Rural Cooperatives Magazine - March/April 2001
C O M M E N T A R Y
Research on cooperatives has diminished, as noted in the article by legal scholar James Baarda on page 21. New efforts are needed to invigorate thought and understanding about major forces impacting the operations of cooperatives and how they adapt structurally and functionally to them. Baarda shows the opportunity to draw on new, cutting-edge developments in disciplines such as legal theory, economics, sociology, political science and behavior management and how to apply them to cooperatives. Such an interdisciplinary approach to addressing these issues has the potential to enrich understanding of the role cooperatives play and better promote cooperative development in the United States and worldwide.
Sound far-fetched? Building intellectual capital about cooperative methods of operation, practices and principles is one of the missions of USDA's Cooperative Services program, first authorized in the Cooperative Marketing Act of 1926. At a time of increasing concentration in food manufacturing and distribution, cooperative approaches to marketing are being looked to increasingly by Congress as a means for farmers and other rural residents to access markets and to gain a modicum of control in the market chain, rather than being subservient to outside interests. It is ironic that - at a time of renewed interest in value-added marketing and improved rules for negotiated pricing over contract terms - research support for work on these important areas is lacking.
Such research is important for identifying keys to successful operation of cooperatives and understanding the causes of cooperative failures. It is also important to shedding light on how changes in various means of finance can affect member control and influence in their cooperatively owned businesses. Seldom do long-term consequences of deviations from conventional cooperative practices merit the in-depth assessment required to determine if they alter the basic nature of cooperatives. What may appear to be the idea of the moment or just "keeping up with the joneses" can end up costing members their equity and market presence. Just observe what has happened to Tri-Valley Growers and the Saskatchewan Wheat Pool. Could unwise courses of action have been averted by better understanding the nature of the cooperative business itself?
USDA's cooperative research program involves in-house efforts and coordination with university scholars through agreements that augment work on mutually agreed-upon projects. This effort needs to be elevated to meet the critical needs identified in the Baarda article and to avert a crisis in cooperative knowledge. Results can assist cooperative boards of directors and management in strategic planning, identification of best practices, and shed light on issues inherent in the increasingly complex organizations required for responding to global competition. They can also assist producers and other rural residents with economics in transition from centralized government to more democratically run and market-oriented ones.
The opportunity for application of the cooperative idea and its use has never been greater. It is through research and education that the cooperative idea expands and is nurtured.
Randall Torgerson, Deputy Administrator USDA Rural Business-Cooperative Service
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