INSIDE RURAL DEVELOPMENT
USDA B&I program supports
growth of organic cooperatives
By Peter J.Thomas,Administrator
Business and Cooperative
Programs
USDA Rural Development
ne of the foundations
that helped build
America has been cooperatives.
The Pilgrims
who settled in Plymouth,
Mass., formed a cooperative to harvest
the land in which the first Thanksgiving
was celebrated.
Cooperatives have come a long way
since the days of the Pilgrims, but
what has not changed is the value that
each cooperative brings to the local
economy.
One such cooperative that USDA
Rural Development’s Business &
Cooperative Service division has provided
financial support to is CROPP
(the Cooperative Regions Organic
Production Pools Cooperative).
Featured on the cover and page 15 of
this magazine, CROPP was founded in
1988 by a group of seven family farmers
who had a love of the land and
believed in sustainable agriculture.
It has grown into the largest organic
co-op in the United States, with 689
farmer members — including more
than 500 dairy farm members — in 17
states. Its Organic Valley brand milk,
cheese and other foods are sold nationally.
What a success story CROPP has
become!
On the dairy side of CROPP’s business,
farmers currently average $20 per
cwt, far more than conventional farmers
average. Co-op members are
actively involved with the direction
and decisionmaking of the company.
USDA Business & Industry (B&I)
Guaranteed loans financed about 70
percent of the capital needed to construct
CROPP’s new headquarters.
The first loan, for $4.2 million, was
made in 2001 for working capital and
refinancing of working-capital debt.
The co-op had been experiencing
rapid growth, but needed a long-term
solution to its working capital needs. It
requested a seven-year term loan to
assist with these needs.
The second loan was made in 2004
for the construction of a new office
building. As the co-op grew, it added
personnel and rented more office space
in LaFarge. The co-op offices were
spread throughout LaFarge in various
buildings and trailers.
Co-op leaders desired a more centralized
location, and thus decided to
build an office building to bring everything
under one roof. The facility is a
70x200-foot, two-story building with a
walkout basement. It gives CROPP
45,000 square feet of space.
The facility encompasses just under
three acres and can accommodate up
to 279 employees, which is the expected
staff growth through 2008. There
is ample parking.
USDA also provided a $500,000
Value Added Producer Grant in 2001
to the Organic Meats Co., a CROPP
subsidiary.
In 2004, Rural Development made
463 loans worth $972 million in B&I
guaranteed loans to support new and
expanded rural businesses. This program
stimulates rural economies and
creates jobs. Under it, business owners
(including cooperatives) arrange a B&I
loan through a local, participating
financial institution. USDA Rural
Development then can guarantee up to
80 percent of the loan amount.
Loans of up to $10 million (more in
some cases) can be guaranteed by
USDA under the B&I program.
For more information on the B&I
program and other USDA financial
programs for rural businesses and
cooperatives, I encourage you to visit
our Web site at: www.rurdev.usda.gov,
then click the “Business-Cooperative”
program buttons. Or call (202) 720-
4323 to be connected to your USDA
Rural Development state office.
USDA Rural Development is committed
to providing determined leadership
to increase economic opportunities
and improve the quality of life for
citizens living in America’s rural communities.
With 47 state offices and 800
field offices, we look forward to working
with you to bring opportunities to
you, your cooperatives and businesses,
and to your communities.
