently. more than nine directors (see column tion statute may have specified that Three of the seven respondents having >9, table 1). For boards that exceed particular term length. a seven-year term prohibit directors nine directors, no particular board size from running for a second term, but predominates, being widely dispersed Term limits the other four have no term limits. in the range from 10 to 51 directors. Limits on the number of consecutive Of the 154 cooperatives reporting But the fact that nine directors is the times directors can serve (term limits) the use of term limits, 149 also report- median for co-ops with 1,500 or more are used by 154 cooperatives (35 per- ed the maximum number of consecu- members shows that large organiza- cent), while 281 (65 percent) have no tive terms directors may serve. Four of tions also tend to restrain the size of limits on consecutive terms (based on these respondents prohibit election to their boards. 435 responses). Term limits are now consecutive board terms, i.e., a one- term limit. Table 4 reports the number of respondents with term limits. In Table 2: Size of board of directors for 437 co-ops surveyed in 2003, each of six instances where co-ops limit expressed as a percent of co-ops without districts and with districts. directors to five or six consecutive terms, the term length is three years. Number of directors on the boards Many cooperatives allow members who Cooperatives 5 7 9 : 6&8 >9 have reached the limit on consecutive terms to run again after they have been Without districts 17% 48% 22% : 5% 8% off the board for one term. With districts 7% 29% 22% : 10% 32% Competitive elections Total 11% 35% 22% : 8% 24% Many democratic organizations, including some cooperatives, have nominating committees that follow the Table 2 reports the data for survey respondents that have only at-large directors (no districts), and for those Table 3: Length in years of an elected term on the board, reported by 434 with districts. There were 145 respon- cooperatives, 2003. dents without districts and 292 with districts. The latter generally have Term length (years) 1 2 3 4 5 6 7 larger boards, with a much higher per- Number of cooperatives 19 12 382 9 4 1 7 cent having more than nine directors, while 48 percent of cooperatives with- out districts have a board size of 7 directors. Another distinction, though Table 4: Single term and consecutive terms that members may serve on not reported in Table 2, is cooperatives with membership districts where mem- the board, reported by 149 cooperatives with term limits, 2003. bers, or delegates, elect only the direc- Number of terms 1 2 3 4 5 6 tor for their district (and perhaps one or two at-large directors), vs. those Number of cooperatives 4 17 90 32 5 1 where directors are elected by district, but all members get to vote for all directors, regardless of which district more frequent than in the past, as indi- recommendations of Robert’s Rules of they live in. cated by comparison with the 1949 sur- Order in submitting only one candi- vey.1 In that survey, 76 cooperatives date for each board vacancy.2 However, Term lengths (8 percent) had term limits, while 827 cooperatives have traditionally been Length of board terms varied cooperatives (92 percent) let incum- advised to run more than one candi- between one to seven years, with three bents run for election to board seats for date per seat, usually by encouraging years being the overwhelmingly popu- an unlimited number of terms. open and flexible processes for nomi- lar choice. The survey results for this Furthermore, out of 31 respondents nating candidates.3 About one-third question are reported in table 3. The with term lengths of one or two years (148) of respondent cooperatives seven cooperatives with seven-year (those in the first two columns of table require that at least two candidates run terms are all in Tennessee, suggesting 3), none have term limits. This seems for each board seat.

Rural Cooperatives / May/June 2004 15 There is no practical reason for Outside directors nominating committees to limit their One of the traditional requirements selection and nomination to one candi- An equally impor- for directors is that they are members date per seat. Robert’s Rules have for of the cooperative. Various objectives more than a century been a useful pro- tant trade-off is to can be accomplished by requiring cedural guide, but their applications cooperative boards to exclusively con- ought to be flexible. The rules have have a board that sist of members, with member control influenced some organizations to adopt being especially important. Members governance policies that might be can pursue indepen- can also establish control when a impractical for many applied situa- minority of non-members may serve on tions, as noted by one scholar.4 a board, so long as member directors One survey respondent from a dent deliberation, can exercise a majority under all voting cooperative without an opposing can- and decision rules where more than a didate requirement commented that it and not simply simple majority might be required. still always has two candidates run for In this survey, 18 cooperatives board seats. Ten other respondents deliver mandates reported having outside, or non-mem- commented that, although not ber, directors with the power to vote required, they still make extra efforts from their support- on decisions. Two of the 18 coopera- to recruit second candidates, but do tives define their outside board mem- not always succeed. bers as “public directors,” while 16 Several respondents commented ers or districts. cooperatives select outsiders to serve that two opposing candidates are from the general community of busi- preferable, but finding members to run of having at least two opposing candi- ness leaders and professionals. Four of for the board is difficult. Another dates because “members got tired of the 16 had more than one seat on respondent mentioned that the coop- getting beat” when running against their boards designated for outside erative recently terminated the policy incumbents. directors.

Photo by Richard G. Biever, courtesy Indiana Statewide Association of RECs.

16 May/June 2004 / Rural Cooperatives Some respondents commented that operators by size held 37% of the the importance of election and voting their bylaws permit outside directors, board seats in 27 proportional voting policies that support the development but that they did not exercise that cooperatives, in contrast to 26% in the of strong team-building on the board. authority. Others said they were study- 352 one member-one vote coopera- Yet, brought to an extreme, a cohesive ing the use of outside directors. In sur- tives. Still, most one member-one vote team can be complacent and unrecep- veys completed by co-op managers, cooperatives also prefer to elect direc- tive to new ideas that challenge the sta- several wrote that having one seat on tors from among the relatively largest tus quo. the board designated for a non-mem- farmers in their membership. About Election and voting policies used ber with special business or profession- 63% of one member-one vote cooper- most frequently are not necessarily the al experience would be very helpful to atives elect directors who are among best. That evaluation has to be made management. the largest half of farm operating size in the context of each individual orga- in the membership. nization. When members are involved Farm size and voting method Does a policy of one member-one vote result in disproportionate influ- Table 5: Percent of directors in farm size quartiles of the membership for ence by relatively small farmers? This cooperatives with proportional voting and with one vote per member. question can only be answered on a case-by-case basis, but the composition Proportional voting One member-one vote of boards in terms of relative farm size (27 co-ops) (352 co-ops) is worth a look. The survey results show the extent to which boards are Percent Percent 1st quartile 9 12 made up of the largest farmers in a 2nd quartile 17 25 cooperative’s membership. There are 3rd quartile 37 37 no presumed advantages or disadvan- 4th quartile 37 26 tages of directors having either large or 100% 100% small farms. Of course, the critical dis- tinction is differences in patronage vol- Smallest half 26 37 Largest half 74 63 ume, and farm size is only an approxi- 100% 100% mation. But above all, electing the best directors possible is the key task. The issue of member voting power with designing or revising their poli- is often debated under the assumption Policy by design cies, a fresh and creative approach can that the one member-one vote proce- Designing policies for board elec- make the difference between the mere- dure results in boards with under-rep- tions and member voting can be a sim- ly functional and the achievement of resentation for large farm operators ple matter of adopting commonly excellence in the governance of coop- (large volume patrons). Some argue reported practices or implementing the eratives. that proportional voting corrects such recommendations from manuals such imbalance, and feel that this method is as Robert’s Rules. It can also be more used too infrequently. Out of the 379 demanding when members take it upon 1 Nelda Griffen, H. N. Weigandt and K. B. survey responses on the relative farm themselves to design a system that Gardner, Selecting and Electing Directors of size of directors, only 27 have propor- reflects their values and, more specifi- Farmers’ Cooperatives. USDA/Farmer tional voting. cally, try to balance attributes that Cooperative Service, General Report #14, Table 5 reports the percent of direc- while creating some friction, can 1955. tors in the four quartiles (the smallest induce more pressures for superior 2 Henry M. Robert III, et al, Robert’s Rules of 25% of members are in the 1st quar- leadership. Election and voting policies Order. 10th edition, 2000, (1st edition, 1876) p. tile). The percent of directors in the usually try to offer members good 419. largest and smallest halves for coopera- choices and enough influence from vot- 3 tives with proportional voting and for ing so that elected directors will repre- Helim H. Hulbert, David Volkin, and Nelda those with one member-one vote are sent their interests. But an equally Griffen, Bylaw Provisions for Selecting Directors also reported in table 5. Even though important trade-off is to have a board of Major Regional Farmer Cooperatives. the size of the two comparative groups that can pursue independent delibera- USDA/Farmer Cooperative Service, General is lopsided, it shows that proportional tion, and not simply deliver mandates Report # 78, 1960, p. 12-13. voting resulted in more of the larger from their supporters or districts. 4 Russell Hardin, Liberalism, Constitutionalism, producers being elected to boards of Another trade-off, discussed in the and Democracy. Oxford University Press, 1999, directors. The 4th quartile of farm article on selecting candidates, involves p. 110.

Rural Cooperatives / May/June 2004 17 Sharing the umbrella State co-op councils broaden base to serve consolidating co-op sectors

By Pamela J. Karg agement plan for the rural electric worked together in other organizations association to reorganize and restruc- to form an Upper Midwest power- Editor’s note: Karg is a freelance journalist ture, initially to ward off any fall-out house of cooperative activities. based in Baraboo, Wis., with more than 20 from deregulation, Nilsestuen says. So it came as no surprise when years experience writing about cooperatives. The management plan turned into a WFC and the Minnesota Association coalition. That, in turn, led to a consol- of Cooperatives (MAC) announced an t started as a way to tack- idation of office space and, eventually, a alliance in 1999. Nilsestuen says the le issues swirling around merger of staff. history of working together helped the deregulation of the elec- Unbeknownst at the time, this join- two state councils grow together, I tric industry. But the ing of the state co-op farm and the develop a cooperative research consor- effort led to a merger electric councils was the forerunner of tium and establish the Cooperative that has since become the organiza- similar moves made by a number of Development Service. MAC, in partic- tional norm, rather than the exception, cooperative councils in other states, ular, had been struggling in a number for the nation’s state cooperative coun- which are broadening their member- of areas, and it was felt it could be cils. As individual members and coop- ship to include farm and non-farm strengthened through the union with eratives change, America’s state coop- cooperatives. Wisconsin. erative councils have had to change When the separate boards approved along with them to survive. A changing rural landscape the alliance, each organization kept its The trendsetter for broader-based Cooperative service and trade asso- separate identity, yet gained the single co-op councils was Wisconsin in the ciations, including state councils, have membership benefits from shared pro- late 1980s. Rod Nilsestuen, now the been at the vortex of a changing rural grams that increase program efficiency state’s secretary of agriculture, then landscape. In agriculture, for example, and effectiveness. The alliance is prov- headed the Wisconsin Federation of there are fewer, larger farming opera- ing successful by coordinating educa- Cooperatives (WFC), which had a pri- tions. In turn, there are fewer, yet larg- tion, dairy and communications pro- marily farm co-op membership base. er farmer-owned cooperatives. Smaller grams, as well as certain administrative The Wisconsin Rural Electric co-op organizations are consolidating functions, he observes. Each state con- Cooperative Association (WRECA) sat to better serve larger farming opera- tinues to operate its own legislative down to talk with WFC about working tions. affairs office. together to educate legislators and oth- Fewer cooperatives means fewer “It proved to be a mechanism for ers about electrical deregulation issues. dues-paying members in state co-op members to do things together that At that time, Wisconsin and California councils. Simultaneously, technological they just couldn’t do separately,” were in a dead-heat to be the first to advances are making it possible for Nilsestuen says. deregulate. Each had proponents who people to communicate from opposite wanted to win that race. sides of a state, the nation or even the Volunteers are essential “We knew each other,” Nilsestuen world just as though they were in the “What keeps these organizations explains of the relationship between same room. going is the volunteer help they get,” Wisconsin’s farm and electric co-op Amid the multi-faceted business says James R. Barnett, past president associations. “Many rural electrics changes, Wisconsin and Minnesota of the Mid-Atlantic Alliance of were members of WFC. We had cross- farmers began talking about how their Cooperatives (MAAC). “As individual over membership where, for example, state co-op councils could better serve cooperatives merge and look at their a dairy farmer representative to WFC them. As a center of America’s dairy budgets, they try to reduce their costs might also be a rural electric represen- industry, milk producers from both and decide to pay for only one mem- tative to the state electric association.” states had been working together bership where, prior to merger, they The net result of the meeting of the through cooperatives for much of the would have had to pay for at least two two organizations was an interim man- past century. The two states also had memberships. With fewer and fewer

18 May/June 2004 / Rural Cooperatives employees and members, you have goals. The directors decided to take speak up at meetings to make them- less people to carry out programs. the strengths of the founding councils selves heard.” The people you do have, have less — including youth programs, young time to commit to helping put on cooperator workshops and director Gaining political power programs.” training sessions — and parlay them through co-op unity Something had to give before all into the common ground on which to Back in Wisconsin, the WFC-MAC was lost in the region. So the leaders build MAAC. Alliance headed to the statehouse from 24 Pennsylvania- and Maryland- “We had been using the National rather than concentrating on the based cooperatives formed a joint Institute on Cooperative Education schoolhouse. While communication organization. They recognized they (NICE) as a carrot — an incentive — and education are important, the real would individually gain strength by to get youth to our programs,” Barnett value comes from its political know- combining efforts to meet their spe- explains. “When they participated, we how and perseverance. cialized needs and interests. had a process to select several youths “We are very ‘retail’ oriented,” says “It’s not always easy,” admits to attend NICE. With the reorganiza- Bill Oemichen, president and CEO of the WFC-MAC Alliance. He and the Alliance were seemingly made for each other. Oemichen formerly served as deputy com- missioner of the Minnesota Agriculture Department and then as Wisconsin’s top con- sumer protection official at the Wisconsin “Our members and leadership put forward ideas they want us to “What keeps these organizations going Department of enact to make the business environment easier for cooperatives is the volunteer help they get,” says Agriculture, Trade and to operate in,” says Bill Oemichen, president of the MFC-MAC James Barnett past president of the Consumer Protection — Alliance. Photo by Pamela J. Karg Mid-Atlantic Alliance of Cooperatives. the agency Nilsestuen now heads. The attorney Barnett. “People with both organiza- tion of NICE [now held strictly as a stepped into his Alliance leadership tions — some for 30 years — ask, youth co-op education conference], we role in 2002. That ‘retail’ orientation ‘How can you let this go away? I looked at the programming, found means the Alliance continually listens helped build this up — how can I let it ways to keep our youth involved in the to its members to determine what they go?’” new NICE program and we have some expect of their trade association. According to the MAAC leader, success stories.” “What a lot of cooperatives are cooperatives face many challenges: the Even though MAAC found fewer telling us is that we need to function as need to increase profitably and com- youth with cooperative experience, it their trade association, representing petitiveness; managing change; the decided to target groups for specialized their legislative interests to the gover- need to expand membership; hiring, cooperative training. For example, 75 nor, legislatures, state and federal training and retaining employees. percent of last year’s state FFA officers administrations and agencies and to Through MAAC, the member cooper- participated in a MAAC program. Congress,” Oemichen says. “Our atives are creating services that will Meanwhile, the director-training members and leadership put forward help them deal with a host of priorities workshops become more sophisticated ideas that they want us to enact to in today’s business world. The organi- because, as farms and cooperatives make the business environment easier zation’s primary thrusts are education, grow, so do oversight issues. for cooperatives to operate.” networking, encouraging appreciation “When you make a decision any While many cooperatives are get- for co-ops and strengthening commu- more, it’s not just a million-dollar ting larger, it creates niches for small- nities through cooperatives. question, but a $5 million or a $500 er cooperatives to serve other mem- Pennsylvania and Maryland state million question,” Barnett says. “So we bers’ needs. The Alliance strives to council directors initially served on the need to make sure our programs give put forward legislation that helps new MAAC board. They fed the new directors a better understanding of cooperatives regardless of size, ser- organization hundreds of ideas of what financing, how to ask the right ques- vices, sector and other distinguishing programming to maintain to meet its tions of general managers and how to features. Bringing together nearly 800

Rural Cooperatives / May/June 2004 19 separate cooperatives — some of them impact its business operations and its to move ahead of the customer, avoid competitors in the marketplace or the members in the seven different states commodity pitfalls, demonstrate countryside — is often a struggle, where we have a presence,” Brooks strategic agility and form partnerships Oemichen admits. says. “The Alliance has people who can with other cooperatives and with the With its Scandinavian background, follow all those issues. They know how private sector. Minnesotans are more government they all work together and they have If a cooperative is only as effective activists. They’re very involved in people who are respected in state capi- and profitable as its individual members, developing new agricultural coopera- tals who can communicate our points how do the changes taking place across tives. By contrast, Wisconsin’s of view.” rural America then impact the organiza- German Lutheran and Catholic back- The Alliance backs up legislative tions that serve the cooperatives? ground gives it a more conservative positions presented by staff with its Examine what individual members are flavor. members’ CEOs and directors, making doing and figure out where the organi- “But we’re learning from each legislative contacts and testifying zation needs to head, advises Bruce other, blending different attitudes and before committees. These local coop- Anderson, professor of business man- engaging in healthy discussions that erative leaders such as Brooks are on agement and marketing in the College are leading us to make more innova- the frontline, living within current leg- of Agriculture and Life Sciences at tions,” he says. islation and ably equipped to provide Cornell University, Ithaca, N.Y. “Yet it’s efficient, because first-hand explanations for making new Anderson also serves as an advisor to the Wisconsin and Minnesota coopera- laws, Oemichen says. Northeast Cooperative Council tives face similar challenges and they Brooks sees other advantages to (NECC), which focuses on co-op edu- realize the alliance can bring political working together through the Alliance. cation issues, and as a director of a pur- power to the lobbying process. In our For example, when Wisconsin cooper- chasing cooperative owned by Cornell diversity, we’re finding our power,” atives pushed to develop rural group sororities and fraternities. Strategic Oemichen says. “But our real power is health cooperatives, it could examine planning is one of Anderson’s specialties. that unity, because we come together and build on Minnesota’s experience. When farm numbers decreased in as cooperatives to talk to political Or, when Minnesota cooperative lead- New England, so did the number of leaders. That’s 2.9 million ers across sectors wanted to delve into cooperatives. Like other regions, the Wisconsinites and 3.4 million some type of dairy investment tax surviving farms and cooperatives were Minnesotans. That’s 20 percent of all credit program, they could pull out the larger. NECC responded by expanding the members involved in the 48,000 best parts of a Wisconsin plan. its membership area to include all cooperatives across the United States. “I think working together through Northeastern states’ agricultural co-op That’s pretty powerful.” the Alliance has made us wiser and councils, extending to the New York- allowed us to feed off of each other’s Pennsylvania border. Legislative focus benefits all experiences so that we’re all stronger “I think we realized that our inter- Dairy producer Edward Brooks also in the long run,” Brooks says. ests are so diverse that we couldn’t get sees great value in regional co-op orga- consumer cooperatives or credit unions nizations. Brooks, who milks 50 Brown Follow the member trail involved with agricultural coopera- Swiss cows, serves as board chairman Recently, Chuck Cruickshank tives,” Anderson says. “It could happen of the Foremost Farms USA dairy addressed Mid-Atlantic members in the future,” he speculates. “If the cooperative, headquartered in Baraboo, attending their first-ever annual meet- financial pain ever gets high enough, Wis., and as chairman of WFC, with ing. The director of procurement and people do come together in the same offices in Madison, Wis. (The MAC member services for the Mid-Atlantic room and start to think about working half of the Alliance is housed in St. region of Land O’Lakes, Cruickshank together. But, right now, things look Paul, Minn., and it is chaired by Curt talked about profitability, staying pretty good.” Eischens of CHS Cooperative.) competitive, keeping current and There’s no doubt in his mind that Foremost ranks as the 26th largest meeting price expectations. Yet, he more consolidations will come — cooperative in America, according to cited survey results where 44 percent whether across sectors, within indus- the National Cooperative Business of respondents worried whether their tries or among state councils — as the Association. But even large co-ops like co-op would be able to compete in cooperative movement goes forward. Foremost rely on trade associations the future. Whether they fill education voids or such as the WFC-MAC Alliance, With challenges of government form a political front, Anderson says Brooks says. regulation, dwindling numbers, pres- all cooperatives will still need to work “I don’t think Foremost would have sures to consolidate and a volatile together through some type of trade enough resources to cover all the dif- economy, Cruickshank said that if association to tackle issues unique to ferent legislative issues that could cooperatives are to survive, they have their business structure. ■

20 May/June 2004 / Rural Cooperatives State or regional cooperative associations

CALIFORNIA 1701 Towanda Avenue MID-ATLANTIC Agricultural Council of California Bloomington, IL 61701 (Serving Maryland, Pennsylvania, Donald G. Gordon, Jr., President Telephone: (309) 557-3109 Delaware and New Jersey) 1225 H Street FAX: (309) 557-3729 Mid-Atlantic Alliance of Cooperatives Sacramento, CA 95814-1910 E-Mail Address: [email protected] Patricia E. Heuser, Executive Director Telephone: (916) 443-4887 526 Brittany Drive FAX: (916) 443-0601 IOWA State College, PA 16803 E-Mail Address: [email protected] Iowa Institute for Cooperatives Telephone: (814) 238-2401 Home Page: www.agcouncil.org David Holm, Executive Director FAX: (814) 238-7051 2515 Elwood Drive, Suite 104 E-Mail Address: COLORADO Ames, IA 50010-8263 [email protected] Colorado Cooperative Council, Inc. Telephone: (515) 292-2667 Home Page: Doyle Smith, Consultant FAX: (515) 292-1672 maacooperatives.org P.O. Box 506, E-Mail Address: Eaton, CO 80615 [email protected] MID-AMERICA Telephone: (970) 454-4054 Home Page: www.iacoops.org COOPERATIVE COUNCIL FAX: (970) 454-4082 (Serving Illinois, Indiana, Michigan and E-Mail Address: KANSAS Ohio, some of which still maintain state [email protected] Kansas Cooperative Council councils for some functions) (Vacant), Executive Vice President Martin Hall, Executive Director FLORIDA 816 SW Tyler, Suite 300 P.O. Box 223 Florida Council of Cooperatives Topeka, KS 66612-1635 Caledonia, MI 49316 Perry Hansen, President Telephone: (785) 233-4085 Telephone: (616) 891-5547 P.O. Box 287 FAX: (785) 233-1038 FAX: (616) 891-5598 Waverly, FL 33877 E-Mail Address: E-Mail Address: Telephone: (813) 439-3602 [email protected] [email protected] FAX: (813) 439-2639 Home Page: www.kansasco-op.coop/ Home Page: www.macc.coop

GEORGIA KENTUCKY MINNESOTA Georgia Cooperative Council, Inc. Kentucky Council of Cooperatives Minnesota Association of Cooperatives Dick Schermerhorn, Executive Director Dr. Lionel Williamson, Amy Fredregill, Managing Director P.O. Box 447 State Coordinator APES Blair Arcade West, Suite Y Bethlehem, GA 30620 306 Charles E. Barnhart Building 400 Selby Avenue Telephone: (706) 542-0768 University of Kentucky St. Paul, MN 55102 FAX: (706) 542-0851 Lexington, KY 40546-0276 Telephone: (651) 228-0213 E-Mail Address: Telephone: (859) 257-1637 FAX: (651) 228-1184 [email protected] FAX: (859) 323-1913 E-mail Address: Home Page: E-Mail Address: [email protected] [email protected] www.agecon.uga.edu/~gacoops/ Home Page: www.uky.edu/Ag/ Home Page: www.wfcmac.coop AgEcon/apes_2002prog.html IDAHO MISSISSIPPI Idaho Cooperative Council, Inc. LOUISIANA Mississippi Council of Cooperatives Rick C. Waitley, Executive Director Louisiana Council of Farmer Harry Dendy, Secretary/Treasurer 55 SW 5th Avenue, Suite 100 Cooperatives P.O. Box 122 Meridian, ID 83642-3030 Lenny Waguespack, Secretary Clinton, MS Telephone: (208) 888-0988 P.O. Box 67 Telephone: (601) 925-5423 FAX: (208) 888-4586 St. James, LA 70086 E-Mail Address: [email protected] Telephone: (225) 265-4056 FAX: (225) 265-4060 ILLINOIS E-Mail Address: Illinois Cooperative Coordinating [email protected] Committee Jim Fraley, Secretary

Rural Cooperatives / May/June 2004 21 MISSOURI OKLAHOMA TEXAS Missouri Institute of Cooperatives Oklahoma Agricultural Texas Agricultural Kristi Livingston, Cooperative Council Cooperative Council Education Coordinator Mike Frickenschmidt, Tommy Engleke, Executive University of Missouri Executive Director Vice President 125C Mumford Hall P.O. Box 251 6210 Highway 290 East, Suite 300 Columbia, MO 65211-6200 Enid, OK 73702 Austin, TX 78723 Telephone: (573) 882-0140 Telephone: (580) 233-2115 Telephone: (512) 450-0555 FAX: (573) 882-3958 FAX: (580) 242-1030 FAX: (512) 450-0655 E-Mail Address: E-Mail Adress: [email protected] E-Mail Address: [email protected] [email protected] Home Page: www.okagcoop.org Home Page: www.texas.coop

MONTANA OREGON UTAH Montana Council of Cooperatives Agricultural Cooperative Council of Utah Council of Farmer Cooperatives Walter Coffman, Executive Secretary Oregon Christopher Falco, General Manager 2250 8th Lane NE John H. McCulley, Executive 8700 South 700 West Dutton, MT 59433 Secretary Sandy, UT 84070 Telephone: (406) 753-2296 P.O. Box 2042 Telephone: (801) 255-4228 FAX: (406) 753-2296 Salem, OR 97308-2042 FAX: (801) 255-4678 E-Mail Address: [email protected] Telephone: (503) 370-7019 FAX: (503) 587-8063 VIRGINIA NEBRASKA E-Mail Address: [email protected] Virginia Council of Farmer Nebraska Cooperative Council Cooperatives, Inc. Robert C. Anderson, President SOUTH CAROLINA Hugh Harris, Executive Secretary 134 South 13th Street, Suite 503 South Carolina Cooperative Council P.O. Box 25202 Lincoln, NE 68508-1901 Marie Stiles, CMP, Executive Director Richmond, VA 23260-5202 Telephone: (402) 475-6555 151 Rocky Ridge Road Telephone: (804) 281-1452 FAX: (402) 475-4538 Leesville, SC 29070 FAX: (804) 281-1141 E-Mail Address: [email protected] Telephone: (803) 463-9706 E-Mail Adress: Home Page: www.nebr.coop FAX: (803) 604-9141 [email protected] E-Mail Address: [email protected] Home Page: www.vcfc.net NORTH CAROLINA Cooperative Council of SOUTH DAKOTA WASHINGTON North Carolina South Dakota Association of Washington State Council of Farmer Carlyle Teague, President Cooperatives Cooperatives P.O. Box 10426 Brenda Forman, Executive Secretary Dan Coyne, Executive Director Raleigh, NC 27605 222 East Capitol Avenue, Suite 1 9103 Chestnut Hill Lane, SE Telephone: (919) 834-5544 Pierre, SD 57501 Olympia, WA 98513 FAX: (919) 828-9322 Telephone: (605) 945-2548 Telephone: (360) 786-8180 E-Mail Address: [email protected] FAX: (605) 945-2269 FAX: (360) 438-9170 E-Mail Address: [email protected] E-Mail Address: [email protected] NORTHEAST Home Page: www.sdvalueadded.coop Home Page: www.wscfc.org Northeast Cooperative Council Dept. of Applied Economics TENNESSEE WISCONSIN & Management Tennessee Council of Cooperatives Wisconsin Federation of Cooperatives Brian Henehan, Hubert King, General Maganer Bill Oemichen, President and CEO Senior Extension Assistant P.O. Box 272 131 West Wilson Street, Suite 400 Room 203, Warren Hall McMinnville, TN 37110 Madison, WI 53703-3269 Cornell University Telephone: (931) 473-3116 Telephone: (608) 258-4400 Ithaca, NY 14853-7801 FAX: (931) 473-4939 FAX: (608) 258-4407 Telephone: (607) 255-8800 E-Mail Address: FAX: (607) 255-9984 [email protected] E-Mail Address: [email protected] Home Page: www.wfcmac.coop ■ Home Page: www.cooperative.aemcornell.edu

22 May/June 2004 / Rural Cooperatives CoBank keeps pace with co-ops’ changing needs

en years ago, none of the value-added farmer-owned coopera- (FCL) from 82 percent to 100 per- 2,500 U.S. cooperatives tives in certain situations,” Sims says. cent. As a wholly owned subsidiary, T and other rural business- “This legislation will continue to allow FCL strengthens the bank’s ability to es that make up the flow of capital to rural America. deliver on its value proposition of CoBank’s membership Access to capital is key to any growing bringing market-competitive leasing connected electronically with the and changing business. CoBank must services to rural America. To reach Denver-based bank. have the same ability to adapt as its such a wide market, FCL will partner Today, nearly 1,000 of CoBank’s customers if the bank is going to suc- with Farm Credit associations to customers manage their loan accounts ceed in today’s business environment.” ensure that the leasing needs of their and company funds through the bank’s In an increasingly competitive envi- customers are met. online delivery platform, CoLink®, ronment that has produced fewer, but In a post-Enron age shaped by the with a growing number of them using larger, cooperatives, building CoBank’s Sarbanes-Oxley Act, CoBank has fur- a more robust line of cash-manage- financial capacity remains an ongoing thered its long-standing commitment to ment services: CoBank Cash Manager. priority. In November 2003, CoBank good governance and transparent dis- Online banking and cash manage- strengthened its capital position by closure practices. A special restructuring ment is just one way CoBank has committee of the bank’s board of direc- responded to its customers’ changing tors is developing recommendations to business needs in recent years. Faced enhance CoBank’s governance. One with increasing consumer demands, result is likely to be a reduction in size along with pressing regulatory, politi- of CoBank’s board, which now numbers cal, environmental and trade policy 26 directors. The committee is also issues, CoBank’s customers have considering the need for additional out- required greater resources and capabil- issuing $200 million in perpetual pre- side or independent directors, and for ities to compete in the marketplace. As ferred stock under favorable market increased attention to the qualifications a major provider of financial products conditions. This outside infusion of of future board candidates. and services to rural America, CoBank capital — CoBank’s second in three For the past five years, CoBank has actively focused on anticipating its years — further positions the bank to shareholders have received an average customers’ changing needs and deliver- meet the growing needs of its cus- of $125 million per year in cash ing the competitive advantages they tomer-owners. patronage as a result of their invest- require to succeed in their businesses. Building capacity extends beyond ment in the bank. ” “We are continually looking for ways financial transactions, such as preferred “It’s balancing the right combination to deliver more value and adapt to our stock issuance, to business expertise of so many things,” Sims emphasizes. customers’ needs and to the market- and people. To help the bank continue “It’s serving your customers’ needs bet- place,” says Douglas D. Sims, CoBank’s to fulfill all aspects of its mission of ter than anyone else, employing pru- CEO. “Adaptability has been key to our serving U.S. agriculture and rural dent risk management practices, con- customers’ success and to CoBank’s.” America, CoBank has established com- trolling expenses, improving business For example, CoBank, a federally plementary strategic partnerships and processes, strengthening your financial chartered bank in the Farm Credit alliances that broaden CoBank’s access capacity, and maintaining the right System (FCS), is part of a broad coali- to capital, products and services. Some strategic partnerships.” tion of cooperatives and agricultural of these partners are Farm Credit With $31 billion in assets and $2.8 associations that support legislation to System banks and associations; others billion in capital, CoBank has built a allow CoBank to finance a new genera- are well-known commercial banks or strong cooperative bank for rural tion of farmer-owned cooperatives. international correspondent banks America. But as CoBank’s CEO notes, Increasingly, CoBank’s cooperative cus- around the globe. This network helps “The job is never done.” tomers are adjusting their corporate CoBank bring billions of dollars in Contact information: structures so they can access new loan capital to CoBank’s customers, website: www.cobank.com, phone sources of nonmember equity capital. deliver cash management services to 1-800-547-8072; address: 5500 S. Some of these new structures create eli- rural America, and finance $200 mil- Quebec St., Greenwood Village, Colo. gibility issues for organizations which lion in ag exports sales monthly. 80111. CEO: Douglas D. Sims; want to do business with CoBank. In addition, in early 2004, CoBank President and COO: Robert B. Engel; “We believe these new cooperative increased its ownership stake in Farm Board Chairman: J. Roy Orton, structures can be especially useful for Credit Leasing Services Corporation President, Orton Farms, Ripley, N.Y. ■

Rural Cooperatives / May/June 2004 23 NCFC champions issues crucial to ag co-ops

ince 1929, the National Council of Farmer Cooperatives (NCFC) S has been the national association representing America’s farmer cooperatives. There are nearly 3,000 farmer cooperatives across the United States whose mem- bership includes a majority of our nation’s more than 2 million farmers. NCFC ensures that farmer cooper- atives have a strong and effective voice in addressing public policy Agriculture Secretary Ann Veneman addresses an NCFC meeting in Washington. NCFC’s pri- issues at the national level. It synthe- mary mission is to make sure farmer co-ops have a strong voice at the national level on pub- sizes a wealth of information to keep lic policy issues. USDA Photo by Dan Campbell members current on antitrust and tax legislation and other legal issues, as Recent issues on which NCFC has new generation cooperatives will well as agriculture, trade, energy, taken a lead role include: continue to have access to a com- transportation and environmental pol- petitive source of credit from icy. It also tracks and analyzes eco- • Access to equity capital — As CoBank. nomic trends. farmer cooperatives must compete • Strengthening USDA programs A member-led committee system in a rapidly changing marketplace, for cooperatives — NCFC was forms the basis for NCFC’s policy one of the greatest challenges faced instrumental in ensuring that farmer direction. Among these committees by farmer cooperatives is access to cooperatives have the ability to par- are: The Legal, Tax and Accounting the equity capital necessary to mod- ticipate in USDA programs, includ- Committee — through its subcommit- ernize, expand and take advantage ing: the commodity purchase pro- tees and task forces, it provides NCFC of new market opportunities. gram, export programs, Value Added with policy guidance in the areas of NCFC strongly supported introduc- Producer Grants, 2002 Farm Bill law, cooperative accounting and tion of legislation in both the House conservation programs and the finance and tax policy. The and the Senate to eliminate the Business and Industry Loan pro- Government and Public Affairs third layer of tax imposed on farmer gram. NCFC continues to work to Committee — identifies the national cooperative dividends paid on capi- ensure sufficient funding for these public policy issues affecting farmer tal stock under the Dividend programs and continued eligibility cooperative businesses and their mem- Allocation Rule. This discriminato- for farmer cooperatives. bers and develops, with NCFC staff, ry tax structure (regular corporate • Interaction with policy makers — strategies for addressing these issues. dividends are taxed only twice) The annual NCFC Washington The Cooperative Education unfairly limits the ability of cooper- Conference brings farmer coopera- Committee — plans the director’s atives to raise equity capital and tive directors, CEOs and senior education conference held in conjunc- reduces patronage paid to a cooper- management to Washington help tion with the NCFC Annual Meeting, ative’s farmer members. further the policy interests of farmer which gives the farmer directors of • Addressing changes to coopera- cooperatives. Attendees meet with NCFC members the opportunity to tive laws — A number of states top policy makers from Congress come together and address issues of have either changed or are planning and the Administration to help put a cooperative governance, board respon- to change their cooperative laws to farmer’s face on cooperatives for sibilities and the changing nature of allow outside investment in farmer these officials. the food and fiber marketplace. cooperatives as a means of raising Contact Information: Web site: NCFC has a proven track record of equity capital. Through its LTA http://www.ncfc.org. Telephone: (202) effectively communicating, through its Committee, NCFC has carefully 626-8700. Facsimile: (202) 737-6430. close working relationships, the inter- monitored these developments, and address: 50 F Street, N.W., Suite 900, ests of its members to Administration is looking at how such changes may Washington, DC 20001. President & officials and members of Congress, affect federal policies and programs. CEO: Jean Marie Peltier; Board including the Congressional Farmer In particular, NCFC has been Chairman: John E. Gherty, President Cooperative Caucus. active in efforts to ensure that these & CEO Land O’ Lakes Inc. ■

24 May/June 2004 / Rural Cooperatives NCBA helps co-ops compete in time of change

he National Cooperative to a network of centers nationwide that Business Association help develop cooperatives that enhance T (NCBA) is a national farmers’ income and boost rural membership organization economies. Today, NCBA remains a representing cooperatives strong advocate for increased funding of all types and in all industries. Its for the program. Development Initiative seeks to expand members operate in areas including In 2000, NCBA brought co-ops to the role of cooperatives in creating agricultural supply and marketing, child- the cutting edge of technology by win- economic opportunity in inner cities, care, energy, financial services, health ning approval for a new top-level both through self-help and legislative care, housing, insurance, telecommuni- Internet domain exclusively for cooper- solutions. cations, purchasing and shared services, atives. The new domain, .coop, joins As it looks to the future, NCBA and food distribution and retailing. .com and .org at the end of web and e- continues to address the challenges Through its education, co-op devel- mail addresses. The .coop registry, facing cooperatives and to identify opment, public policy and internation- launched in January 2002, has regis- solutions that will help co-ops over- al development programs, NCBA tered more than 8,000 .coop Internet come those challenges. Its current helps co-ops compete in a changing addresses. agenda includes countering efforts to economic and political environment. It Over the past half century, NCBA limit or repeal cooperative tax exemp- also provides a strong, unified voice for has also played a prominent role in tions and studying the conversion of co-ops on Capitol Hill. making cooperatives a key component co-ops to other business structures. In Founded in 1916, the National of international development policy. addition, in recent months, NCBA has Cooperative Business Association was In 1944, it formed the Freedom Fund organized opposition to a ruling by a known as the Cooperative League of to help cooperatives recover in war- national accounting standards board the USA until 1985. It was the first torn Europe. The following year, it that threatens to throw the balance national organization for cooperatives. Although NCBA’s name has changed over the years, its primary mission never has. For nearly 90 years it has been dedicated to developing, advanc- ing and protecting cooperatives. In the United States, NCBA has played a key role in creating many new self-help organizations to support the cooperative sector. It helped form North American Students of Cooperation in 1946, the National Richard Dines, NCBA’s director of co-op development, testifies before the House Financial Association of Housing Cooperatives Services Subcommittee. Photo by Robert Visser/Photopress Washington in 1950, Parent Cooperative Preschools International in 1960, played an integral role in creating the sheets of thousands of co-ops into Cooperative Business International in Cooperative for American chaos by reclassifying member equity 1984, and both Cooperation Works! Remittances to Europe, which provid- as debt. and the Cooperative Grocers ed economic relief to war-torn With these and other issues in Information Network in 1999. In the Europe. Today we all know this orga- mind, in early 2004 the NCBA board 1970s, NCBA lobbied Congress to nization as CARE. approved formation of a Cooperative create the federally chartered National Since the 1950s, in partnership with Tax and Finance Council that will Cooperative Bank. the U.S. Agency for International focus on key cross-sector legal, finan- In the 1990s, NCBA played a lead- Development, NCBA’s CLUSA cial and tax issues. ing role in convincing Congress to International Program has managed Contact information: website: establish the USDA’s Rural Cooper- more than 200 long-term international www.ncba.coop; Phone: (202) 638-6222. ative Development Grants program as development projects in 53 countries. Address: 1401 New York Ave. NW, a new source of funding for coopera- Today, NCBA is using its develop- Suite 1100, Washington, D.C. 20005. tives in rural areas. The program has ment expertise to help troubled inner President and CEO: Paul Hazen; Board since provided more than $35 million cities. Its new Urban Cooperative Chair: Ann Hoyt. ■

Rural Cooperatives / May/June 2004 25 NMPF tackles tough issues for dairy co-ops

he National Milk members are active dairy farmers. • Seeking the best-possible treatment Producers Federation Federation activities focus on leg- of the U.S. dairy production sector T (NMPF) represents dairy islative and regulatory actions concern- as the White House negotiates trade marketing cooperatives ing federal milk marketing orders, the deals within the World Trade throughout the United dairy price support program, product Organization, Australia, Chile and States and is the “granddad” of com- standards and quality programs, inter- Central America. modity organizations, formed in 1916. national trade, child nutrition pro- Numerous information services of Soon after formation, NMPF formal- grams, animal health, and food safety. the federation are designed to help ized and focused efforts of several A few of NMPF’s major accom- interpret the dairy industry to govern- dairy leaders to secure passage of the plishments in the past year ment leaders, the media and vari- Capper-Volstead Act, the “Magna include: ous public audiences, plus keep Carta” of farmer cooperatives. This • Creating a unique new dairy farmers informed of essential legislation provides a limited milk supply-and-demand federal actions affecting exemption from anti-trust laws, allow- balancing program, them. A biweekly newslet- ing farmers and associations of farmers Cooperatives Working ter, “News for Dairy Co- to lawfully act together to market their Together, to help ops,” reports on congres- commodities. improve low producer sional and regulatory NMPF continues to provide the prices; developments and federal forum for dairy-farmer involvement in • Working to strengthen administrative action. An the formation of national public policy. the dairy price support annual booklet, “Dairy The federation, headquartered in program by proposing Producer Highlights,” contains Arlington, Va., provides dairy farmers changes that will prevent the a wide variety of data about milk and their cooperatives an organization farm-level price from dropping production, purchases, utilization and to develop policy positions and long- below $9.90/cwt.; related statistics. range objectives. These positions are • Gathering more support for legisla- “The Regulatory Register” and represented to Congress, executive tion restricting the imports of Milk “Import Watch” are regular newslet- agencies and regulatory bodies affect- Protein Concentrate (MPC) and ters that cover key areas of interest to ing the dairy industry. Casein; the dairy industry. NMPF tries to maintain and improve • Developing a new dairy proteins Contact information: website: the economic well-being of dairy farm- program to encourage the produc- www.nmpf.org; phone: (703) 243-6111; ers and their cooperatives and to assure tion of a domestic supply of Milk address: 2101 Wilson Boulevard, Suite consumers an adequate supply of whole- Protein Concentrate; 400, Arlington, Va. 22201. President some milk and dairy products. A majori- • Helping to ensure that mad cow dis- and CEO: Jerry Kozak. BoardChair- ty of NMPF’s voting delegates, board of ease in the United States does not man: Charles Beckendorf (DFA). directors and executive committee adversely affect dairy operators; ■

NSAC: Making sure co-op numbers add up right

he National Society of the professional performance of its Since its formation in 1936, NSAC Accountants for Cooper- members in their service to coopera- has sponsored an annual meeting and T atives (NSAC) is a pro- tives by providing information, educa- tax seminar. The annual meeting pro- fessional society of 2,000 tion and training on issues affecting vides a forum for addresses by, and dis- accountants, attorneys, cooperative management, accounting, cussions with, recognized experts in financial officers, bankers and others taxation and finance. NSAC acts as a accounting, taxation, finance, manage- actively involved in the financial plan- technical representative for coopera- ment, and government. The tax semi- ning and management of cooperative tives in formulating accounting princi- nar features concurrent sessions for businesses. NSAC strives to enhance ples and auditing standards. varying interests and experience levels.

26 May/June 2004 / Rural Cooperatives NAHC advocates for co-op housing nationally

he National Association HUD’s Section 207 mortgage insur- through that transition, addressing re- of Housing Cooperatives ance program. financing and rehabilitation needs, (NAHC) helps low- and In 2003, NAHC successfully per- adopting policies to replace HUD reg- T moderate- income fami- suaded Congress to increase the HUD ulations, and deciding whether to lies govern, operate and mortgage limit for manufactured home retain sales price or income restric- preserve affordable cooperative hous- co-op parks from $9,000 to $17,000. tions. ing communities for themselves and The aging of cooperative future residents. Over 1.2 million leadership creates serious gover- families in 44 states benefit from nance challenges, and bad gover- cooperative homeownership. nance is one of the three biggest NAHC is the national advocate threats to co-op survival. NAHC for affordable housing development recently adopted a code of ethics and preservation through the coop- for co-op board members and erative form of ownership. It pro- appointed a committee to devel- vides extensive training to boards of op a series of workshops on directors of housing cooperatives to excellence in governance. make them more effective in man- NAHC is a member agency in aging their communities and pro- the Combined Federal viding service to residents. NAHC Campaign through the Human also trains on-site management per- and Civil Rights Charities of sonnel, who represent the first con- America. NAHC is also an eligi- tact in providing service and attract- ble recipient in the United Co- ing new residents. op Appeal workplace giving cam- NAHC works with other non- Residents of the Meredith Center Cooperative — New paign and the United Way of the profit groups in sponsoring the cre- Hampshire's first manufactured housing park co-op — National Capital Area. ation of new cooperatives for low- gather for a "family" photo. Photos courtesy New Hampshire Contact Information: web- and moderate-income families and Community Loan Fund site: www.coophousing.org; senior citizens. phone: (202) 737-0797; address: In rural areas, housing cooperatives President Bush signed the increase 1707 H St., NW, Suite 201, can be financed with the USDA Rural into law in December 2003. Washington, D.C. 20006. President: Development’s Section 515 program or Many NAHC member cooperatives Bill Magee, Noble Square the U.S. Department of Housing and are coming to the end of their original Cooperative, Chicago, Ill.; Board Urban Development’s Section 213 HUD-insured mortgages. NAHC is Chairman: Barbara Meskunas, San program. Manufactured-home parks creating new educational workshops Francisco, Calif. Executive Director: can be developed as cooperatives under and publications to help cooperatives Douglas Kleine. ■

Each of NSAC's 12 chapters sponsor advanced course was designed for the unique to cooperatives. NSAC goals an annual technical session and tax experienced cooperative accountant. and policies are established by a seminar. All the programs offer contin- NSAC publishes a quarterly maga- national board of directors, which uing professional education credits to zine, The Cooperative Accountant, which meets twice a year. Its five-member participants, as do the NSAC Audit furnishes members with timely infor- executive committee is authorized to and Accounting (A&A) Seminars. The mation on accounting, tax and miscel- act on its behalf between meetings. basic course targets accountants and laneous financial and economic topics Contact information: NSAC is accounting employees of cooperatives about co-ops and their patrons. managed by Advanced Management and public accounting firms who have NSAC is dedicated to ongoing Concepts, 136 South Keowee St., Day- limited experience in the field. The research, seeking solutions to problems ton, Ohio, 45402. (937) 222-5794. ■

Rural Cooperatives / May/June 2004 27 Farm Credit Council promotes lending system dedicated to improved quality of farm life

he Farm Credit Council had $11.5 billion in loans benefiting (FCC), based in farmers age 35 or younger; $16.9 bil- Washington, D.C., is the lion in loans that benefit beginning T national trade association producers who have 10 years experi- of the Farm Credit ence or less; and $28.6 billion in System and represents the system’s leg- loans to small producers with less islative and regulatory interests, as well than $250,000 in annual gross sales as providing a wide range of business of agricultural products. services to Farm Credit institutions. • With five banks, nearly 100 lending The Farm Credit System’s mission is institutions and more than 1,000 to maintain and improve the quality of branch locations, Farm Credit is in The Farm Credit Council is gov- life in rural America and on the farm, the communities and areas of our erned by a 23-member board that through constant commitment to com- more than 450,000 customer-owners. implements the Council’s public policy petitive lending, expert financial ser- positions. The current board chairman vices and advice, and a feeling of part- The Farm Credit Council was is M. Wayne Lambertson, a poultry nership with our customers. established in 1983 to provide an effec- and crop producer from Pocomoke Council membership is comprised tive voice with the U.S. Congress and City, Md. Under the direction of the of five district Farm Credit Councils government agencies on farm credit board, Kenneth E. Auer, President and and five Farm Credit banks, whose issues. The structure for developing CEO, coordinates and directs the daily membership in turn, comes from near- positions on legislative issues is provid- affairs of the Council, carried out ly 100 direct lending associations ed by the district councils. The process through its Washington-based staff. across the country. The cooperative begins with the farmer-directors of the Council funding comes from dues associations and banks in the Farm member organizations. assessed to its member organizations. Credit System are owned by the mem- The Council’s mission is to enhance ber-borrowers. Together, they are the the political effectiveness of the mem- leading lender to agricultural produc- bership and their member institutions, ers and rural businesses and communi- and in doing so, the Council centers its ties. Through the national network of attention on legislative, governmental lending institutions, the Farm Credit and regulatory issues that affect agri- System: cultural credit. The Council staff • Provides more than $93 billion in maintains close liaison with govern- loans and manages over $116 billion ment agencies such as the Farm Credit of total assets; Administration, the U.S. Department • With more than $18.9 billion in cap- of Agriculture and with Farm Credit ital, Farm Credit has the strength to System standing committees, among ensure that agricultural producers others. and others in rural America have a As a regular part of its operation, constant source of competitively the Council serves as a conduit of priced credit in good times and bad; information from Washington to its • As a customer-owned organization, membership, and serves to inform Farm Credit returned more than The winter issue of Financial Partner Congress and government agencies on $365 million in cash distributions magazine is a product of Farm Credit the views of its members. and patronage dividends to our cus- Financial Partners Inc. (FPI), Agawam, Contact information: website: tomer-owners in 2003. Mass., and the four Northeast Farm Credit www.fccouncil.com; phone: (202) • Knowing the difficulties faced by Associations. FPI provides Farm Credit 879-0854; address: 50 F Street, NW, young, beginning and small farmers, Associations nationwide with customer Suite 900, Washington, D.C. 20001. Farm Credit takes seriously its oblig- service for information technology, opera- President and CEO: Kenneth E. ation to assist the next generation of tions, human resources, legal services, Auer; Chairman: M. Wayne agriculturists. In 2003, the System marketing, communications and training. Lambertson. ■

28 May/June 2004 / Rural Cooperatives CFC: rural electric co-ops’ own financial powerhouse

he National Rural some $34 billion in total credit com- Utilities Cooperative mitments, CFC offers rural electric T Finance Corporation systems the financing they need to (CFC) is a privately ensure a dependable source of energy owned, non-governmen- for rural consumers. tal organization that provides low-cost Guided by a 22-member board of capital and state-of-the-art financial directors representing the managers products and services to its owners, the and directors of its member coopera- more than 1,000 electric cooperatives tives, CFC operates from its corporate across the United States. CFC is the headquarters in Herndon, Va., with primary private market lender to rural more than 200 employees, 15 of whom created in 1987 solely to serve the electric systems, which serve more are regional representatives located needs of the rural telecommunications than 32 million end-users of electricity. throughout the United States. By industry. RTFC has carried out an CFC’s owners con- essential role in rural tele- sist of electric cooper- phone financing, providing ative distribution sys- needed funds for system tems, power supply upgrades, new technology, systems, statewide acquisitions, and an array of associations and ser- service enhancements. vice organizations. It National Cooperative serves as the sole Services Corporation (NCSC) source of financing for is a privately funded, mem- more than 200 electric ber-owned, taxable coopera- cooperatives and sup- tive that began operations in plements the credit 1981. NCSC provides electric programs of the cooperatives and their affili- USDA Rural ates with specialized financing Development’s utilities and related financial services. programs. NCSC offers a loan program CFC was launched that provides financing to for- in the mid-1960s, profit and nonprofit associates when the electric affiliated with CFC owners, cooperative program generally for rural economic began to seek alterna- development initiatives. tive funding sources to CFC works closely with CFC — the Herndon, Va., headquarters of which is seen here — is the pri- supplement federal mary private market lender to rural electric systems serving more than 32 NRECA, the National Rural financing of coopera- million consumers. Photo courtesy CFC Telecommunications tives’ growing capital Cooperative, USDA Rural needs. In 1967, the Development, Federated National Rural Electric Cooperative maintaining high credit standards and Rural Electric Insurance Exchange, Association (NRECA) proposed the credit ratings, CFC provides its owners and similar organizations to ensure creation of a nonprofit financing insti- with competitively priced financing that electric cooperatives have the tution that would be cooperatively and investment opportunities through tools they need to prosper in a chang- owned by the electric cooperatives. its role as a conduit to the worldwide ing marketplace. NRECA members approved this plan, private capital markets. Contact information: website: and on April 10, 1969, CFC was incor- CFC manages several related orga- www.nrucfc.coop ; phone: (703) 709- porated. nizations. Rural Telephone Finance 6700; address: 2201 Cooperative Way, As a financial powerhouse with Cooperative (RTFC) is a member- Herndon, Va., 20171. CEO: Sheldon more than $21 billion in assets and owned, nonprofit finance cooperative Petersen. ■

Rural Cooperatives / May/June 2004 29 NRECA programs benefit 865 co-ops, 37 million consumers nationwide

ational Rural Electric NRECA’s Cooperative Association annual meeting is N (NRECA), located in one of the largest Arlington, Va., represents national gather- the national interests of ings of coopera- the nation’s more than 900 cooperative tive and rural electric utilities and the consumers they leaders and con- serve. Organized in 1942, NRECA sumers, often provides national leadership and mem- attracting more NRECA and its member coopera- ber assistance through legislative repre- than 12,000 directors, managers, tives administer a program of technical sentation before Congress and the employees and cooperative member- advice and assistance in developing executive branch. It also provides: rep- owners. Delegates consider and act on countries around the world. NRECA resentation in legal and regulatory pro- policy resolutions that guide NRECA’s International Ltd. has helped more than ceedings affecting electric service and issue and organizational agenda, hear 50 million people in the world’s poorest the environment; communication ser- addresses by key public figures and countries achieve the economic and vices; education and consulting for attend panel sessions on major issues social benefits of reliable, affordable cooperative directors, managers and affecting cooperatives, electric utilities power by adapting the successful model employees; energy, environmental and of locally owned electric cooperatives. information research and technology; Programs are designed with close atten- training and conferences; and health tion to local demand conditions and use insurance, retirement benefits and the most appropriate power generation financial services. Programs are funded methods, including distributed genera- through dues and fees. tion and renewable energy systems. The NRECA’s member cooperatives NRECA International Foundation, serve 37 million people in 47 states funded by voluntary contributions, and 80 percent of the nation’s counties. coordinates the Sister Cooperatives Most of the 865 distribution systems Program and directs the collection and are private, consumer-owned coopera- shipping of donated equipment and tives, although some are public power materials to support overseas projects. districts. NRECA membership As new demographic and economic includes other organizations formed by patterns emerge, electric cooperatives’ these local utilities: generation and operations evolve and their needs transmission cooperatives (65); become more diverse. NRECA’s leg- statewide and regional trade and ser- islative, legal and regulatory agenda Touchstone Energy Cooperatives teach vice associations; supply and manufac- middle-school students about the science, has become more diverse, embracing turing cooperatives; data processing history, and value of electricity through the hundreds of issues affecting electric cooperatives; and employee credit "Get Charged!" program, in cooperation utility generation, transmission and unions. Associate membership is open with the Discovery Channel School. distribution; energy policy and the to equipment manufacturers and dis- Photo courtesy NRECA environment; finance and tax matters; tributors, wholesalers, consultants and telecommunications; jobs creation; other entities that do business with and their consumer-owners. federal disaster assistance; the coopera- electric cooperatives. Concurrently, the TechAdvantage tive business model and governance; Tw o major publications inform and Conference and Expo commands more and consumer protections. educate members, decisionmakers and than 50,000 square feet of exhibit Efforts in the last two decades to the interested public: RE Magazine, space, showcasing more than 250 lead- forge a national energy policy through published monthly, and Electric Co-op ing-edge suppliers of power produc- legislation in Congress and sweeping Today, a weekly newspaper that reports tion, information technology, power regulatory initiatives at the Federal on activities and issues important to delivery, and customer management Energy Regulatory Commission electric cooperatives and NRECA. products and services. (FERC) have the potential to alter rad-

30 May/June 2004 / Rural Cooperatives ically the relationship between electric Education, training and leadership tems help unify advertising, marketing utilities and their consumers. NRECA’s programs have evolved to focus atten- and community relations activities and legislative and regulatory advocacy tion on the increasing level of public provide a consistent image of electric efforts focus on controlling costs for and policymaker scrutiny of American cooperatives nationwide. consumers, protecting them against business resulting from the latest wave NRECA also assists its member sys- market power abuse and anti-competi- of illegal activity in the corporate tems through community and econom- tive behavior, and on preserving mem- world. Courses cover director fiduciary ic development support, including a ber co-ops’ governance structure by responsibility and conduct; cooperative wide array of resources for financing, keeping operational and policy deci- business principles and ethics; effective planning, and partnering through pub- sions in the co-op boardroom. working relationships between direc- lic and private organizations across the One of the toughest challenges elec- tors, CEOs, attorneys and auditors; country. tric cooperatives face as employers is the development of principle-centered Contact Information: website: ever-increasing cost of healthcare cover- policies; and strategic planning. http://www.nreca.coop; Telephone: age for their employees and retirees. The Touchstone Energy® 703-907-5500; Address: 4301 Wilson The association’s legislative efforts in Cooperatives brand supports the com- Blvd., Arlington, VA 22203. President: this area focus on employer flexibility, munication and marketing efforts of David J. Cowan, Gettysburg, Pa.; access to quality programs and providers electric cooperatives. Award-winning Chief Executive Officer: Glenn and equity for rural Americans. materials developed for member sys- English. ■

Federation of Southern Co-ops: Three decades of sustaining rural Southern communities, saving black-owned farmland

ince 1967, the Membership includes 12,000 black Federation of Southern farm families, who individually own Cooperatives/Land small acreage, but collectively own S Assistance Fund more than a half million acres of land (Federation) has success- and work through 35 agricultural fully provided self-help economic cooperatives to purchase supplies, gain opportunities and hope for many low- technical assistance and market their income communities across the crops. It also includes 15,000 small South. The Federation is, in fact, the savers in 16 community development only organization in the Southeast credit unions that have accumulated United States that has as its primary $24 million in shares and made $113 objectives the retention of black- million in loans since inception. owned land and the use of cooperatives The Federation owns and operates for land-based economic development. the Rural Training and Research James Nesmith says there simply aren’t “Cooperatives are businesses that Center (RTRC) on 850 acres of land any better organic tomatoes than those are locally controlled and build wealth grown in South Carolina by his dad, near Epes, Ala., where members learn through the participation of people,” Theodore Nesmith, a member of Peoples farming skills, rural business develop- says Federation Executive Director Cooperative. Photo by D.J. Johnson, courtesy ment practices, leadership skills and Ralph Paige. “They are an ideal way S.C. Extension Service ways of working together in coopera- of helping poor folks advance their tives and credit unions. own interests and provide for their This led to a much stronger and The programs of the Federation are own destinies.” more comprehensive program that comprehensive. They cover agricul- In 1984 the Emergency Land Fund, retains, acquires, manages and devel- ture, credit, housing, markets, land the pioneer organization in black land ops land and other resources using retention and advocacy. While its pro- retention, merged with the Federation. cooperative principles. grams are implemented in its offices in

Rural Cooperatives / May/June 2004 31 Mississippi, Alabama, Georgia and South Carolina, the RTRC is the hub of the Federation’s outreach and train- ing efforts. Primary programs include: • Small Farm and Sustainable Agriculture — The Federation is committed to providing outreach and technical assistance to black family farmers as integral to its overall thrust. One of the avenues of out- reach to farmers was the 1990 Minority Farmers Act (Section 2501 of the Farm Bill). As an initiative of the Federation, Section 2501 addresses the need for USDA to The Federation is helping Eugene Hall and other farmers in Sumter County, Ala., form a goat offer more services to limited- producers’ cooperative. Photo by Jim Alexander resource minority farmers by offer- ing grants to community-based orga- program is to help farmers develop vidual farm goals; technical assistance nizations and landgrant colleges to successful family farm businesses in farm management; assistance in offer outreach services. The primary through: financial analysis of farms; debt restructuring; and alternative goal of the sustainable agriculture technical assistance in setting indi- crop analysis.

Rural Cooperative Development Centers

ARKANSAS E-Mail: [email protected] MISSOURI Arkansas Rural Enterprise Center Home Page: www.kccd.org Missouri Farmers Union Donna Uptagrafft, Program Associate Family Farm Opportunity Center 38 Winrock Drive MASSACHUSETTS Russ Kremer, President Morrilton, AR 72110-9537 Cooperative Life/Cooperative 325 Jefferson Street Telephone: (501) 727-5435 Development Institute Jefferson City, MO 65101 Fax: (501) 727-5242 Lynn Benander, CEO Telephone: (573) 659-4787 E-Mail: [email protected] 277 Federal Street FAX: (573) 659-4787 Home Page: www.winrock.org Greenfield, MA 01301 E-Mail: Telephone: (413) 774-7599 [email protected] COLORADO FAX: (413) 773-3948 Home Page: Rocky Mountain Farmers’ Union E-Mail: [email protected] www.missourifarmersunion.org Cooperative Development Center Home Page: www.cooplife.coop Bob Mailander, Director MISSOURI 5655 S. Yosemite St., Suite 400 MISSISSIPPI Missouri Incutech Foundation Greenwood Village, Co 80111 Mississippi Center for Russell C. Lindenlaub, Executive Telephone: (303) 752-5800 Cooperative Development Director FAX: (303) 752-5810 Melbah Smith, Director 800 W. 14th Street, Suite 111 E-Mail: [email protected] 233 E. Hamilton Street Rolla, MO 65401 Home Page: www.co-ops.org Jackson, MS 39202 (573) 364-8570 Telephone: (601) 354-2750 www.missourienterprise.org KENTUCKY FAX: (601) 354-2777 Kentucky Cooperative E-Mail: [email protected] Development Center Home Page: Larry Snell, Executive Director www.supermarketcoop.com/mac.htm 411 Ring Road Elizabethtown, KY 42701 Telephone: (270)763-8258 FAX: (270) 763-9927

32 May/June 2004 / Rural Cooperatives • Land Assistance — Black rural land tive development; value-added pro- three major areas: multi-family hous- ownership has declined drastically jects; rural/urban marketing; and ing development; multi-family hous- over the last century, from 16 to 19 emerging market opportunities. ing management, and technical assis- million acres owned in 1910 to only • Credit Unions — The focus of the tance for single family housing 7.8 million acres in 1997. And the credit union department is to pro- • Advocacy and Coalition Building decline continues. To help retain and vide technical assistance and train- — To ensure appropriate and rele- protect rural land ownership, the ing to individuals from low-income vant program services for rural com- Land Assistance Fund Program rural communities who have deter- munities, the Federation works in focuses on: legal assistance; educa- mined a need for low-cost, commu- coalition with other organizations tion; tax sales; wills and estate plan- nity-controlled consumer credit. and advocates for: rural community- ning; adverse possession; eminent Technical assistance is offered in the based economic development; domain and condemnation; mineral following areas: chartering; comput- affordable rural housing; farmers’ rights; and financial assistance. erizing; non-member deposits; busi- rights; fair trade policies; cooperative • Cooperative Marketing — The ness plans; youth credit unions; and credit union development; average size of an African American auditing; board training; and com- renewable energy strategies; environ- farm is just over 100 acres. The mittee training. mental policy. Federation encourages alternative • Housing — The Federation has crop production that is more suitable been instrumental in building quality Contact Information: to smaller farm size to help ensure affordable housing and manages its www.federation.coop; (404) 765-0991; sustainability of the farm. The focus housing programs through the 2769 Church St., of our marketing program is: produc- Panola Land Buyers Association. East Point, GA 30344; tion/marketing assessments; coopera- The housing department focuses on Executive Director: Ralph Paige. ■

MONTANA NORTHWEST SOUTH CAROLINA Lake County Development Center Northwest Cooperative South Carolina Center for Billie J. Lee, Executive Director Development Center Cooperative Business Development 319 Main St. Diane Gasaway, Project Manager Dr. Emmanuel N. Onunkwo, Director Ronan, MT 59814 1063 Capitol Way South, Suite 214 PO Box 7568 Telephone: (406) 676-5901 Olympia, WA 98501 Orangeburg, SC 29117 E-Mail: [email protected] Telephone: (360) 943-4241 Telephone: (803) 533-3682 Home Page: www.lakecountycdc.org FAX: (360) 570-8415 FAX: (803) 533-3639 E-Mail: [email protected] E-Mail: [email protected] NEBRASKA Home Page: www.nwcdc.coop Nebraska Cooperative SOUTH DAKOTA Development Center OHIO Value-Added Agricultural Center Dr. Lynn H. Lutgen, Director Ohio Cooperative Dallas Tonsager, Executive Director 217 H.C. Filley Hall Development Center 303 Illinois Avenue SW Lincoln, NE 68583-0922 John Ellerman, Coordinator Huron, SD 57350 Telephone: (402) 472-3406 1864 Shyville Road Telephone: (605) 352-9177 E-Mail: [email protected] Piketon, OH 45661 FAX: (605) 352-9179 Home Page: ncdc.unl.edu Telephone: (740) 289-2071 E-Mail: [email protected] FAX: (740) 289-4591 Home Page: www.sdvalueadded.com NORTH DAKOTA E-Mail: [email protected] Dakotas Cooperative Business Home Page: WISCONSIN Development Center www.aede.osu.edu Cooperative Development Services Bill Patrie, Rural Kevin Edberg, Executive Director Development Director PENNSYLVANIA 131 West Wilson Street, Suite #400 3201 Nygren Drive, NW Keystone Development Center Madison, WI 53703 PO Box 727 860 Ridge Road Telephone: (608) 258-4396 Mandan, ND 58554-0727 Carlisle, PA 17013 FAX: (608) 258-4394 Telephone: (701) 663-6501 Telephone: (717) 243-2765 E-Mail: FAX: (701) 663-3745 FAX: (484) 214-0115 [email protected] E-Mail: [email protected] E-Mail: [email protected] Home Page: www.cdsus.coop Home Page: www.kdc.coop

Rural Cooperatives / May/June 2004 33 UW Center for Co-ops: Working together…then and now

By Ashwini Rao, Associate Director Anne Reynolds, “We are Outreach Specialist doing more work with a wider variety UW Center for Cooperatives of co-ops,” a reference to the broad client base that the Center interacts he University of with, which has expanded over the past Wisconsin Center for few years to now include forestry, utili- Cooperatives (UWCC) ties, health care, housing, food and T was established in 1962 worker co-ops, among others. For oth- to provide co-op train- ers at the Center, the shift has been in ing, assistance and education programs gaining a “deeper understanding of the to international and domestic coopera- issues” in our society and “achieving tives, and to conduct research directed greater impact through a broader range The shift in focus, however, has at all aspects of a cooperative business. of contacts” within our community. affected much of what the Center does Decades later, the Center continues to The research arm of the Center on a regular basis. The educational promote and research cooperative remains as robust as ever. Assistant workshops that UWCC organizes, in action as a means of meeting the eco- Professor and Senior Faculty Associate partnership with the Wisconsin nomic and social needs of people. Kim Zeuli joined the Center in 2001 to Federation of Cooperatives and the So what has changed? strengthen research in the areas of agri- Minnesota Association of “While the Center’s core mission cultural co-ops and co-ops in rural Cooperatives, have seen a progression has not changed, the focus of our work communities. “There has always been a toward topics on joint ventures, merg- has definitely shifted,” explains Bob lot of emphasis on research, and it con- ers/acquisitions, alternative co-op Cropp, professor emeritus and former tinues to remain a strong and critical structures and resulting financial director of the Center. Adds Interim part of the organization,” says Zeuli. implications.

KSU, NDSU Centers researching co-op issues

In addition to the University of industry standards and the ability of research — academic research topics Wisconsin Center for Cooperatives, cooperatives to compete with other tend to be general, with results pub- there are two other U.S. university- businesses in the marketplace. lished and accessible to the public; based cooperative research and educa- Contact information: www.age- specific research is usually undertaken tion centers. con.ksu.edu.accc/; phone: (785) 532- for a single cooperative, with results Arthur Capper Cooperative 1508; address: ACCC, Dept. of Ag confidential to the client; (3) out- Center (ACCC) — Located at Kansas Economics, 305 Waters Hall, K.S.U., reach/communication — by spreading State University, ACCC serves as a Manhattan, Kan. 66506. Director: the word about cooperative business premier center of excellence in cooper- David G. Barton systems, QBCC fulfills the traditional ative education. Its focus is on Quentin Burdick Center for role of a land grant university; and (4) research, business development, Cooperatives (QBCC) — Located at coordination/cooperation — QBCC finance, leadership, strategic manage- North Dakota State University, seeks to coordinate its activities with ment and marketing for cooperatives. QBCC functions in four primary other organizations and agencies in Its primary objective is to increase areas: (1) education, including acade- the region. In some areas it takes on a understanding of the cooperative form mic and executive; through academic leadership role, while in others it plays of business. It conducts teaching, education, QBCC seeks “to create a a supportive role. research and educational extension pool of university graduates who thor- Contact information: website: programs to help students and cooper- oughly understand cooperative philos- www.ag.ndsu.nodak.edu/qbcc; phone: atives understand and improve decision ophy, principles and management (701) 231-1016. address: QBCC, 301 making in cooperatives, cooperative strategies.” It is also involved in pro- Morill Hall, N.D. State University, performance, customer service to viding in-service, executive-level train- Fargo, N.D. 58105. Director: Dr. patrons of cooperatives, cooperative ing for directors and management; (2) William C. Nelson. ■

34 May/June 2004 / Rural Cooperatives “The focus on such topics reflects the beyond the university. A website movement and new opportunities in changing needs of our clients,” says (www.wisc.edu/uwcc) offering extensive cooperative development ensures that Cropp. “As University of Wisconsin- information and resource links has the Center’s efforts to promote co-op Extension state specialists, we need to be resulted in increased visibility for the education and research will continue flexible and be able to respond to their Center, expanding its reach beyond the for some time to come. [clients’] needs.” Annual conferences physical borders of the state of “The Center plans to continue to such as the Farmer Cooperatives Wisconsin. The availability of funds partner with co-op leaders, educators Conference, started a few years ago by and a heightened interest in rural devel- and researchers, and use these partner- the Center, stimulate critical thinking on opment start-ups and cooperatives have ships to enhance the work that we do how cooperatives need to address major also helped position the Center as a for co-ops,” says Reynolds. issues as well as engage researchers and resource for cooperative development Contact information: website: co-op leaders in a dialogue about best in the areas of agriculture, housing, www.wisc.edu/uwcc; phone: (608) practices and future trends impacting healthcare delivery and emerging mar- 262-3382; address: 230 Taylor Hall, agricultural cooperatives. kets, such as organic foods. 427 Lorch St., Madison, Wis. 53706. The response to changing trends is, The ever-increasing demand for Officers: Interim Director: Anne perhaps, more clearly reflected in the value-added agriculture, along with the Reynolds; Senior Faculty Associate/ Center’s initiatives to extend its services continuing strength of the co-op Center for Co-ops: Kim Zeuli. ■

CCA: Reflecting change, setting the pace 50 years of promoting innovative co-op communications

eteran cooperative com- jobs, the organization now counts municator Ann Mosby membership across the United States, says the decision to stop Canada and England. CCA is commit- V publishing CCA News in ted to keeping pace — or a few steps printed form was ahead — of the changing communica- “painful progress.” tions needs of the cooperative commu- The GROWMARK communica- nity. Members’ duties include writing, tions director led the Cooperative editing, photography, videography, Communicators Association (CCA) design and all the other skills needed committee that recommended the to help cooperatives tell their story. be resolved without members having group move to an electronic newsletter The steps CCA took to determine to struggle with them.” rather than the traditional black-and- what to do about its member newslet- Mosby’s involvement exemplifies white paper version. The decision mir- ter within the context of consolidating how members learn new skills from rors those Mosby and her peers make cooperatives and skyrocketing printing one another and exercise their know- at cooperatives everyday. It also high- and postage costs provide insight for how on behalf of the association, as lights how changes within the business cooperative communicators faced with well as their cooperative employer. world, in general, and cooperatives, in similar decisions at their own organiza- “The association work gives CCA particular, have a rippling effect. tions. members a forum for trying innovative “CCA provides a testing ground for The volunteer-driven CCA con- ideas where the stakes are not as high innovative communications strategies ducted a readership survey, reviewed as in their ‘real jobs’,” says CCA and tactics,” says CCA President the results by committee and acted on Executive Director Susie Bullock from Sheryl Doering Meshke, Associated a recommendation to change the way the organization’s headquarters in Milk Producers Inc. communications the newsletter was delivered. “Given Lubbock, Texas. Once tried, the com- director in New Ulm, Minn. “Our all this, I had to admit that leveraging municator can adapt those skills or peer network enables communicators available mechanisms to communicate knowledge to the particular challenges to speed the learning curve.” with members made real sense,” faced in real-life cooperative settings. Formed in 1954 after Minnesota Mosby says. “The change offered CCA’s successful ideas and programs and Wisconsin editors of cooperative interactivity, it would save expense, it are replicated in its members’ daily publications got together to share ideas would provide more timely delivery work – from the planning stages to and learn how to better perform their and it meant that technical issues could their implementation. Those stages, in

Rural Cooperatives / May/June 2004 35 themselves, reflect how sophisticated own cooperative’s communication The change is indicative of the communication is today. One doesn’t delivery systems. “With that, this lag- group’s – and their cooperative’s – just speak and expect to be heard. gard became an adopter and an active changing needs. As CCA goes, so goes Rather, the messenger speaks in many supporter of the process to improve cooperatives – or maybe it’s the different venues and different ways, CCA communications,” reverse. depending on the audience, yet with she says. CCA members gather for an annual the same key messages. Co-op Communications Though communication Institute each June for methods change, organiza- three days of seminars tions such as CCA still help and discussion designed members hold true to the to improve the skills of cooperative principle on members in the full education, training and spectrum of communica- information. tions. This year the “CCA operates much institute will be held Jun like a growing and chang- 12-15 in Louisville, Ky. ing cooperative, striving to The 2005 institute will effectively manage and be held in Denver. deliver member resources,” Contact informa- Meshke says. “We’re a tion: website: www.com- microcosm of the coopera- municators.coop ; tive community.” phone: (806) 777-6489; Mosby agrees, saying address: 5307 43rd St., recommending an elec- Lubbock, Texas 79414- tronic newsletter forced CCA board member Leta Mach (right) and Jamie Gasper of the Ag Commun- 1315. Executive her to leave the “comfort icators of Tomorrow participate in a communications exercise during a Director: Susie Bullock; zone” behind for CCA and recent CCA Institute. USDA photo by Dan Campbell President: Sheryl made her think about her Meshke (AMPI). ■ Association of Cooperative Educators Cross-border membership and collaboration brings growth

he Association of At a time when cooperatives have Cooperative Educators been cutting back on education staff, T (ACE) has a big vision: ACE’s membership has been growing. to strengthen coopera- “ACE gives a lot of bang for the tives and the cooperative buck,” says Leslie Mead, ACE execu- movement by promoting innovative tive administrator. “The combination The Internet not only offers a cost- educational responses to social and of a committed board, organizational effective way to reduce administrative economic changes. and foundation supporters, and tech- expenses, but it also allows frequent From the outside, ACE appears to nology allows ACE to serve its diverse communications with members and be an unassuming organization. Its membership and promote cooperative offers a wealth of information on part-time executive administrator education very efficiently.” cooperative research, education pro- works from her home in Arlington, Va. ACE brings together researchers, grams and developments. The Cooperative Foundation provides educators and cooperators from across “The ACE newsletter contains a lot many of the organization’s support ser- cooperative sectors as well as national of information gleaned from web- vices out of the CHS Inc. offices in boundaries, linking an otherwise decen- sites,” says Mead. “The web makes Inver Grove Heights, Minn. Its web- tralized field. Most ACE members available information on some very site is hosted by the University of come from the United States, Canada good cooperative education resources Wisconsin Center for Cooperatives in and Puerto Rico with membership from and innovative programs from all over Madison, Wis. the rest of the world growing. the world. Few people have the time

36 May/June 2004 / Rural Cooperatives to search for it. The newsletter pro- national and sector diversity of ACE “Despite continual changes in vides a valuable service by distilling membership. demographics and economies, there this information and making people This year’s institute in Montreal will remains a significant interest in coop- aware that it’s available.” be simultaneously translated in Spanish, erative education and recognition ACE recently began publishing its French and English. (The 2004 that education is essential to member newsletter electronically. The change Institute will be held Aug. 4-7.) commitment and support of coopera- reduced printing and mailing costs tives,” says William Nelson, president and allows greater flexibility in size, of the CHS Foundation and The design and color. The newsletters are ACE brings together Cooperative Foundation. posted on the ACE website and avail- “Cooperative Centers, universities able to all. researchers, educa- and state and national organizations While the Internet has expanded are all components in the revitaliza- ACE’s information and communication tors and cooperators tion of cooperative education. The capacity, the annual ACE Institute Cooperative Foundation sees the net- remains an important event for coop- from across coopera- working and information services erative education and networking. provided by ACE as very important The Institute includes recognition to this process.” of the best cooperative education pro- tive sectors... Contact Information: website: grams and honors cooperative educa- http://www.wisc.edu/uwcc/ace/ace.html ; tors at the annual awards banquet. Though ACE has been around for Phone: (651) 355-5481; address: ACE This year, ACE member Cooperativa over 40 years, its importance grew sig- C/O The Cooperative Foundation, de Seguaros Múltiples de Puerto Rico nificantly in recent years as events and P.O. Box 64047, St. Paul, Minn. commissioned an artist to redesign the organizations once considered cooper- 55164. President, Anne Reynolds ACE awards. The result is a stained ative education institutions were cur- (University of Wisconsin); Executive glass trophy that symbolizes the tailed or eliminated. Administrator: Leslie Mead. ■

ACDI/VOCA spreads co-op model worldwide

“The future belongs to the organized.” U.S. government funds most of the ed a U.S. co-op community project to —motto of the National organization’s activities. set up India’s largest fertilizer company Smallholder Farmers ACDI/VOCA is a bridge between as a cooperative. Association of Malawi the advantages and expertise of Today ACDI/VOCA carries the America’s cooperatives and pressing co-op banner in Paraguay, Brazil, nonprofit arm of the needs abroad. Sometimes the U.S. cooperative commu- link is person-to-person: nity, ACDI/VOCA works approximately 500 U.S. volun- A overseas to foster broad- teers serve in two- or three- based economic develop- week assignments each year to ment and vigorous civil society. It assists provide technical and manage- developing and transitional countries in: ment assistance. enterprise development and trade; food Improving the well-being of and agricultural systems; financial sys- people overseas is a win-win tems and crisis recovery. proposition since increased In the early 1960s Congress sought income abroad fuels U.S. to reprise overseas the role co-ops had exports. And developing played in developing rural America. nations, where populations are Thus, landmark foreign aid legislation burgeoning, are this country’s welcomed member-owned and democ- growth markets of the future. ratically run business and financial ACDI/VOCA, using U.S. Town hall-style meetings in Iraq are a means of organizations as partners in America’s farm credit volunteers, helped determining community priorities and organizing infrastructure improvement projects. Photos courtesy international assistance efforts, and privatize 400 cooperative ACDI/VOCA ACDI/VOCA was born. Today, the banks in Poland. It spearhead-

Rural Cooperatives / May/June 2004 37 Mozambique, South Africa, Tajikistan Cooperation helps knit together mon goal whether it is livestock and 30 other countries with a pro- torn societies. From Ethiopia, where improvement, agricultural marketing, gram that approaches $100 million in agricultural co-ops assisted smallhold- providing machinery to increase pro- value. Even where its work is not ers to recover from war and repressive duction, etc. Each of these projects has strictly co-op related, it always a sustainability element often manifests the principle of peo- lacking in pre-crisis coopera- ple organizing for their own tives funded by the state. In self-improvement. addition, we are encouraging Last year Andrew Natsios, cooperation among producers administrator of the U.S. to increase their incomes and Agency for International provide better lifestyles for Development, affirmed that themselves and their families.” approach and called ACDI/VOCA’s coopera- ACDI/VOCA “the premier tives enlist hard-to-reach rural agricultural development NGO people in the fight of their [nongovernmental organiza- lives against HIV/AIDS. Food tion] in the world.” security and economic sustain- The economic efficiency ability often depend on the and organizational impetus of productivity of smallholder cooperatives are especially farmers, and HIV/AIDS can valuable in countries that are in one generation turn food struggling. As Norway’s surplus into shortage. As rural Minister of International livelihoods are undermined, Development, Hilde Johnson, social disintegration is the said, “For the poor around the result. world, cooperatives can pro- In Ethiopia, where infec- vide a much-needed opportu- tion rates range up to 50 per- nity for self-determination and cent, ACDI/VOCA is helping empowerment.” 400 co-ops, with a total family By pooling resources and member population of 2.5 will, cooperative members posi- million, develop HIV/AIDS tion themselves to obtain ser- educational materials, sell vices, negotiate preferred terms condoms in cooperative shops, in the marketplace and exercise host frank trainings and use ACDI/VOCA helped establish the 100,000-member-strong political clout. Co-ops repre- music and drama to powerful- National Smallholder Farmers’ Association of Malawi, which sent the grassroots and they ly convey health messages. provides a solid array of member services. Its fiery birdseye chili balance corporate power, which peppers fetch premium prices on the international market. ACDI/VOCA’s activities are both welcome roles given revolve around helping farm- globalization’s inequities. Co- ers and entrepreneurs over- ops are founded and shaped by healthy government and ultimately sell high- seas participate in the global econo- democratic principles, which they, in quality coffee to Starbucks, to Iraq my. But ACDI/VOCA’s cooperative turn, foster. where nation-building and economic and association partners show their ACDI/VOCA builds cooperatives progress depend on communities orga- true colors in also rising to meet based on sound business practices so nizing for self-benefit, ACDI/VOCA members’ social, political and even that producers and marketers can helps people under stress overcome health needs. move into the market, achieve crisis, win freedoms and reach for Contact information: website: economies of scale and capture more prosperity. See www.acdivoca.org; phone: of their goods’ value. In fractional Serbia, 49 collectives (202) 879-0269; address: 50 F St. have been assisted by ACDI/VOCA NW, Suite 1100, Washington, D.C., Crisis? Call on co-ops since 2001 to create unity, stability and 20001. ACDI/VOCA is affiliated As U.S. foreign assistance focuses economic progress. Staffer Gene Neill with the National Council of Farmer increasingly on helping countries avoid says: “We provide lasting solutions by Cooperatives and the Farm Credit or recover from crisis, ACDI/VOCA’s establishing functioning, member- Council. Interim President: Don co-op development work is doubly owned, democratic units that serve all Crane; Board Chair: Jean Marie important. members in the area to achieve a com- Peltier. ■

38 May/June 2004 / Rural Cooperatives CUNA: Meeting the needs of 83 million members

redit Union National audio marketing programs, share Services Committee on this legisla- Association (CUNA) drafts, member business lending, ID tion. works in cooperation verification, money orders, IRAs, trav- • Challenges from banks: Banks are C with all the state credit elers checks, etc. continuously lobbying to have credit union leagues and the Another CUNA affiliate, U.S. unions pay federal income taxes — District of Columbia for the better- Central Credit Union in Lenexa, Kan., despite credit unions’ exemptions ment of America’s credit unions — provides investment, liquidity and cor- through their not-for-profit status. not-for-profit cooperatives that pro- respondent financial services to credit These additional taxes would ulti- vide affordable financial services to unions through a network of state or mately prove detrimental to credit people from all walks of life. More regional ‘corporate’ credit unions, union members, as this exemption than 90 percent of the nearly 10,000 which are essentially credit unions for allows credit unions to return their credit unions in the United States — credit unions. would-be “profits” to their members which are owned by more than 83 mil- Some of CUNA’s recent accomplish- in the form of lower loan rates, high- lion consumer members — are affiliat- ments and challenges facing it include: er deposit rates and lower fees than ed with CUNA through other financial institutions. membership in their Additionally, these lower rates bene- leagues. fit all American taxpayers, because CUNA, chartered in they ensure that other financial insti- 1934, is headquartered tutions stay competitive and avoid in Madison, Wis., and usury — which was a major con- Washington, D.C., tributing factor behind the begin- where it maintains a nings of credit union organization. governmental affairs • Financial literacy: CUNA works office. CUNA provides tirelessly to inform credit unions, the national leadership, a government, the media, America’s liaison with Congress youth and the general public on the and the various federal importance of financial literacy. agencies, publications • Hispanic Initiatives: As a tribute to and Internet-related ser- another founding principle - serving vices, market and demo- Credit Union House in Washington, D.C., includes rooms that people of modest means - CUNA graphic research, new credit unions can use for meetings or receptions when engaged works to help credit unions better in lobbying efforts in the nation’s capital. Photo courtesy CUNA product development, serve the financial needs of the United economic analysis, pub- States’ growing Hispanic community. lic relations, education and training • Privacy and the Fair Credit Here are some of the ways that and other services to its affiliated cred- Reporting Act: FCRA reauthoriza- CUNA has worked to achieve this it unions. tion was passed as part of the “Fair goal. CUNA has published a free United with CUNA and the leagues and Accurate Transactions” (FACT) resource guide for Hispanics and the through a combined management and Act of 2003. President Bush signed newly translated version of the leadership structure is CUNA it into law on Dec. 4, 2003. CUNA National Endowment for Financial Strategic Services, Inc. (CSSI), the played an integral role for credit Education’s High School Financial association’s financial products and ser- unions and consumers in advocating Planning Program student guide vices affiliate. CSSI provides credit passage of the legislation, which designed to help build financial litera- unions with access to high-quality ensures that our national system of cy among high school seniors. CUNA products, services and technologies credit reporting continues without is also fostering use of IRnet to pro- delivered with a competitive advantage interruption and, in turn, assures vide a lower cost remittance alterna- made possible through volume pricing that our nation’s consumers have tive to Hispanic and other immigrant and strategic program development. easy access to credit and receive fair populations. Products offered by CSSI’s chosen and appropriate protections of their Contact information: website: providers include: office supplies, personal financial information to www.cuna.org; phone: (800) 356-9655; imaging equipment, promotional prod- help protect against identity theft. address: P.O. Box 431, Madison, Wis. ucts, rate intelligence services, money CUNA was the only national trade 53705. President/CEO: Daniel A. handling equipment, ATM access, group for credit unions to testify Mica; Board Chair: Dick Ensweiler, security systems, membership and before the full House Financial (Texas Credit Union League). ■ Rural Cooperatives / May/June 2004 39 National Telecommunications Cooperative Association Responses to evolving technology, deregulation key to members’ future

he National Management Corporation (SMC). The much has changed in 50 years, the one Telecommunications $1 billion benefits program ensures that thing that has remained constant: dedi- T Cooperative Association members and their employees have cation to members and the success of (NTCA) is a nonprofit health care, retirement income, savings rural telecommunications. association representing plans, and insurance. The Recent NTCA accomplishments about 560 small and rural telephone Telecommunications Education include: cooperatives (or “telcos”) and commer- Committee Organization (TECO) is the • Its intercarrier compensation work cial telephone companies. These telcos association’s political action committee. group undertook an extensive data serve more than 3.6 million rural busi- The Foundation for Rural Service collection to evaluate the impact of nesses and residences and employ (FRS) is NTCA’s nonprofit, 501(c)(3) access charge reform proposals on more than 14,000 people. organization. The foundation’s mission rural incumbent local exchange car- In an era of rapidly evolving tech- is to promote, educate and advocate to riers. nology, deregulation and marketplace the public on rural telecommunications • Lobbied successfully to change the competition, NTCA’s goal is to ensure issues in order to sustain and enhance Federal Communication Commission’s attribution rules requiring a cooperative to include a director’s outside income in the com- pany’s revenues when applying for spectrum bidding credits. • With other associations, NTCA filed a joint petition with the FCC and a notice of appeal with the U.S. Circuit Court of Appeals for D.C., challenging the FCC’s intermodal (wireline-to-wireless) local number that rural Americans receive telecom- the quality of life within rural commu- portability rules. munications service on par with those nities. Funded solely through contribu- • Successfully challenged Financial available to urban residents — and at tions, FRS supports a number of pro- Accounting Standard Board 150 comparable rates. grams that address the needs of rural rules requiring cooperatives to treat NTCA’s members are complete communities and, in particular, the retained capital credits as liabilities communications providers, offering youth of rural America. The foundation rather than equity. every service from basic phone to high- sponsors a college scholarship program • Was instrumental in the creation and speed broadband Internet to video and an annual Youth Tour that brings passage of a new communications entertainment. NTCA is a full-service rural high school students to the law in Nigeria. association, offering a wide array of nation’s capital to learn about the • Conducted a comprehensive case member services, including: an effective telecommunications industry and to study of its work in the early 1990s government affairs program; expert witness the legislative process. It also to create two Polish telecom cooper- legal and industry representation; a runs an advocacy campaign, providing atives, both of which are still thriv- broad range of educational services; information to help increase awareness ing, more than 10 years later. comprehensive regular and special pub- of important telecom issues facing rural lications and public relations programs; consumers across the country. Contact information: website: assistance with business and technology NTCA’s record of service and www.ntca.org; phone: 703-351-2000; programs; and a complement of nation- achievement has led policymakers and address: 4121 Wilson Blvd., 10th floor, al and regional meetings. the public, alike, to have confidence in Arlington, Va. 22203. CEO: Michael NTCA also offers a complete range its capabilities. This year marks E. Brunner; Board President: Norman of employee benefits programs through NTCA’s 50th anniversary as the voice T. Welker, president, McDonough its wholly owned subsidiary, Services of rural telecommunications. While Te lephone. ■

40 May/June 2004 / Rural Cooperatives National Cooperative Bank Grocery, housing & purchasing co-ops on spectrum of organizations financed

An independent organic spirit of cooperation and democratical- financing for co-op and condo apart- grocery in San Francisco ly organized, even though they are not ments, as well as checking and sav- A makes the transition to cooperatives in the strictest sense. ings for consumers nationwide. 100-percent employee These groups, for example, may be ownership. An Alaska nonprofits that deliver services to their native corporation based in Nome local communities. They may be starts a clothing manufacturing busi- ESOPs (Employee Stock Ownership ness in Puerto Rico. A New York City Plans) giving workers an equity stake co-op apartment building refinances to in their companies. Or they may be make long-overdue capital improve- Alaska Native enterprises that, by their Working to ensure the continued ments. A Native American tribal enti- very nature, are member-run and vitality of the cooperative sector as a ty opens a stunning, award-winning member-driven. whole is also very much a part of golf course on Pueblo Indian lands in NCB is unique because it was created NCB’s mission. Which is why, every New Mexico. A charter school in a to serve the financial needs of this year, the bank publishes the NCB Co-op low-income Bronx neighborhood underserved market-niche — people 100, in both print and online versions, moves from a makeshift temporary who join together cooperatively to meet highlighting the nation’s top 100 co- location to a new, state-of-the-art personal, social or business needs, espe- ops and their contributions to cially those in low-income America’s economy. communities. Each October, NCB also plays a Chartered by Congress role in the celebrations surrounding in 1978, NCB was priva- National Co-op Month. In 2003, as tized in 1981 as a member- part of this annual observance, the owned financial institution. bank produced a video and accompa- As a bank whose mission nying brochure titled “What is a Co- is to serve and promote op? You’d be Surprised.” It shows how cooperatively organized cooperatives are interwoven through- enterprises, NCB’s success out American life. Copies can be NCB provided a $5 million line of credit to help an Alaskan is measured by the degree obtained by calling NCB at (202) 336- Native Corporation launch this garment-manufacturing to which its customers suc- 7742 or by sending an e-mail request plant in Orocovis, Puerto Rico. Photo courtesy NCB ceed. So, the bank continu- to [email protected]. ally changes and innovates The enterprises NCB serves are large high-tech campus. as its customers seek new financial and small. They are located in rural and These are just a small sample of solutions in an increasingly competi- urban communities. They affect the recent projects made possible by tive environment: lives of Americans in essential ways, financing from National Cooperative • In real estate lending, NCB promotes enabling them to realize their dreams of Bank (NCB), headquartered in multifamily homeownership by offer- owning a home, running a competitive Washington, D.C. For more than 20 ing an array of financial services to business, giving their children a good years, NCB has been providing a com- housing cooperatives and other types education and making sure they have prehensive array of financial services to of community associations. access to quality health care now and as cooperatives and other member-owned • In commercial and small business they grow older. NCB helps them by organizations throughout the country. banking, NCB helps member-driven crafting financial solutions tailored to Currently owned by more than organizations of all shapes and sizes their continually evolving needs. 1,800 of its customers, NCB serves a grow with customized financial ser- Contact information: website: spectrum of cooperatives, including vices. www.ncb.coop; phone: (800) 955-9622; wholesale grocery co-ops, retailer- • In community development, NCB address: 1725 Eye St. N.W., Suite 600, owned purchasing co-ops and housing assists at-risk communities with a Washington, D.C. 20006. President & co-ops. Beyond this customer base, unique blend of technical assistance CEO: Charles Snyder; Chairman: however, NCB also meets the needs of and development finance. Stuart Saft, Council of New York other enterprises, each grounded in a • In personal banking, NCB provides Cooperatives. ■

Rural Cooperatives / May/June 2004 41 USDA Rural Development: committed to the future of America’s rural communities

SDA Rural Development USDA Rural Development oper- ness. USDA maintains a library of more is committed to helping ates through a network of 47 state than 200 cooperative publications and U improve the economy offices and more than 800 field offices videos, ranging from How to Start a and quality of life in all located throughout the nation. Many Cooperative and Co-ops 101, to multi- of rural America. It helps of these are located in USDA Service volume sets on tax laws for cooperatives. to build a stronger nation by promot- Center offices. More than 50,000 of these publications ing development of rural housing and Because readership of this magazine are distributed every year, making community facilities, investing in rural is primarily cooperative-oriented, the USDA the world’s leading distributor of businesses, promoting development of following information focuses on Rural co-op educational materials. Many more new cooperatives and improved opera- Development’s Cooperatives and Rural are distributed electronically via the tions of existing co-ops, and building Utilities Programs. Rural Development website. an infrastructure of modern electri- Primary co-op program areas cal, telecommunications, water and include: waste disposal services. Technical assistance — is provid- USDA Rural Development ed to existing cooperatives facing spe- achieves its mission by helping rural cific problems or challenges. individuals, communities and busi- Examples of this aid can include: nesses obtain the financial and tech- helping a cooperative develop a nical assistance needed to address strategic marketing plan to cope with their diverse and unique needs. The changing competitive forces; assisting agency provides about $13 billion a co-op in making a crucial decision per year in direct loans, guaranteed whether to merge or form a joint loans and grants; it has an $86 bil- venture; finding ways to turn raw lion loan portfolio. products of cooperative into value- To help raise homeownership added products. These matters are rates, USDA Rural Development often life and death issues not only administers both direct and guaran- for a cooperative, but for the rural teed homeownership loan programs. communities in which they operate. It also has a self-help housing pro- USDA co-op staff can help gram, under which low-income peo- improve a cooperative’s business ple can use “sweat equity” to structure and operating efficiency. become homeowners. Rural This work often involves an analysis Development also helps to build of operations or assessing the eco- affordable rental housing and farm- nomic feasibility of new facilities or worker housing in rural areas. adding new products or services. USDA supports loans to busi- Under USDA’s Mutual Self-Help Housing Program, Technical assistance is largely nesses through banks and communi- rural people can become homeowners through an designed to benefit a specific cooper- ty-managed lending pools for pro- investment of “sweat equity.” USDA Photo ative business or group. However, the jects that create or preserve quality results often provide business strategy jobs and/or promote a clean rural envi- for all cooperatives. ronment. The agency’s financial Rural Cooperatives Program Cooperative research — creates a resources are often leveraged with The mission of Rural Develop-ment’s knowledge base necessary to support those of other public and private credit Cooperatives Program is to promote cooperatives dealing with changing source lenders to meet business and understanding and use of the coopera- markets and business trends. Studies credit needs in under-served areas. tive form of business for marketing and include financial, structural, managerial, Recipients of these programs may distributing agricultural products. It policy, member governance, legal and include individuals, corporations, part- serves cooperative members, directors, social issues, as well as various other nerships, cooperatives, public bodies, management, educational institutions, economic activities of cooperatives. nonprofit corporations, Indian tribes rural residents and all others with an Research is designed to have direct and private companies. interest in the cooperative form of busi- application to current and emerging

42 May/June 2004 / Rural Cooperatives requirements of cooperatives. Recent commodities. These grants cannot ing to defined selection criteria. In research studies have focused on equity be used for agricultural production. 2003, $6.3 million in grants were redemption plans used by cooperatives, The awarding of the grants — $13.2 awarded to 21 applicants. identification of new niche markets for million for 2004 — is as competitive cooperatives and opportunities and process, in which detailed applica- Rural Development’s obstacles cooperatives face when tions and business feasibility plans Other Business Programs exporting goods overseas. are reviewed by panels. Website: The rural business programs help Cooperative education — The www.rurdev.usda.gov/rbs/coops/ provide financing to rural business own- Cooperative Marketing Act of 1926 vadg.htm. ers, nonprofit organizations, coopera- mandates that USDA “promote the • Agricultural Marketing Resource tives, public bodies, and Indian tribes for knowledge of cooperative principles Center (AgMRC) — Funded in business ventures which create quality and practices and cooperate in promot- part by USDA Rural Development, jobs and stimulate the economy of rural ing such knowledge with educational this is a national “virtual resource” areas. The Business and Industry (B&I) and marketing agencies, cooperative center providing the latest informa- Guaranteed Loan Program creates part- associations, and others.” To meet this tion on value-added agricultural nerships with commercial lending insti- goal, Rural Development’s Co-ops enterprise development. The center tutions, the Farm Credit System and Program provides a wide range of has grown from a small website with Farmer Mac to provide financing for training and educational materials. a few areas of expertise to more than qualified rural business enterprises, The agency’s bimonthly magazine, Rural Cooperatives, reports significant achievement by cooperatives and examines the key issues facing them, presents the most advanced thinking of cooperative leaders and provides high- lights of agency research, technical assistance and educational activities. Cooperative development — this assistance can range from conducting an initial feasibility study to the creation and implementation of a business plan and development of bylaws. We also provide training for cooperative direc- tors. The overall goal is to provide a realistic view of what it will take to make a new cooperative succeed, and to help guide the leaders through the various stages of launching a cooperative. Cooperative statistics — are col- lected and published to detect growth Charles Ling, left, dairy economist with USDA Rural Development’s Cooperatives Program, trends and changes in structure and gets a tour of a milk bottling plant in Wisconsin. USDA photo by Ken Hammond operations of cooperatives. Data help identify and support research and tech- nical assistance activities. This infor- 150 different commodity areas. including cooperatives. This often takes mation is used extensively by legislative Website: www.agmrc.org. the form of loan guarantees which bol- and executive branches of government • Rural Cooperative Development ster existing private credit structures in in formulating agricultural and cooper- Grants — help establish operating funding projects which foster lasting ative-related policy. centers for cooperative development community benefits. Some recent special co-op initiatives to improve the economic condition of B&I loan guarantees can cover as include: rural areas through the development much as 60 percent of a loan of $10 • Value-Added Producer Grant of new cooperatives and improving million to $25 million, or as much as Program — Now in its fourth year, operations of existing cooperatives. 80 percent of a loan of $5 million or this grant program provides match- Eligible applicants are nonprofit cor- less. This assistance is available to ing grants to cooperatives and others porations, including institutions of businesses in areas outside the bound- in agriculture seeking to produce higher education. Applications are ary of urban areas with populations value-added products from U.S. farm solicited annually and scored accord- under 50,000.

Rural Cooperatives / May/June 2004 43 The Cooperative Stock Purchase capital to upgrade, expand, maintain vides financial assistance to rural com- Program, which operates as part of the and replace America’s vast rural elec- munities with extremely high energy B&I program, can help ag producers tric infrastructure. Under the authori- costs to acquire, construct, extend, buy stock to join a new-generation or ty of the Rural Electrification Act of upgrade and otherwise improve energy other stock-ownership cooperative, up 1936, USDA Rural Development generation, transmission, or distribu- to a maximum of $400,000. USDA will makes direct loans and loan guaran- tion facilities. USDA’s Rural Utilities guarantee up to 80 percent of these tees to electric utilities to serve cus- Program services approximately 686 loans for as long as seven years. tomers in rural areas. USDA is the active electric borrowers in 47 states. The Rural Business Enterprise majority noteholder for more than Grant Program provides grants to 700 electric systems. Rural Telecommunications Program public bodies and private, nonprofit USDA’s Electric Program makes USDA continues to provide many organizations serving rural areas out- loans and loan guarantees to finance programs for financing rural side the boundary and adjacent urban- the construction of electric distribu- America’s telecommunications infra- ized area of a city with a population of tion, transmission and generation facil- structure. The traditional infrastruc- 50,000 or more. Priority is given to ture loan program — consisting of applications from rural areas and hardship, cost of money, Rural towns with populations of 25,000 or Telephone Bank and guaranteed less. These grants can finance small loans — provides financing of broad- and emerging private businesses and band and other advanced services. cooperatives, or fund a revolving Since 1995, every telephone line loan program. constructed with USDA financing For more details of these and has been capable of providing broad- other Rural Development Business band service using digital subscriber Programs, visit: loop (DSL) technology. The www.rurdev.usda.gov, or call Distance Learning program contin- (202) 720-7287. ues its charge to wire rural schools to tap into a rich universe of education- Rural Utilities Programs al classes and resources; the Modern utilities came to rural Telemedicine program is helping to areas of the nation through some of improve health care delivery in rural the most successful government ini- America by “linking” small clinics tiatives in American history, carried and hospitals to major medical facili- out through USDA working with ties. rural cooperatives, nonprofit associa- A lineman repairs damage following a winter storm The Broadband Program is a loan in Texas. Rural telecommunications and electric tions, public bodies and for-profit program designed to increase the rate cooperatives throughout the nation look to USDA utilities. Today, USDA Rural of deployment of broadband technol- for much of their financing needs. USDA photo by Development’s Utilities Program Dan Campbell ogy to small towns in rural areas. carries on this tradition, helping rural Under this program, Rural utilities expand and keep their tech- Development can fund borrowers nology up to date, helping establish ities, including system improvements serving communities of up to 20,000 new and vital services such as distance and replacement required to furnish inhabitants. learning and telemedicine. and improve electric service in rural Contact information: Rural The public-private partnership areas, and for demand-side manage- Development website: which is forged between USDA and ment, energy conservation programs, www.rurdev.usda.gov; phone numbers: these industries results in billions of and on-grid and off-grid renewable Cooperatives Program (202) 720-7558; dollars in rural infrastructure develop- energy systems. Rural Business Program (202) 690- ment and creates thousands of jobs for Loans are made to corporations, 4730; Rural Utilities Program (202) the American economy. states, territories and subdivisions and 720-9540; Rural Housing and agencies, such as municipalities, peo- Community Facilities Programs: Rural Electric Program ple’s utility districts and cooperative, (202) 690-1533; address: (Cooperatives Providing reliable, affordable elec- nonprofit, limited-dividend, or mutual Program): USDA Rural Development, tricity is essential to the economic associations that provide retail electric Cooperatives Program, Stop 3250, well-being and quality of life for all of service needs to rural areas or supply 1400 Independence Avenue, S.W., the nation’s rural residents. The elec- the power needs of distribution bor- Washington, D.C. 20250. tric program provides leadership and rowers in rural areas. USDA also pro- E-mail: [email protected]. ■

44 May/June 2004 / Rural Cooperatives NEWSLINE Compiled by Dan Campbell

Send items to: [email protected]

USDA to award $23 million Applicants must be agricultural pro- UW’s Ann Hoyt elected for renewable energy projects ducers or rural small businesses, U.S. NCBA board chair Agriculture Secretary Ann M. citizens or legal residents and have Ann Hoyt, one of the nation’s most Veneman announced in early May the demonstrated financial need. USDA respected and widely published experts availability of approximately $23 million Rural Development grants may be used on cooperatives, has been elected to a in grants to support President Bush’s to pay up to 25 percent of the eligible two-year term as board chair of the energy plan to develop renewable ener- project costs. Eligible projects include National Cooperative Business gy systems and promote energy effi- those that derive energy from a wind, Association (NCBA). Hoyt is a profes- ciency improvements. Veneman said solar, biomass or geothermal source, or sor of consumer science at the the Renewable Energy Systems and hydrogen derived from biomass or University of Wisconsin-Madison and a Energy Efficiency Improvements pro- water using wind, solar, or geothermal senior faculty associate at the universi- gram was created as part of the 2002 energy sources. ty’s Center for Cooperatives. She teach- Farm Bill to assist farmers, ranchers and Applications must be completed and es, does research and develops training rural small businesses develop renew- submitted with a postmark no later than materials for all types of cooperatives. able energy systems and make energy July 19, 2004. Detailed information For more than two decades, Hoyt has efficiency improvements to their opera- about program requirements and infor- trained hundreds of cooperative direc- tions. In 2003, the Bush administration mation on how and where to apply is tors and managers for nonprofits. She invested $21.7 million to assist 114 included in the funding notice in the has also written widely on the history applicants from 24 states develop or May 5 Federal Register. Awards will be and development prospects of consumer improve wind power, anaerobic made on a competitive basis for the cooperatives. Hoyt holds a Ph.D. from digester, solar, ethanol and other bioen- purchase of renewable energy systems Kansas State University and is currently ergy related systems or energy efficien- and to make energy improvements. doing research on urban cooperative cy improvements. development in the United States.

For their tremendous, lifetime contributions to the nation’s cooperative system, the Cooperative Hall of Fame in Washington recently inducted three new members: (from left): Ralph Paige, executive director of the Federation of Southern Cooperatives; Henry Schriver (holding plaque), a co-op educator and leading proponent of cooperatives for 61 years, and Allen Thurgood, founder and CEO of 1st Rochdale Cooperative. With Schriver are: NCFC CEO Jean Marie Peltier, DFA Executive Vice President Don Schriver (Henry’s son) and CoBank CEO Douglas Sims. For details about each of the inductees, see the January-February 2004 issue of Rural Cooperatives, page 32. Schriver photo by Agi Schafer, courtesy DFA; Paige and Thurgood photos by Art Jaeger, courtesy NCBA

Rural Cooperatives / May/June 2004 45 “Ann is extremely knowledgeable to the care providers. With guidance vadg.htm. Deadline for application is and has led numerous other co-op from USDA Rural Development and 45 days from the date of publication. boards over the years,” NCBA other organizations, the care providers President & CEO Paul Hazen says. created a business plan reflecting their Farm Credit Bank of Texas “The depth of experience she brings to wishes for decent pay and benefits. doubles earnings in 2003 NCBA will be a tremendous benefit Cooperative Care was officially The Farm Credit Bank of Texas for us.” Hoyt succeeds Charles M. launched in 2001 by 52 workers who (FCBT), a $7.4 billion wholesale Snyder, president and CEO of the voted to incorporate, paid dues and lender, today reported strong earnings National Cooperative Bank. elected a board of directors. for 2003 and one of the largest patron- Elected to replace Hoyt as 1st vice Today, with 84 members, age distributions in the bank’s 87-year chair was Steven Cunningham, presi- Cooperative Care is fulfilling the mis- history. Bank net income of $64.8 mil- dent and CEO of IMARK Group in sion of its founding members by pro- lion for 2003 was nearly double the Oxon Hill, Md. Elected 2nd vice chair viding the county’s home care workers previous year’s income of $32.5 mil- was Andrew Brown, vice president for with fair pay and benefits through a lion, due largely to the sale of the industry and member relations of the business they democratically own and bank’s mineral rights holdings in National Rural Telecommunications operate themselves. The best aspect of November 2003 — a one-time event. Cooperative in Herndon, Va. Elected this program is that it gives this once- These strong earnings allowed the secretary-treasurer was Kathy Brick, disenfranchised group of workers a FCBT to declare $50.8 million in senior vice president and chief finan- voice on the job. patronage distributions last year to its cial officer of U.S. Central Credit Cooperative Care was one of nearly stockholders — 22 rural financing Union in Lenexa, Kan. The only new 1,000 applicants for the 2004 cooperatives in Alabama, Louisiana, board member elected was Ruffin Innovations in American Government Mississippi, New Mexico and Texas. Slater, general manager of the Weaver Award. The committee will select five These lending associations provide Street Market, a worker-owned and winners, which will be announced on loans and financial services to agricul- consumer-owned food cooperative in July 28 at the Excellence in tural producers, agribusinesses, coun- Carrboro, N.C. Headquartered in Government 2004 Conference, in try homeowners and other rural Washington, D.C., the 88-year-old Washington, D.C. landowners. NCBA represents cooperatives across “We are extremely pleased that we all sectors of the economy, including Co-ops eligible for were able to share our success with our agriculture, food distribution and Value Added Grants stockholders, who are also our cus- retailing, childcare, credit unions, USDA Rural Development is pro- tomers, by paying them a substantial housing, healthcare, energy and viding more than $13 million in feder- patronage on our earnings. That is our telecommunications. al funds for the Value-Added Producer way of reducing their effective net cost Grant (VAPG) Program in 2004. of borrowing, and it is the single great- Wisconsin’s Co-op Care Program Eligible applicants include farmer- and est advantage of doing business with a finalist for prestigious award rancher-owned cooperatives, indepen- cooperatively owned bank,” says bank Representing a major change in the dent producers, agricultural producer CEO Larry Doyle. delivery of home care services, groups and majority-controlled pro- The bank’s gross loan volume of Waushara County’s Cooperative Care ducer-based business ventures. $5.8 billion at Dec. 31, 2003, reflected has been named one of 15 finalists for Grants may be used for planning a modest $8 million increase from the esteemed Innovations in activities and working capital for mar- Dec. 31, 2002. This figure was impact- Government Award, a program of the keting value-added agricultural prod- ed by the bank’s sale of $300 million in Ash Institute for Democratic ucts and for farm-based renewable participations in its direct notes from Governance and Innovation at energy. The maximum amount that associations in November 2003. The Harvard University’s Kennedy School can be awarded is $500,000, and all Texas bank is part of the nationwide of Government. The program is now VAPG funds must be matched by an Farm Credit System, which reported eligible to win $100,000 in what is equal amount of funds from the appli- combined net income of $1.82 billion often referred to as “the Oscars” of cant or a third party. for the year ended Dec. 31, 2003, as government award programs. At press deadline for this magazine, compared with combined net income The Waushara County Department the announcement of fund availability of $1.773 billion for the prior year. of Human Services facilitated develop- was scheduled to be published in late ment of the co-op in 1999 in an effort May the Federal Register, website: ACDI/VOCA’s Deegan resigns to strengthen and expand its home http://www.gpoaccess.gov/fr/index.htm Michael Deegan announced his care workforce by transferring man- l, and on the USDA program website: immediate resignation on April 29 as agement of the service from the county http://www.rurdev.usda.gov/rbs/coops/ president and CEO of ACDI/VOCA.

46 May/June 2004 / Rural Cooperatives Deegan said he plans to pursue other new logo will be used in both trade the Bush administration invested over career opportunities. The and consumer marketing efforts and $6.3 billion in grants, loans and loan ACDI/VOCA board immediately will appear on new point-of-sale mate- guarantees to support the development launched a search for a replacement. rials being developed for the 2004 sea- and/or improvements to rural electric, Don Crane, executive vice president of son. Initially, the logo will be printed telephone and water/wastewater infra- ACDI/VOCA, will carry out the day- with the words “peaches, plums, nec- structure that will help to create or to-day chief executive functions until tarines.” “Eventually, we expect that save an estimated 150,000 jobs. an interim president is appointed. the logo will stand on its own without The loans announced today include During Deegan’s eight-year tenure the need for these tag lines,” 25 distribution projects and three as ACDI/VOCA president, the organi- Richardson said. transmission and generation ventures. zation experienced unprecedented A complete list of the loan recipients growth and success in its development Forum for Dairy Women can be viewed at USDA Rural operations worldwide, Crane noted. slated in Madison, Sept. 26-27 Development’s website at: www.rur- ACDI/VOCA, headquartered in The 2nd International Forum for dev.usda.gov. Washington, D.C., is a private, non- Women in Dairying (IFWD) will be profit organization which promotes held Sept. 26-27 in Madison, Wis. The USDA announces $190 million broad-based economic growth and the forum strives to enrich the lives of glob- in high-speed internet loans development of civil society in emerg- al dairy women by encouraging them to Agriculture Secretary Ann M. ing democracies and developing coun- share challenges and contributions to Veneman in early May announced the tries (see page 37). the industry and to provide a venue to approval of 20 rural broadband and learn, network and be inspired. telecommunication loans totaling New logo adopted for Jackie Pflug, who survived an airline $190 million to expand access to California Tree Fruit terrorist attack, will give the forum’s advanced technology in 19 states. The California Tree Fruit keynote address, sharing how we can The funding is part of the Bush Agreement (CTFA) has approved a become peak performers through our administration’s effort to expand the new logo for use in the marketing of attitude and reaction to change, adver- availability of broadband technology fresh California peaches, plums and sity and challenge. A full program can in rural areas. nectarines. “The new logo is designed be found at www.world-dairy- “President Bush is committed to specifically to promote California expo.com. For a registration packet, ensuring that every household in peaches, plums and nectarines and contact Marlene Schmidt, World America has access to broadband by Dairy Expo visitor services manager, at the year 2007,” said Veneman. “This (608) 224-6455 or mschmidt@wdex- technology is important for families po.com. and businesses to succeed in a global environment.” USDA awards $385 million Veneman announced in January for rural electric expansion 2003 that USDA would expand Agriculture Secretary Ann M. efforts to bring farmers, rural resi- Veneman in March announced 28 rural dents and businesses greater access to electric guaranteed loans totaling near- improved telecommunication tech- ly $385.6 million to expand rural elec- nology through loans and loan guar- tric infrastructure in 16 states. antees to rural telecommunications “Expansion of rural infrastructure is a providers. Funds for the program first step in opening the door for were authorized through the 2002 communicates images of sunshine and expanded rural economic development Farm Bill. To date, over $206 million health that are associated with these and improved quality of life for rural in broadband loans have been fruits,” said CTFA President Blair residents,” said Veneman. “These pro- approved in this program. Richardson. He said the old logo — jects will serve 62,980 future customers, The rural broadband access pro- which depicted a tree illuminated with build 4,300 miles of new line and fund gram provides loans and loan guaran- sun rays — seemed to work better at general system-wide modernization.” tees for the construction, improve- promoting the organization rather Through USDA Rural ment, and acquisition of facilities and than the fruit. Development’s utilities program, loans equipment for broadband service in “First and foremost, CTFA exists to and loan guarantees are made to eligible rural communities. Priority is promote our growers’ fruit and is not finance the construction or replace- given to applications that are propos- an organization that promotes itself,” ment of electric transmission and gen- ing to serve areas where no residential Richardson said. He noted that the eration facilities. In fiscal year 2003, broadband service currently exists. ■

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48 May/June 2004 / Rural Cooperatives