Farming Magazine - July, 2014

COLUMNS

New England Farmers Union: Supporting Producer Co-ops Helps Farmers Thrive

By Barbara Patterson and Sarah Andrysiak

The North Country Farmers Co-op (NCFC) is a producer co-op that supplies local fruit and vegetables, meats, breads and other locally produced items to customers in the North Country of New Hampshire and the Northeast Kingdom of Vermont. Formed in 2013, its goals are to enable its small-farm members to sell to markets otherwise out of reach, reduce competition among farmers, and meet an increasing demand for local food.

So far, the model has proven successful. The NCFC includes over 20 farms and two bakers. The co-op serves restaurants, hotels, hospitals and 11 schools. It is actively adding farms and products and enjoys support from the community. Participating in the co-op provides its producers with expanded markets and more stable prices.

The impetus to form the NCFC came from Julie Moran, who moved to Colebrook, New Hampshire, in 2007. Familiar with the state's robust agricultural diversity and prioritization of local foods, Moran expected to find plenty of regionally sourced, farm-fresh food. She soon learned, however, that little local food was available, sales failed to meet farmer expectations, and farms were in direct competition with one another, ultimately driving down prices.

Moran began working with the North Country Resource Conservation and Development (RC&D) Area Council to market and aggregate farm foods, develop farm business plans, and grow the local farms and their markets. Three years later, Moran and the North Country RC&D had created an efficient ordering and delivery system, built up new markets, and added additional funding through philanthropic and government grants.

When North Country farmers decided they wanted to market their agricultural products collectively, they explored several business models. After much deliberation, the group decided a co-op would provide the best tax benefits, opportunities for funding, and the flexibility and fluidity they required to easily add and remove members year after year.

Throughout New England, producers are coming together to form co-ops like the NCFC. Co-ops are playing an important role in rebuilding local and regional food systems. They are enabling family farmers and fishers to work collectively to aggregate and market their goods, buy goods and services, access equipment and land, and add value to their crops. By working together, small producers can take advantage of the benefits of scale without giving up local ownership and control, empowering them to compete more effectively in the marketplace. As member-owned enterprises, co-ops are rooted in the communities they serve and create an economic infrastructure that spans generations.

Co-op development is central to the mission of the National Farmers Union (NFU). Throughout its 112-year existence, the NFU has been a watchdog for producers in the marketplace. In its earliest years, the NFU worked to support rural economies, strengthen farm viability, and correct market failures or imperfections by creating local co-op associations. At that time, the focus was in the Great Plains with grain elevators and in the South with cotton gins. Wherever the NFU was active, its members founded purchasing and supply co-ops for the benefit of producers and their communities. As they succeeded at the local level, the need arose to gain market power to compete with businesses and corporations further up the food chain. The result was the emergence of regional co-ops that were able to maintain and enhance farmers' power in the marketplace.

The New England Farmers Union (NEFU), the newest chapter of the NFU, is likewise active in supporting co-op enterprises. In New England, farmers and fishers tend to be family operators with limited resources. These producers are served by successful marketing co-ops, as well as purchasing, distribution and equipment co-ops, and collaborations between producer co-ops and co-ops in other sectors (such as retail food, energy, financial and worker-owned co-ops). Today there are additional opportunities for co-ops to help farmers and fishers who are trying to increase production and distribution to meet institutional food demands.

Earlier this year, the NEFU convened co-op leaders in Vermont to discuss the opportunities and obstacles for co-ops in New England. The NEFU also surveyed producers and consumers to assess co-op awareness and identify what farmers need to form a co-op or nurture an existing cooperative business. The NEFU is also working with retail food co-ops, whose adherence to cooperative principles and support for farmers help create the girding of our local and regional food system.

The NEFU recently completed a manual (http://bit.ly/1qm140S) to help producers in our region form co-ops. The NEFU has added cooperative expertise to its staff and compiled resources that can provide assistance to newly formed and growing producer co-ops. Based on our experience and survey results, we have found that one of the challenges for co-ops is accessing experts (lawyers, accountants, etc.) who understand the co-op structure.

Co-op development assistance is in high demand. Forming a co-op is often challenging, as Moran and the North Country farmers discovered. Moran reported that the NCFC used both local and regional technical assistance providers, with mixed results. It took several years for the co-op to officially form, and the learning curve was steep. The NCFC faced an additional challenge: The co-op was started by a passionate organizer and not by the farmers themselves. Moran had to convince farmers that the co-op was worth pursuing.

Launching can be difficult, and co-ops face plenty of growing pains. For the NCFC, its members are small farms and new businesses; forecasting and meeting demand will be difficult. Average sales through the co-op by members were just over $2,000 in 2013. The growers are learning about and experiencing the challenges of selling wholesale as opposed to selling directly to consumers. Although wholesale markets provide a great opportunity for sales, they present unique challenges: Inconsistent follow-through on early season commitments by wholesale buyers has created problems for the co-op, including unsold product at the height of production.

To ensure constructive growth, the NCFC worked with Ned Porter of the NEFU to review its goals at the end of 2013. Together they identified opportunities for improved sales through value-added items, such as peeled and deseeded butternut squash, snipped green beans and cheese. The co-op also plans on improving its forecasting techniques by conservatively estimating for weather variations, planting serial crops, using season extension techniques, and growing items with higher demand. In spite of the challenges so far, the NCFC is optimistic about the future for the co-op and its members.

This is an exciting time for the co-op movement, particularly for New England's agricultural, fishery and food co-ops. "Despite a difficult economy, America's agricultural co-ops have reported record growth over the past few years, as have other types of cooperatives," said Erbin Crowell, NEFU vice president and executive director of the Neighboring Food Co-op Association. Please join the NEFU (http://www.newenglandfarmersunion.org/join) to gain access to our co-op development expertise. Your membership contribution will enable us to further develop resources for co-ops.

Barbara Patterson is a New England Farmers Union policy intern. Sarah Andrysiak is a communications consultant for the New England Farmers Union.