Developing New Generation Co-ops: Getting Started on the Path to Success

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The rise of "new generation" cooperatives in value-added agriculture has fueled the fire among farmers and farm organizations to investigate, develop and build companies owned primarily by farmers. The term "new generation" in this article is used to describe cooperatives which are producing their own valueadded products, often non-food products. In many cases, stock sale to members is financing construction of processing facilities and members are contracting all or a large portion of their crop to the cooperative.
The changes and tensions caused by the 1995 Farm Bill, global market conditions, the declining number of farmers, the rising median age of farmers and economic stress in many rural communities have encouraged farmers to look for nontraditional opportunities to restore prosperity to themselves and their communities. Four factors in particular have widened the window of opportunity for further development of value-added agricultural projects. The first factor is the declining prosperity of many rural communities. A new focus on rural economic development to provide new jobs, protect existing businesses and create economic vitality has given new life to many rural areas. Projects can be tailored for specific economic areas. Value- added processing is a natural fit in this environment and can take advantage of specific crops and complementary industries in each community.

Cindy Thyfault
University of Wisconsin