Cooperative Guiding Principles Support Community Well-being

AMES, Iowa -- Stephen Ronstrom, Sacred Heart Hospital CEO, wanted the healthiest foods available served at the Eau Claire, Wis., hospital. So, in 2008 he gave his hospitality service director the go-ahead to begin buying local food for the institution’s kitchen. The directive stemmed from Ronstrom’s belief that healthy, fresh, nutritious foods are part of the healing cycle of the patient. He was tired of sending the hospital’s money around the country and beyond to truck in food that could be grown and raised better by people in the hospital’s own community.

Rick Beckler, Sacred Heart Hospitality Services Director, admits it took a bit of fumbling around to figure out how to work with local producers to get the quantities of product needed by the hospital on an ongoing basis. “I knew I couldn’t just show up at the farmers' market and buy 1,500 pounds of ground beef,” Beckler said. The other thing he knew was 10  percent of the hospital’s food budget was committed to purchasing local food products. He used that to publicly challenge growers and producers to address this compelling community need and opportunity. As a result of that public challenge a new business, the Producers & Buyers Co-op, rose to meet the need.

Forming the cooperative

In communities across the country, people are working together through cooperatives to get the things they need. From telecommunication, electric and farmer cooperatives in rural areas to housing, organic food and childcare cooperatives in metropolitan areas – cooperatives bring people together to improve their quality of life and financial well-being.

Madeline Schultz, Iowa State University Extension cooperatives specialist, says there are a set of principles that define cooperatives. “Cooperatives have three basic principles that they adhere to – member benefits, member ownership and member control,” she said. “When we think about cooperatives, we think about businesses organized for the people that are going to use those products or services.”

The Producers & Buyers Co-op in Eau Claire has become a business that produces, processes and delivers nutritious local produce for institutional use, illustrating those principles. With assistance from River Country Resource and Development (RC&D) and Margaret Bau, Wisconsin-USDA Rural Development cooperative development specialist, the Producers & Buyers Co-op was formed using a multi-stakeholder approach with a membership that includes the producers, buyers, processors and local transportation. “This co-op is interesting from so many different perspectives,” said Bau. “For example, buyer-members are not mere customers. Buyer-members serve on the board, work on committees concerning product standards, work through fair pricing, and sweat through details of initial product runs.”

Through co-op membership, the Producers & Buyers Co-op buyers are part of the learning process about the seasonality of food, the constraints of not having enough processing facilities, crop failures, etc. “If a hospital likes the idea of obtaining locally grown food but isn’t willing to put in this extra effort or pay more for high quality food, then local food isn’t for them,” said Bau. “Cooperatives are all about being in an ongoing relationship with the other co-op members. It is a relationship of equals.”

The community benefits

As of September 2010, the Producers & Buyers Co-op had facilitated the purchase and transportation of more than $177,000 of locally grown product from more than 18 producer-members and four processor-members to three buyer-members.

There is growing interest in cooperatives especially among young adults, according to Iowa State’s Schultz.  “Cooperatives are self-affirming – you see a need and you address that need through the business,” she said. “People can make a contribution to their community by becoming involved in cooperatives several ways. They can start a business, become a member or serve on the board of directors.”

Folks around Eau Claire recognize the value of the Producers & Buyers Co-op. Member Darrell Lorch of Lorcrest Farms Inc., in Blair, Wis., says having a stable market price allows him to do more long range planning with his farm operation. Sacred Heart’s Beckler reports an outpouring of warm compliments on the hospital’s food from patients, Meals on Wheels patrons and employees. “We have learned a great deal about our community through the co-op,” said Beckler. “The civic engagement has been good on many levels. We are eating healthier and supporting a healthier local economy.”

Producers and processors that sign up for the Producers & Buyers Co-op promise to employ growing practices and animal husbandry that’s good for the land, good for the animals and good for the people who eat the food. The buyers, in turn agree to pay a price that reflects the cost of producing food that lives up to those standards plus a small profit. Buyers also agree to be flexible if certain products or quantities aren’t available when they want them, filling the gaps through other suppliers.

Educational materials about cooperatives online

Schultz said that anyone interested in starting a cooperative, needing to know more about cooperative board of director responsibilities, or wanting to learn about the opportunities associated with cooperatives can easily access information at eXtension is an educational partnership of 76 land-grant universities collaborating with industry experts and the USDA.  Information on specific topics is developed by teams of educators from across the country, called communities of practice (CoP).

“Cooperatives is one of about 50 communities of practice publishing on the eXtension website,” said Schultz who serves as chair for the CoP. “eXtension is an exciting place for us to be developing and delivering Web-based content on cooperatives because there are so many other topics of interest there.”

Schultz said it is the goal of the cooperatives CoP leadership team to bring the best information forward. “Many universities and organizations have some information about cooperatives available online, but it’s often difficult to find,” she said. “The leadership team has gathered the best of the best available information and is creating new content where they see unmet needs. We are hoping by using the eXtension platform more people will be able to access this collection of resources.”

Some cooperative experts believe economically challenging times foster the growth and interest in cooperatives, in part because start-up capital comes from member-investors and because of the civil engagement that is intrinsic to cooperatives. That interest is finding fresh support through models like the Producers & Buyers Co-op in Eau Claire, Wis., and the resources available at eXtension.

Youth and adults can increase their understanding of the cooperative business model; become more engaged as cooperative business members, employees, board directors and managers; and achieve greater economic and social improvements in their communities from the information available at eXtension.

Additional contact:
Gregory McKee, North Dakota State University, 701-231-8521,
Photos and captions
Coop photo 1 -- Lorcrest Farms Inc. receives their check directly from the hospital. Checks going directly from the institution to the farmer is unique to Producers & Buyers Co-op.
Coop photo 2 -- Madeline Schultz (center) and members of the Cooperatives CoP leadership team - Greg McKee (North Dakota), John Park (Texas), Brian Henehan (New York), John Wells (USDA) and Emmy Williams (Texas) -  at official launch of Cooperatives CoP website, Oct. 5, 2010.