Does Your Cooperative Support the Cooperative Economy?
Phil Kenkel
Bill Fitzwater Cooperative Chair
It is likely that your cooperative was established because a group of producers perceived a benefit in
working together. By organizing a cooperative they selected a different business model where
profits are distributed to the customers using the business. The cooperative business model benefits
not only the members but also the local community. Your cooperative is committed to the
cooperative business model but is it committed to growing the cooperative economy?
Many dollars flow out of cooperatives into investor owned firms. In many cases this is a necessity.
For example, I don’t know of any grain bin construction companies organized as cooperatives. In
other cases, a local cooperative faces a business decision in using a regional cooperative or another
vender. It has been observed that today’s generation of producers has a lower sense of loyalty to
cooperatives than did their predecessors. The same could be said of local cooperatives.
One of the modern cooperative principles is “Cooperation between Cooperatives”. The interaction
and support network of cooperative managers and board members is a truly unique and gratifying
aspect of the cooperative industry. The next step could be making your members aware of the other
cooperatives, including farm credit association, rural electric cooperatives and credit unions that are
in your community. You could even consider creating affinity programs that encourage your
members to do business with and join these other cooperatives.
Oklahoma cooperatives have had great success in forming alliances and joint ventures to increase
the efficiency of their operations. Many, if not most are involved in a least one LLC. The LLC is a
very flexible business form which can be structured to operate on a cooperative basis. Still, it could
be argued that cooperatives migrate toward the investor-owned business forms as they organize new
ventures. Oklahoma newest cooperative statue, the limited cooperative association, allows greater
flexibility in combining patronage and investment based returns. Perhaps we should consider this
structure for new multi-cooperative ventures.
As our economy evolves, there are opportunities to form new cooperatives. For an existing co-op, a
new co-op business in the local economy means new peers and more people understanding and
committed to co-op principles and values. It can also mean an improved bottom line and more
member benefits."Who better than an existing, successful cooperative to support a startup co-op?
Managers, directors and employee of functioning cooperative businesses know the benefits and the
challenges that cooperatives face. You can provide support that can make a difference.
By working together to promote cooperatives, we ensure our own long-term success.
4-13-2011