Taking Control: The Tenability of National, Regional, and Local Cooperative Businesses

Almeida, McAdams, Mick: 1

The New England Journal of Cooperative Associations

Taking Control: The Tenability of National, Regional, and LocalCooperative Businesses

Authors: Emerson Almeida, Kenneth Mick, and Ryan Mcadams

Introduction

A disparity of ideas came to each member of our group’s mind

when we thought of a cooperative in relation to economics and

business. Our thoughts initially gravitated towards the belief

that the economic model constituted an irrelevant, impractical,

and outdated form of business, and we each exhibited only a

tenuous understanding of the concept. Economic and business

teachings of the day often stress competitive capitalism to the

detriment of other economic theories; the term cooperative

“remains almost invisible in the textbooks” relating to these

subject areas.1 However, historical evidence points to the

conclusion that cooperative associations shape national,

regional, and local environments in a positive way, and, at the

1 Hill, Roderick. "The Case of the Missing Organizations: Co-operatives in Textbooks." The Journal of Economic Education. 31. no. 3 (2000): 281. http://www.jstor.org/stable/1183098?origin=JSTOR-pdf& (accessed February 22, 2013).

local level, a food cooperative will add onto this tradition by

providing the unique, convenient, and substantive opportunity for

the residents of Amherst to benefit one another.

Cooperatives on a National Scale: Tradition and Success

The International Cooperative Alliance states that, “a

cooperative is an autonomous association of persons united

voluntarily to meet their common economic, social, and cultural

needs…through jointly-owned and democratically-controlled

enterprise.”2 Various types of cooperative associations exist for

a wide variety of purposes, and when compared to traditional

capitalistic business models, they differ markedly. In worker

cooperatives, the employees, not outside investors, determine all

business decisions through the democratic process. More

explicitly, workers decide where the co-op allocates profits, how

many vacation days the association gives, who to conduct business

with, and what geographical areas to expand to. Each worker owns

an equally proportionate share of the business.3

2 International Cooperative Alliance, "Co-operative Definition." Accessed February 22, 2013. http://www.aciamericas.coop/Co-operative-Definition.3 Trott, Adam. University of Notre Dame, "The Story of Collective Copies." Accessed February 22, 2013. (http://www3.nd.edu/~druccio/documents/Trott.pdf)

Worker cooperatives do not own the entire cooperative market

space, though. Consumer and producer cooperatives also constitute

popular associations. Consumer cooperatives, owned by consumers,

allow patrons, who subsequently become shareholders, to purchase

specific items and fulfill certain goals. Meanwhile, producer

cooperatives arise when producers bundle and sell their products

together – usually to remain economically competitive.4 Multi-

stakeholder cooperatives also exist, as producers, consumers,

workers, and communities frequently find it beneficial to team up

with one another to achieve a common goal.5

The founding of a cooperative by members in common often

comes, either implicitly or expressly, with a set of values that

the association will adhere to. These values differ markedly from

those businesses of capitalistic nature, as capitalism inherently

fosters competition. Instead, cooperative businesses lay their

foundation in cooperation and collaboration with those who share

similar goals. Cooperative associations ideally adhere to seven

1.4 Cooperative Development Center at Kent State University, "Solidarity as a Business Model: A Multi-Stakeholder Cooperatives Model." (Accessed February 22, 2013) 7-8.5 Cooperative Development Center at Kent State University, “Solidarity as a Business Model,” 11-12.

key principles: “voluntary and open membership; democratic member

control; member economic participation; autonomy and

independence; education, training and information; cooperation

among cooperatives; [and] concern for community.”6

Benjamin Franklin created the first cooperative association

in America in 1752. After over 250 years this cooperative, the

Philadelphia Contributionship for the Insurance of Houses from

Loss by Fire, still exists today.7 However, “the cooperative as a

modern business structure” came to fruition in 1844.8 Poor

economic and working conditions in Great Britain brought on by

the onslaught of heavy industrialization pushed 28 disenchanted

workers into forming the Rochdale Society for Equitable Pioneers.

The society focused primarily on selling goods to consumers

through the vehicle of a cooperatively owned general store.9

6 Cooperative Development Institute, "International Cooperative Alliance Principles and Values." Accessed February 22, 2013. http://www.cdi.coop/icaprinciples.html.7 National Cooperative Month Planning Committee, "Cooperative Businesses In the United States...A 2005 Snapshot ." Last modified 2005. Accessed February 22, 2013. (http://www.uwcc.wisc.edu/info/stats/uscoopbus05.pdf) 2. 8 Oleson, Brian. University of Manitoba - Department of Agribusiness & Agricultural Economics, "History of Cooperatives." Last modified 1999. Accessed April 10, 2013. http://www.umanitoba.ca/afs/agric_economics/ardi/history.html9 Note 12, supra; OLESON.

The tenability of this business model made its way to the

United States, and by the final decades of the 19th century

farmers began to form producer cooperatives to combat “low

prices, wide marketing margins, high freight charges, and high

interest rates.”10 Cooperatives further flourished with the

country’s entering into the Gilded Age, which brought what many

considered to be the worst evils of capitalism – monopolies,

exploitation, and volatile markets. Middlemen, like those

businesses that purchased agricultural products from farms in

order to process them, squeezed small farmers for profit by

underpaying them for their commodities. Monopolies by big

business made this possible, as it allowed them to corner and

exploit the market.11 By 1900, in an attempt to combat these

unfair practices, “at least 1,223 cooperatives were active in the

United States.”12

10 University of Wisconsin Center for Cooperatives, "Cooperatives in the U.S.." Last modified 2012. Accessed February 23, 2013. http://www.uwcc.wisc.edu/whatisacoop/history/11 Varney, Christine. American Bar Association, "The Capper-Volstead Act, Agricultural Cooperatives, and Antitrust Immunity." Last modified December 2010. Accessed April 10, 2013. http://www.americanbar.org/content/dam/aba/publishing/antitrust_source/Dec10_Varney12_21.authcheckdam.pdf.12 Note 12, supra; OLESON

While farmers attempted to create stability and fairness

through cooperation, their situation only worsened with the

conclusion of World War I. During World War I the federal

government guaranteed high price supports for farmers in an

effort to sustain the war movement. Farmers attempted to take

advantage of these artificially high agricultural prices by

increasing their production output. To do this, farmers purchased

high priced land on credit, which, given the high price supports,

they considered a manageable risk for the expected reward.

Farmers also bought the latest technological equipment on credit

in an attempt to generate more agricultural commodities for

market.13

Congress provided the means for this spending with the

passage of the Federal Farm Loan Act of 1916. The act aimed to

provide farmers with the capital necessary to keep agricultural

development high and to level the playing field for farmers in

obtaining credit and loans.14 The spending, planting, and

13 Morain, Tom. Iowa Public Television, "The Great Depression Begins in the 1920s." Accessed March 6, 2013. http://www.iptv.org/iowapathways/mypath.cfm?ounid=ob_000060.14 Cornell University Library, "THE FEDERAL FARM LOAN ACT." Accessed March 29,2013. http://www.archive.org/stream/cu31924014007326/cu31924014007326_djvu.txt.

harvesting spree greatly benefited the farmer economically during

the time period in which Congress enacted Government assistance,

but not so much after Congress repealed it.15

The Government’s choice to end high price supports in 1920

left many farmers economically devastated. This dramatic shift in

policy left farmers at the mercy of supply and demand economics,

and as a result, many farmers paid dearly for their fiscal

overextension during World War I. Easy and cheap credit came to a

halt, and by the early 1920’s farmers begged banks to ease their

calls on debt collection and to provide greater and less

restrictive loans (at this time banks contained the capital to

acquiesce to the farmers demands but chose not to for economic

reasons).16

The quandary of the farmer worsened as overproduction of

agricultural commodities, which used to be of great benefit to

the farmer, drove agricultural commodity prices down. Many

farmers began defaulting on their mortgage payments, with their

farms thus falling prey to foreclosure. Foreclosure became an

15 Note 5, supra. MORAIN 16 "Farmers and Banks." New York Times, June 7, 1921. http://search.proquest.com/hnpnewyorktimes/docview/98428502/13D1D697338105069F8/805?accountid=14572 (accessed March 29, 2013).

even bitter pill to swallow after low agricultural commodity

prices drove the price of farmland down – many farmers paid a

premium price for the land during the agricultural boom years of

World War I.17

The Government attempted to combat the plight of the farmer

through a system of “self-help.” This self-help came in the form

of the Government’s official encouragement of cooperative

associations; “Presidents Harding, Coolidge, and Hoover all

strongly endorsed the use of agricultural cooperatives” as a way

to combat the negative aspects of the market based economy.18 The

Capper-Volstead Act of 1922 allowed those who joined together in

an agricultural cooperative to bypass United States anti-trust

laws.19 In further efforts to combat the depression of

agricultural commodity prices, Congress passed the Agricultural

Marketing Act of 1929. The act attempted to facilitate an uptick

in agricultural economics by further encouraging cooperative

associations. Specifically, the legislation provided an increased

17 Note 5, supra; MORAIN.18 Note 22, supra; OLESON19 Cornell Law School Legal Information Institute, "7 USC § 291." Accessed April 10, 2013. http://www.law.cornell.edu/uscode/text/7/291.

amount of capital to the countryside through the form of

Government subsidized loans.20

However, the Great Depression marked the cementing of the

cooperative association as a truly successful economic model in

the United States. This success stemmed in large part from the

federal government’s initial participation in aiding cooperatives

through a large increase in aid (introduced in legislation like

the Agricultural Act of 1933). Congress’s newfound vigor provided

for the introduction of agricultural credit unions, agricultural

commodity price supports, favorable agricultural lending

practices, and specially earmarked projects for the countryside

(e.g. infrastructure).21 Cooperatives flourished during the 1930’s

and 1940’s, but the post–World War II period ushered in a more

conservative era, especially during the 1950’s, as the Cold War

nestled firmly into the American psyche.22

While funding for cooperatives decreased post-World War II,

the public’s interest in cooperatives did not wane. The

counterculture of the 1960’s and 1970’s brought with it a new, 20 Cornell Law School Legal Information Institute, "12 USC § 1141e." Accessed April 10, 2013. http://www.law.cornell.edu/uscode/text/12/1141e21 Note 9, Supra; WISCONSISN COOPERATIVES IN THE US.22 Note 10, Supra; WISCONSIN COOPERATIVES IN THE US.

rejuvenated view on this particular economic model. Those

perpetuating the new belief in this system often used radical

language directed against the traditional American way of life;

Abbie Hoffman, author of Steal this Book, detailed the necessity of

cooperatives in “fighting our common oppressor on a community

level.”23 These people helped to usher in a “‘new wave’ of

consumer co-ops,” and, in turn, this new wave helped to disperse

cooperatives from a concentration in the countryside to suburban

and urban areas.24

As of 2009 some 29,000 cooperative associations operated

within the United States. These cooperatives have had an enormous

macroeconomic impact, as they control “more than $3 trillion in

assets, and generate over $500 billion in revenue and $25 billion

in wages.”25 Wages coupled with the value of benefits push

cooperative pay outs to over $75 billion a year.26 Not only do

23 Hoffman, Abbie. Steal this Book, (Pirate Editions, 1971) http://api.ning.com/files/4Xa2- CEC7u86knA5Ok1TwPaFKUN5km1ZQd5vcvJe5kb-mPrytZA*xrp9Fqa2PG*Px4wEcpQadfj3S0ZFVq8pHS-xBs2hUQ-zrg1iDERX0Mo_/HoffmanAbbieStealThisBook.pdf (accessed March 2, 2013), 10.24 Cooperative Development Foundation, "History of Cooperatives." Accessed February 23, 2013. http://www.cdf.coop/history-of-cooperatives/. 25 National Cooperative Business Association, "Co-op Research / Economic Impact." Accessed February 22, 2013. http://www.ncba.coop/ncba/about-co-ops/research-economic-impact.26 Note 15, Supra; NATIONAL COOPERATIVE BUSINESS.

cooperatives provide over two million American jobs,27 but the

American public also holds over 350 million cooperative

memberships.28 Even private corporations, like BJ’s, Sam’s Club,

and Costco, use an economic model based off of the traditional

consumer cooperative; consumers purchase a store membership which

allows them to shop and receive monetary savings (although, these

organizations tweak the system enough to ensure that the

capitalist structure prevails).

The aid provided by the federal government during the 1930’s

allowed for agricultural cooperatives to become major

macroeconomic players. Today, “agriculture co-ops have a gross

business volume of more than $111 billion per year and 2.8

million members.”29 Meanwhile, these 2.8 million members are

spread between roughly 3,000 different farmer cooperative

associations.30 Successful, monolithic co-ops include many well

known brand names, like Ocean Spray, Sunkist, and Florida’s 27 Note 16, Supra; NATIONAL COOPERATIVE BUSINESS.28 University of Wisconsin Center for Cooperatives, "Research on the Economic Impact of Cooperatives: Executive Summary." Accessed February 22, 2013. http://reic.uwcc.wisc.edu/summary/.29 National Cooperative Month Planning Committee, "Cooperative Businesses In the United States...A 2005 Snapshot ." Last modified 2005. Accessed February 22, 2013. (http://www.uwcc.wisc.edu/info/stats/uscoopbus05.pdf) 4. 30 National Council of Farmer Cooperative, "About Co-ops." Last modified 2010.Accessed February 22, 2013. http://www.ncfc.org/about-ncfc/about-co-ops.

Natural Growers.31 Not only do many of these co-ops possess a

recognizable brand name, but many also hold great economic power.

The three largest agricultural cooperatives – CHS Inc, Dairy

Farmers of America, and Land O’Lakes – brought in a whopping $60

billion in revenue in 2011 alone.32

These colossal enterprises exist and thrive while remaining

true to their cooperative roots. Cooperative associations remain

germane on a macroeconomic scale because they allow for

consumers, producers, workers, and communities to unite to assist

one another in a responsible and economically beneficial manner.

History shows that on a macroeconomic scale cooperatives are not

irrelevant and they offer tenable solutions to major

socioeconomic quandaries.

New England Cooperatives: A Long and Proud History

While cooperatives attained great success on the national

scale, the cooperative business model in New England also

31 National Cooperative Month Planning Committee, “Cooperative Businesses In the United States,” 5.32 United States Department of Agriculture, "Top 100 Largest Agriculture Cooperatives." Last modified 2011. Accessed February 22, 2013. http://www.rurdev.usda.gov/SupportDocuments/rdTop100AgCoop2011-Oct2012.pdf.

flourished. Food cooperatives in the region date as far back as

the 1842 and continue today to impact the region greatly. A

strong and vibrant pedigree exists in relation to this particular

business model, as the legacy and tradition on which it rests

benefits the regional community as a whole.

The history of food cooperatives in New England traces back

to the 1840s. One of the earliest cooperative enterprises in the

region, the Brook Farm Community, existed in eastern

Massachusetts from 1842 until 1847.33 Brook Farm Community, a

utopian-based community cooperative, dedicated its mission to

combating inequality. In 1886, Edward W. Bemis published an

article in which he called this particular co-op, “more radical

in its revolt from existing economic conditions than most

cooperative schemes, since it involved the whole social life, as

well as the production and distribution of wealth.”34

The Brook Farm Community contained many prominent members,

most notably, John Orvis of Jamaica Plain, Massachusetts, and

Jonathan Butterfield of Wakefield, Massachusetts. Orvis went on

33 “Edward W. Bemis, “Cooperation in New England,” Publications of the American Economic Association 1, no. 5 (November 1886): 7, accessed March 7, 2013, hnp://www.jstor.org/stable/2485565.34 Bemis, “Cooperation in New England,” 7-8.

to become a national lecturer and organizer of the National

Council of the Sovereigns of Industry, an organization that

attempted to establish large scale consumer co-operatives to

combat the monopolies of businesses. He also became a leading

exponent and advocate for the formation of cooperative

associations in conjunction with the Knights of Labor, another

prominent labor cooperative.35 Butterfield, like Orvis, also

experienced great success in the regional cooperative market. He

eventually rose to become the treasurer of the National Council

of the Sovereigns, a position where he exerted tremendous

influence over the regional movement.36

In 1867, agricultural advocates formed perhaps one of the

most famous national agricultural cooperatives, the Grange.

Headquartered in Washington D.C., the Grange’s spread throughout

much of the United States, especially in the New England area.

Specifically, the Grange attempted to boost “economic

development, education, family endeavors, and legislation

designed to assure a strong and viable Rural America.” 37 This

35 Bemis, “Cooperation in New England,” 8.36 Note 35, supra.37 Massachusetts State Grange, "What is the Grange?." Last modified 2012. Accessed March 11, 2013. http://www.massgrange.org/.

strategy won them many supporters, and from 1872 to 1875 the

Grange experienced a phenomenal growth in membership – in part

due to the financial crisis of 1873.38 While the association’s

growth tapered during the late 19th and early 20th centuries, the

agricultural plight following World War I dramatically increased

the association’s membership. 39

Cooperatives continued to develop and adapt, and the post-

World War I period marked a renewed interest and growth in New

England cooperative associations. By the late 1910s, agricultural

producers founded two of the region’s most successful

cooperatives: the New England Milk Producers Association, founded

in 1916, and Cabot Farmers Cooperative Creamery, founded in

1919.40 Each of these cooperatives grew dramatically throughout

the 20th century, and by 1980, the New England Milk Producers

Association transformed into the monolithic Agri-Mark

38 Florence J. Foster, “The Grange and the Co-Operative Enterprises in New England,” Annals of the American Academy of Political and Social Science 4, (March 1894): 103,accessed March 7, 2013, hup://www.jstor.org/stable/1008703.39 Charles P. Gilliam, “A Short History of the Order of Patrons of Husbandry The National Grange,” Cannon Grange, archived on October 25, 2009, http://webcitation.org/query?url=http://www.geocities.com/cannongrange/cannon_nationalhistory.html&date=2009-10-25+16:52:46.40 VSECU e-News, “Highlighting Vermont Cooperatives,” Vermont State Employees Credit Union, last modified February 15, 2013, https://www.vsecu.com/articles/highlighting-vermont-cooperatives.

Cooperative.41 Only a decade and a half later, Agri-Mark brought

Cabot Farmers Creamery under its umbrella – following the

creamery’s experiencing of an overall decline in membership.42

Agri-Mark continued to grow throughout the Northeast, though, as

it acquired assets from the McCadam Cheese Cooperative, situated

in upstate New York, in 2003.43 Today, Cabot Creamery, a

subsidiary of Agri-Mark, exercises a tremendous impact on the

regional community, as the cooperative operates through a

collective partnership of over 1,200 different farms.44

In addition to dairy farmer producers banding together

during the World War I years, cranberry growers in eastern

Massachusetts found it advantageous to form Ocean Spray, a

cranberry producer cooperative.45 Originally founded in 1930 by

three cranberry growers in Hanson, Massachusetts, the Ocean Spray

cooperative tackled tough economic difficulties through

innovative business practices. Edward Gelsthorpe, a major player

41 “Agri-Mark Home Page!”42 “Cabot Cheese,” Agri-Mark, accessed March 11, 2013, http://www.agrimark.net/public/cabotcheese.php.43 “Agri-Mark Home Page!”44 “Cabot’s Cooperative Heritage,” Cabot Cheese Coop, accessed March 11, 2013, http://www.cabotcheese.coop/pages/about_us/.45 “Who We Are - Heritage - Our History,” Ocean Spray, accessed March 7, 2013,http://www.oceanspray.com/Who-We-Are/Heritage/Our-History.aspx.

in Ocean Spray’s increased products’ prominence during the mid

20th century, introduced Cranapple juice, frozen orange-cranberry

juice, cranberry-orange relish, and alcoholic drinks like the

Cape Codder and Harpoon cocktail to boost economic output.46

Ocean Spray has had a tremendous impact on the New England

region, as it remains the largest cranberry producing company in

the world.47 Currently, the cooperative contains over 600 member

growers, and in the 2012 fiscal year it generated net sales of

$1.66 billion.48 In addition, the cranberry cooperative is one of

the largest and most successful cooperatives in the world.49

These particular regional cooperatives grew to become

national success stories, however, many less prominent

cooperatives served the same function, just on a much smaller

scale. In 1935 Adamant, Vermont gained a consumer co-op – a

46 William Grimes, “Edward Gelsthorpe, Master Marketer, Dies at 88,” The New York Times, last modified September 27, 2009, http://www.nytimes.com/2009/09/28/business/28gelsthorpe.html?_r=0.47 Liz Hayes, “Expansion Makes Rapids Ocean Spray Largest Cranberry Processer in World,” Wsaw.com, last modified September 23, 2008, http://www.wsaw.com/home/headlines/29639319.html.48 Business Wire, “Ocean Spray Announces 2012 Financial Results,” Business Wire, last modified November 19, 2012, http://www.businesswire.com/news/home/20121119005898/en/Ocean-Spray-Announces-2012-Financial-Results.49 Erbin Crowell, “Funding New England’s Cooperative Movement,” Communities & Banking, (Fall 2008): 2, accessed March 11, 2013, http://www.bos.frb.org/commdev/c&b/2008/fall/Crowell_Cooperative_Fund_New_England.pdf

general store catering to the town’s consumption needs.50 With a

simple beginning, a town pastor joined with his fellow neighbors

during the winter of 1934-1935 to sell local produce to town

members to keep Adamant’s food supply fresh and local.51

While the inter-war period brought reinvigoration to the

cooperative movement, this same passion reignited following the

late 1960’s. Attempting to create an alternative to the economic

and business systems of the time, many energized optimists

founded a variety of co-ops during this time period.52 The

natural food cooperative Hunger Mountain came into existence in

Vermont during the late 1960s.53 Robert E. Weir explained in

Workers in America: A Historical Encyclopedia that not every co-op attained

success – many suffered from an inability to attract capital and

compete with larger stores.54 The initial countercultural

idealism of the co-op movement eventually gave way to business

realism, as in the late 1970s into the 1980s co-operatives began

50 VSECU c-News.51 “Some History of Adamant and the Adamant Co-op,” Adamant Co-op. accessed March 7. 2013, http://www.adamantcoop.org/history.php.52 Maria McGrath, “‘That’s Capitalism, Not a Co-op’: Countercultural Idealism and Business Realism in 1970s U.S. Food Co-ops,” Business and Economic History Online. Volume 2 (2004), 1-2, 6.53 VSECU e-News.54 Robert E. Weir, Workers in America: A Historical Encyclopedia, (Santa Barbara: ABC-CLIO,2013), 179.

adopting more conventional business models in order to survive.55

By 1975, the Cooperative Fund of New England, initially a

collective of idealistic young cooperative organizers, an

accountant, and a couple of investors, sprang up to aid

cooperatives in need of funding and capital assistance.56

Proponents for funding of co-ops expanded on this idea during the

1990s with the forming of the Cooperative Development Institute;

designed “to increase economic opportunities and benefits for

people in the Northeast by fostering the growth and success of

all types of cooperative enterprises.”57

The evolution of the cooperative continued to follow various

paths, and the 1980s brought on the Community Supported

Agriculture Movement; the general idea being that investors,

usually members of the community, supported local farms

monetarily in exchange for produce.58 Two notable CSAs located in

Berkshire County sprang up in 1985, the CSA Garden at Great

55 McGrath, “‘That’s Capitalism,’” 4-5, 7-8.56 “History and Mission,” Cooperative Fund of New England, accessed March 7, 2013, http://www.cooperativefund.org/about-us/history-and-mission.57 “About Us,” Cooperative Development Institute, accessed March 11, 2013, http://www.cdi.coop/cdihistory.html.58 Steve McFadden, “Part I: Community Farms in the 21st Century: Poised for Another Wave of Growth?” Rodale Institute, accessed March 11, 2013, http://newfarm.rodaleinstitute.org/features/0104/csa-history/part1.shtml.

Barrington and The Temple-Wilton Community Farm. As these co-ops

grew, CSA Garden at Great Barrington entered into a lease with

Robyn Van En of the Indian Line Farm in 1986. The CSA splintered

during the early 1990s, and Van En stayed with the Indian Line

Farm. In 1992, Van En formed CSA North America (CSANA), a

nonprofit clearinghouse to support CSA development.59 Van En died

of asthma in 1997, forcing her son to sell the farm. The farmers

were unable to buy the farm, but, with the help of the E. F.

Schumacher Society, they partnered with a community land trust

and The Nature Conservancy to buy Indian Line Farm in 1999. Susan

Witt, one of the CSA’s founders and director of the Schumacher

Society, raved about this partnership, as consumers “actively

took responsibility to hold farmland open and to make that land

available and affordable for farmers over a long term.”60

According to Witt, this example set down some basic ideas which

other co-operatives should seriously consider.61

A long, proud, and successful history exists of cooperative

associations in New England, and many of those cooperatives

59 Note 58, Supra.60 Note 59, Supra.61 Note 60, Supra.

founded decades ago continue to thrive today. Ocean Spray

maintains a billion-dollar presence world-wide, and Cabot

Creamery, a subsidiary of Agri-Mark, contains some 1,200

regional farm partnerships – all while maintaining a commitment

to core cooperative principles. The Grange continues its strong

activity throughout the region, and the Adamant and Hunger

Mountain co-ops remain successful in meeting the needs of their

communities; Hunger Mountain generates roughly $16 million

annually and maintains a membership of over 6,000.62 A local food

cooperative in Amherst can easily establish itself as one of the

latest members of this long and historic New England legacy of

benefiting consumers, producers, and the community.

Keeping it Local: The Benefits of a New Consumer Cooperative

Different types of businesses, operating under either a

capitalistic or cooperative model, exist extensively at the local

level in Western Massachusetts. Over the border and just a few

short miles north from the center of Amherst stand the Hadley

62 “About Us > Our Story,” Hunger Mountain Coop, http://hungermountain.coop/Default.aspx?tabid=99; “About Us,” Hunger Mountain Coop, http://hungermountain.coop/Default.aspx?tabid=63; “Our History,” Brattleboro Food Coop, accessed March 11, 2013.

shopping plazas, and within these plazas, a handful of grocery

stores. Big Y, Stop-and-Shop, Trader Joes, and Whole Foods Market

make up just a few of the large supermarkets that dot Route Nine.

Although a new food cooperative would face stiff competition from

these large supermarkets, Amherst residents have shown a great

desire to purchase from local businesses to benefit the local

community.

Many cooperative associations already call Amherst home.

Food for Thought Books and Collective Copies, each a cooperative

business, offer great benefits to the local community. A

bookstore established as a not-for-profit workers cooperative 37

years ago, Food For Thought Books donates all of its profit back

to the community. As their website states, their independent

bookstore status “means the workers are the owners of this store

and…the money you spend here stays in this community & helps keep

it a thriving & enjoyable place to live.”63 Collective Copies,

established in 1983, also stresses the importance of community

outreach; their website states that, “we return 10% of our

63 "What We Do." Food for Thought Books Collective. N.p., n.d. Web. 10 Mar. 2013.

profits to the community that sustains us.”64 A food cooperative

makes for a great business to follow in the footsteps of those

already rooted in town.

According to the National Cooperative Business Association

(NCBA), cooperatives “are motivated not by profit, but by

service-to meet their members’ needs.” 65 Unlike their potential

capitalist competitors, an Amherst food cooperative would be run

by and for the people – based largely on the wants, needs, and

goals of the community. The town of Amherst deserves such a

business within its borders, despite large market chains

dominating the surrounding towns.

Whole Foods Market and Trader Joe’s represent two of the

most successful supermarkets in the Hadley area. They both

possess a devout following and remain exceptionally successful in

selling their brands. Annually listed on Fortune Magazine’s ‘100

Best Companies to Work For’, Whole Foods Market runs a lucrative

business model. In 1980, the first Whole Foods opened its doors

in Austin, Texas after four local business owners joined together

64 "Collective Copies-Mission." Collective Copies-Mission. N.p., n.d. Web. 10 Mar. 2013.65 "National Cooperative Business Association." About Co-ops -. N.p., n.d. Web. 03Mar. 2013.

to create a natural supermarket for the city.66 Only four years

later, Whole Foods began it expansion – one that still continues

today. In 1992 Whole Foods purchased Bread and Circus, which, at

that time, reigned as the largest natural grocer on the east

coast.67 Headquartered in Brookline, MA, Bread and Circus

operated a handful of stores throughout the state, including the

location where Whole Foods stands today in Hadley.

Whole Foods’ natural food selection, appealing and inviting

storefronts, and cooperation with local farmers make it an

appealing business in any town or city. However, Whole Foods

experiences stiff competition in the Hadley area from another

attractive supermarket, Trader Joe’s. Although Trader Joe’s small

town feel can leave many thinking that the store only conducts

small town business, Trader Joe’s enjoys the right to brag about

profitability. In 2009 the company’s sales totaled nearly $8

billion, on par with those of Whole Foods. Due to their small

stores, sales equaled $1,750 for every square foot, double what

Whole Foods managed.68 Many welcome these stores into their 66 "Whole Foods Market History | Whole Foods Market." Whole Foods Market History | Whole Foods Market. N.p., n.d. Web. 04 Mar. 2013.67 Note 66, supra.68 Kowitt, Beth. "Inside the Secret World of Trader Joe's." CNNMoney. Cable News Network, 23 Aug. 2010. Web. 04 Mar. 2013.

communities because of their healthful, quirky and immense food

selection, as well as their high-quality treatment of employees.

So how could one possibly complain about these two grocery

stores with near perfect records? While both offer great products

as well as an enjoyable shopping experience, at the end of the

day both conduct their business as large, capitalist

corporations. The money being spent at these supermarkets does

not go back into the local community, but rather its flows into

the pockets of business executives in other states. Creating a

food cooperative in Amherst undeniably will allow Amherst

residents the chance to support local families and put cash into

the pockets of people they know, instead of in the hands of Wall

Street traders.

Specifically, a food market cooperative in Amherst will

improve farm management in the community, create a more informed

and politically active citizenry, and offer consumers greater

benefits. This sort of cooperative in Amherst will result in an

enormous amount of cooperation amongst managers of the co-op and

various members of the community – specifically in relation to

community-supported agriculture supplying the food cooperative.

This community collaboration in relation to community

support agriculture provides for dual benefits. Payment during

the planting period provides a farmer with the funds necessary to

start the growing season, while consumers, in time, get to enjoy

fresh foods and products. In Brazil, similar models of

collaboration exist between farmers and shareholders – the system

provided for a jaw dropping 5.4 percent of total GDP in 2009.69

This direct link between business owner and business supplier

allows the farmer to tailor crops and livestock to the

community’s goals and needs.

An agriculturally based cooperative in Amherst also offers

benefits to the local political scene. With business decisions

directly affecting the cooperative, a number of shareholders

(community residents) will become involved in creating local

policy. Lastly, cooperatives offer a number of benefits to

consumers. As explained by the United States Department of

Agriculture in Cooperative Benefits and Limitations, cooperatives benefit

consumers in the areas of quality products, varied services, new

69 "FAO Media Centre: Agricultural Cooperatives Are Key to Reducing Hunger andPoverty." FAO Media Centre: Agricultural Cooperatives Are Key to Reducing Hunger and Poverty. N.p., n.d. Web. 06 Mar. 2013.

products and processes, general costs, and in general local

welfare.

According to Liz Bailey of the National Cooperative

Business Association, “Two million jobs are generated each year

as a direct result of cooperatives, which illustrates the

incredible impact that these organizations have on local

economies."70 Amherst is no stranger to these types of

businesses, as Food for Thought Books and Collective Copies

demonstrate cooperatives offer tenable solutions for local

community needs. Should an agricultural cooperative open shop in

Amherst, it will find a welcoming community ready to support its

fellow residents.

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Taking Control: The Tenability of National, Regional, and Local Cooperative Businesses

Documents

Transcript of Taking Control: The Tenability of National, Regional, and Local Cooperative Businesses

OPTIMIZING PROCEDURALLY GENERATED COOPERATIVE ...

Exploring the character of rural businesses

Helping business owners manage their businesses profitably ...

Family businesses - make planning a priority

Cooperative/ Collaborative Learning - MDPI

The welfare economics of cooperative and non-Cooperative fiscal policy

TAKING PEOPLE WITH YOU

Value Propositions for Small Fashion Businesses - MDPI

TOP 100ARAB FAMILY BUSINESSES

INSTITUTE ON COOPERATIVE EDUCATION

Taking Responsibility - B. Braun

Distributed cooperative caching

CRAIGIlEAD ELECTRIC COOPERATIVE ... - APSC

Strategic thinking in family businesses

Consolidating Unorganised Retail Businesses through Digital ...

Fairfield Businesses Over the Years

DISRUPTING ILLICIT MASSAGE BUSINESSES AND HUMAN ...

Taking an elitist stance

COOPERATIVE - Agricam

Water Softeners for businesses - RS Components