Georgia, Sep 30, 2011 -- Co-ops: A Vital Source of Rural Jobs
By Dallas Tonsager, Under Secretary
USDA Rural Development
It’s hard to live in rural America without being touched almost daily in some way by cooperatives. Farmers and ranchers across the nation use co-ops to process and market their crops and livestock and to provide them with essential production supplies and services. Electric and telecommunications utility cooperatives supply rural America with a reliable, affordable source of energy and communications technology, including phone and Internet services.
While these are the two cooperative sectors we work with most often at USDA Rural Development, there are many other types of producer-, user- and worker-owned co-ops across the nation that are helping to meet the myriad needs of rural and urban people and businesses. These range from co-op food stores and daycare centers to credit unions, insurance companies and hardware and building supply co-ops, among many others.
As we observe Cooperative Month throughout October, it is fitting that we focus special attention this year on cooperatives as a key source of jobs. Co-ops are playing a role as our nation strives to reduce high levels of unemployment by providing good jobs for tens of thousands of people in the farm sector alone.
According to USDA’s just-released economic survey of farmer cooperatives for 2010, U.S. agricultural and fishery cooperatives created 7,000 new jobs in 2010, boosting the number of jobs to 184,000 at the nearly 2,400 agricultural co-ops surveyed. This survey also shows that ag co-ops had their second best year on record for sales at $170 billion. Pre-tax net income of $4.3 billion was also the second best year ever for agricultural and fishery co-ops.
Because co-ops are locally or regionally owned by their members, a larger percent of these dollars “stay local,” circulating in the rural counties and towns where their members live and work. These dollars also support other local businesses and generate tax revenues that in turn support schools, police and fire services and other local government services.
While 7,000 new jobs, or even 184,000 total jobs, may not sound huge, remember that in rural areas especially, every job can be a crucially needed job. A grain and farm supply co-op, for example, with 30 or 40 employees will often be the leading employer in a rural community.
When one such co-op adds just three new jobs, it can be big news in a town of 800 or 900 people. It may translate into three more houses having “sold’ placards placed on the real estate sign in the front yard and commission checks for a real estate agent to deposit in the local bank. It could mean eight or nine new students in a rural school – maybe enough to justify hiring a new teacher, resulting in another house sold. It can mean a dozen or more new consumers to help support a rural grocery store and a surge in new business for the local barber or hair stylist, and so on.
Rural utility co-ops are also major employers in many rural communities. This co-op sector provides an additional 162,000 fulltime jobs nationally, according to a 2009 survey conducted by the University of Wisconsin Center for Cooperatives, with support from USDA. This survey looked at 17 co-op subsectors of the economy, finding that the co-op economy as a whole accounts for 853,000 jobs and $500 billion in annual revenue.
Focusing again on the agricultural sector, the job growth among co-ops is due in no small part to the continued strong prices for a number of key commodities, most notably in the dairy and livestock sectors. Indeed, 2010 marked the fourth consecutive year of strong sales performance by farmer co-ops, which is helping to fuel the upward employment trend.
The bottom line here is no great mystery: when American agriculture, utilities and industry are strong and thriving, it translates into more jobs and more economic vitality for the nation. Cooperatives – as a business model that puts the needs of member-owners and community first, and which help to keep more sales dollars and profits working close to home – are a key cog in the nation’s economic recovery efforts.
I believe that the potential of cooperative businesses to help more Americans improve the quality of their lives is almost unlimited. We at USDA will continue to foster co-op development and will strive to help improve co-op operations because – as the theme of this year’s Co-op Month celebration says – Cooperative Enterprises Build a Better World.
To learn more about cooperatives, visit the Co-op Month website at: www.go.coop, or www.usda.gov.