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Ride sharing: equipment- and labor-sharing co-ops can help farmers save on rising costs.

"We're talking about a new look at a very old idea," says Frayne Olson of the Iowa Alliance for Cooperative Business Development at Iowa State University. "Sharing machinery and labor has been around a long time."

Given the rising profitability of growing most commodity crops during the past couple of years, one might think Iowa farmers would have little interest in learning how to set up micro-cooperatives or partnerships for sharing and purchasing equipment and labor.

Think again.

While many farm sectors are currently doing quite well, that picture can change quickly, Olson notes. As such, smart farmers look for every possible way to sustain their success in good times and bad.

The equipment Olson is talking about isn't an old, saddle-seat tractor with a bunch of attachments. Farmers seeking to expand or upgrade operations today are often looking at combines, sprayers and row-crop planters. These are costly, big-ticket items. A new combine and headers, for example, can cost upward of $250,000. If two, three or more farmers can share a piece of equipment such as this, they can save a lot of dollars.

Learning to work together

"Farming is not just a one-man show any more," says Olson. "And farm labor, especially skilled labor, is hard to come by." Justifying the purchase cost of a major piece of farm equipment also creates the need to coordinate supporting activities to make full use of a machine's time in the field. Sharing the workload among partners can result in significant gains in efficiency. One farmer may specialize in driving the combine while others may haul the crop to market or a storage facility.

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Hammering out the actual agreements between partners can be a daunting task, however. That's why the Iowa Alliance created a workshop to introduce interested producers to the concept of shared-equipment and shared-labor co-ops, as well as other types of "sharing" partnerships.

The first thing workshop participants do is review a series of case studies the Alliance has compiled. These studies focus on groups of producers who have formed, or tried to form, similar associations. They give a perspective on what others have done and provide a good starting point for discussion.

"Farmers are really concerned about the nuts and bolts stuff," Olson says. "So we hit them right away with the question: How do you divide the costs? We give them some spread sheets and other information, even offer some accounting procedures to help them make it more equitable."

But that's only a start. Participants are then asked to describe their farm operations, their skill sets and work habits. They also identify their own personality traits and what they are looking for in an ideal partner.

Some farmers want a partner with similar skills and needs, figuring that will make for a smoother working relationship and easier communications. Others prefer to find someone with different skills that will complement and expand on their own. Both types of partnership/co-ops have value. Being able to arrange a mutually agreeable work schedule is, of course, also crucial.

Expanding the pie

At this point in the workshop, the topic of business structure is introduced. There are many ways to draft an operating agreement, each with potential advantages and disadvantages. Partners or co-op members may decide to share only one piece of equipment and agree only to share use and costs of that one machine. Others may want to share labor or share multiple pieces of equipment. Farmers can also form a co-op or partnership to purchase equipment and inputs--even to jointly market their crops (if they are not already members of a marketing cooperative).

Once prospective partners have gone through the process of identifying what they want from one another and what each has to offer, Olson says they should have a pretty good idea about whether they want to work together.

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The important thing for people to take away from the workshop, Olson emphasizes, is the recognition that they can work together if they are willing to look at equipment- and labor-sharing realistically and remain somewhat flexible in planning day-to-day activities. They also need to clearly define what it is they can do together better than they can do individually.

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"Our whole objective is to make the pie bigger," Olson concludes.

To learn more about the Iowa Alliance, visit: www.extension.iastate.edu/coops. For more information on the workshops, visit: www.machinerysharing.info.

Editor's note: Livingston is a Maine-based writer, editor, marketing consultant and community organizer for cooperative development.

Jane Livingston

Cooperation Works!

New Orleans group attends co-op development training

Six community developers from New Orleans were among the 26 professionals enrolled in the fall session of "The Art and Science of Cooperative Business Development," a five-day training program conducted by CooperationWorks! The New Orleans contingent was experienced in conventional business assistance but was unfamiliar with the co-op business model. In light of the enormous rebuilding needs that still exist in their home city, they were awarded scholarships by the Cooperative Development Foundation and CooperationWorks!

"By working together through cooperative ventures, residents of the Gulf region will have a much stronger voice in rebuilding their communities and their lives," says Audrey Malan of CooperationWorks!

The Mississippi Center for Cooperative Development (part of the Mississippi Association of Cooperatives) is helping a New Orleans nursing home's employees create a worker cooperative to offer laundry, cleaning, food preparation and other services to elderly residents of Saint Margaret's Daughters' Nursing Home, located in a former hospital in the city's Lower Ninth Ward, and other local people in need of assistance.

To apply for the upcoming spring 2008 training, call 1-800-6007682 or e-mail info@cooperationworks.coop.
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Title Annotation:CO-OP DEVELOPMENT ACTION
Author:Livingston, Jane
Publication:Rural Cooperatives
Date:Mar 1, 2008
Words:949
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