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Co-ops = community development: cooperative developers share ideas in Minneapolis.

The significant role cooperatives are playing in community revival and development was the focus of a conference in Minneapolis in November, appropriately titled "Cooperatives = Community Development." The meeting was sponsored by CoMinnesota, a "networking group" formed in 2011 to share ideas among Minnesota's cooperatives and community developers.

It was one of three co-op conferences held the same week in Minneapolis. The others were the annual Farmer Cooperatives Conference (see page 10), sponsored by the University of Wisconsin, and NCERA-210, sponsored annually by the Land Grant University Extension system to present the findings of the latest research on cooperatives (http://ncera.

The CoMinnesota conference, the focus of this article, was held at the headquarters of Thrivent Financial, a fraternal group that originally developed to meet insurance needs of Lutherans. Participants came from a cross-sector of cooperatives, USDA Rural Development and staff from four statewide or regional cooperative development centers that participate in USDA's Rural Cooperative Development Grant (RCDG) program.

Understanding co-op heritage

Chris Kopka, a law professor and vice president of Thrivent Financial, opened the conference by reminding the audience of the importance of understanding our nation's cooperative heritage, including the reasons why numerous farmer cooperatives were formed during the late 19th century, a time when farmers were struggling to gain the marketing power and affordable supplies necessary to survive. These early co-ops established the traditions of education and self-help, which would also be embraced by future generations of cooperatives.

In his keynote address, Mark Ritchie, Minnesota secretary of state, provided an overview of the importance of cooperatives to the state's economy, as well as the benefits of additional security (such as reliable markets, or the availability of vital supplies) and unique services that co-op members receive. He also discussed the potential for sustaining many of the family businesses of retiring baby boomers through transitioning businesses to worker ownership.

Cooperative "basics" were discussed by Kevin Edberg of Cooperative Development Services, and Margaret Bau, co-op development specialist with USDA-Rural Development's Wisconsin state office. Bau discussed the essentials of cooperative ownership, including the importance of local ownership by members based on their use of co-op services. This means that patronage dividends and member equity are distributed to local residents; hence, this source of income stays in the community.

Roundtables discuss key co-op topics

The conference luncheon featured roundtable discussions led by experts in various co-op sectors. At the USDA Rural Development table, the discussion focused on USDA's Rural Economic Development Loan and Grant (REDLG) program. Mike Murtaugh from Freeborn-Mower Coop Services, a rural electric cooperative headquartered in Albert Lea, Minn., explained its re-lending activity under the program to promote local businesses. The workings of the REDLG program were further elaborated on by Cheryl Seanoa and Naomi Lenz from the Minnesota office of USDA Rural Development.

The afternoon sessions featured seven workshops on various cooperative topics. Warren Kramer of the Northcountry Cooperative Foundation (NCF), a participant in USDA's RCDG program, discussed the development of manufactured home park cooperatives. By helping home owners to establish cooperative ownership and control of their land, NCF is contributing to the residents' financial security and community well-being. Some of these co-ops have been formed in response to park owners announcing plans to sell their land to developers, which would have forced the eviction of residents.

Janssen Hang, an organizer with the Hmong American Farmers Association, and John Flory, director with the Latino Economic Development Center (LEDC), discussed the challenges for immigrant farmers in obtaining access to land. Many of these farmers operate with "insecure" or unfavorable land-leasing arrangements, or find themselves unable to transition from farm workers to owners.

The speakers cited progress in farm ownership and access to farmer markets in urban areas. During the past two years, LEDC has participated in the RCDG program to increase its level of assistance to both Hmong and Latino farmers.

A workshop on how to finance development projects looked at the issues facing housing, business and consumer cooperatives. Christina Jennings, executive director of the Northcountry Cooperative Development Fund, described the nuts and bolts of evaluating and underwriting co-op projects. The discussion also covered sources of financing, including opportunities for partnering with various lending institutions, including USDA Rural Development.

The conversion of businesses from sole proprietorships to ownership by employees is gaining increased attention nationwide. Margaret Lund, a Minnesota-based cooperative developer, gave a presentation on Terra Firma Building & Remodeling. Marty Ruddy, who started the business, and another co-op employee also participated in the presentation. While most conversions to co-ops are pursued to maintain the business and distribute a share of its value to retiring owners who had previously operated as sole proprietors, this case was unique.

Ruddy built the business and initiated the conversion to a worker coop, for which he plans to continue working for many more years as a worker-member. His motivation for transitioning the business to a worker-owned co-op, Ruddy explained, was based on his experience of collaborating with his employees in planning and making decisions. While he prospered as sole owner, he believes the best years are ahead for Terra Firma Building & Remodeling in operating as a worker cooperative.

The CoMinnesota web page includes a video of the conference, at: http://

By Bruce J. Reynolds, Economist

Cooperative Programs

USDA Rural Development
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Author:Reynolds, Bruce J.
Publication:Rural Cooperatives
Geographic Code:1U4MN
Date:Jan 1, 2014
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