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New hybrid on great plains: increased consumer access, education paying off for local producers & shoppers.


In 2004, the Food Processing Center (FPC) at the University of Nebraska was researching ways to improve the profitability of small farmers in the region. Its producer-driven research showed that farmers wanted better ways to distribute and market their food locally. At the same time, consumers were saying they had a hard time finding enough locally produced food.

In a survey of existing producer-consumer linkages around the country, the FPC came across the Oklahoma Food Coop. It had many of the attributes the Nebraskans were looking for, including strong leadership. They invited the co op's dynamic president, Bob Waldron, to speak at the annual banquet of the Nebraska Sustainable Agriculture Society. The event was attended by staff of the Nebraska Cooperative Development Center (NCDC), which has joined FPC in supporting the Nebraska effort.

How the hybrid model works

The Oklahoma Food Co-op is owned by its members, as are all food co-ops, but it is unusual in that it has both vendors (producers) and customers (consumers) as members. It's also different in that it has no storefront or market stall. Instead, the co-op maintains a "virtual marketplace" on a Web site where vendor-members each month post their available products.

These vendor-members set their own prices and fill orders placed on-line by customer-members during a week-long ordering window. Deliveries are made to a central drop-off site and sorted so that customers pick up a single order and pay a single invoice.

As the Nebraska group discovered, there are other benefits to the on-line hybrid co-op model. Vendors--farmers, ranchers and value-added processors, such as bakers--also post their methods of production, product details and other important information for consumers on the Web site.

Educating customers about their food is a priority for many producers. Now, the co-op's member-customers have easier access to local food and information about it.

The Nebraska co-op was launched quietly during the midst of the summer growing season of 2006. The plan was to "go slow," feeling its way

forward during the first year. By May 2007, the co-op had grown to around 120 members--including about 24 producers. By August, the membership had climbed to 171, including 33 producers, with more new members joining every week.

Developer's role

"They really took the ball and ran with it," says FPC's Mark Hutchison about the proactive role taken by NCDC, which also awarded the co-op a small grant to cover legal fees as the innovative, hybrid-ownership model was hammered out. In addition, NCDC helped the co-op procure a liability insurance plan for producer members--a big draw for small-scale farmers and ranchers who want to sell to institutional buyers, such as the university.


Co-op Vice President Libby Broekemeier (also one of the co-op's most active consumer-members) says, "Having some resources lined up--the planning and development grant and the funding for legal advice--and just having those folks with us--was a big help. It gave us the sense that we'd have the money and other resources we needed to take the next step."

Broekemeier, a professional volunteer coordinator with prior experience in food co-op marketing, has (like the other 10 board members) generously shared her expertise with her co-op. She organizes the monthly Delivery Days to meet the expectations of both producers and consumers, and to make sure volunteers have a good time working together.

"A real key to the co-op's success," says NCDC's Cranford, "is that it addresses distribution. By pooling their resources and getting all the product together at once in the same place, producers are leveraging their valuable time." Some farmers and ranchers even organized themselves so that only a few drivers have to make the delivery run each month.

Volunteers with vision

Although the co-op depends on a few volunteers to sort each month's orders at the two drop-off sites, Hutchison notes that farmers already put in longer hours than most people. By becoming member-owners of the cooperative, they reallocate some of those hours in order to better move their product.

This strategy seems to be working. Not only is the membership growing, the co-op is attracting some pretty hefty new members, such as the University of Nebraska at Lincoln, where the whole idea for the hybrid co-op took root.

"The university can have 1,000 seatings at one meal," says NCDC's Elaine Cranford, who has been involved with the co-op since the first meeting in 2004. "That's a lot of food. Now it's at a point where we need to develop strategies for serving the wholesale markets." Her use of "we" is appropriate, because Cranford is rapidly becoming one of the most knowledgeable people in the region regarding sustainable, local food systems and linking producers to consumers.

Broekemeier says people who aren't even co-op members have volunteered to help it succeed. "Their incentive is to help create a new system that increases accessibility to local foods and provides farmers with an outlet for marketing. It's a community-based effort instead of looking at big corporate conglomerates as the guys we want to have taking care of our food needs. We'd rather do it ourselves."

CooperationWorks! draws top names to training program

Cooperation Works!, the national co-op of cooperative development centers, has recruited some highly regarded instructors to the faculty of its popular training program: "The Art and Science of Cooperative Development." The program consists of two intensive five-day sessions.

In September, James Baarda, an agricultural economist with USDA Rural Development's Cooperative Programs, and long-time co-op developer Gerald Ely, who served as director of USDA's Cooperative Development Division from 1990 to 1995, joined other co-op leaders to inform and instruct participants in the second session of the 2007 program.

Topics included co-op legal and tax matters, finance and capitalization strategies, feasibility and financial analyses, governance and management issues, conflict resolution and developing stakeholder capacity. CooperationWorks!' curriculum combines case studies, site tours, small group work and presentations.

The spring session of the 2008 program will be held in Madison, Wisc. For more information, contact: Audrey Malan at: or (307) 655-9162.

By Jane Livingston,
COPYRIGHT 2007 U.S. Department of Agriculture, Rural Business - Cooperative Service
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2007 Gale, Cengage Learning. All rights reserved.

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Author:Livingston, Jane
Publication:Rural Cooperatives
Date:Sep 1, 2007
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