COMMENTARY
80th Anniversary of Cooperative Marketing Act
On July 2, 1926, President Calvin Coolidge signed the
Cooperative Marketing Act into law, formally launching the
federal government’s role in assisting farmer-owned cooperatives.
Although USDA first assembled data on farmer co-ops
in 1901 and launched its first official cooperative project in
1912, it was the 1926 Act that really got the show on the
road. The first of the program’s subsequent “homes” was the
Division of Cooperative Marketing within USDA’s Bureau of
Agricultural Economics. For six years in the 1930s, it was
even housed in the Farm Credit Administration before
returning to USDA.
Rather than a regulatory program, the framers of the law
envisioned it as a program that would provide education,
research and technical assistance to help farmers help themselves.
Eighty years later, this mission continues, although
Mr. Coolidge and Co. would certainly be amazed by the radical
transformation of the nation’s rural (and urban, for that
matter) areas. The number of farmers is, of course, greatly
reduced, and the size of the average farm has greatly expanded.
But the marketing and other challenges facing farmers are
more formidable and complex than ever, and hence the performance
of their cooperatives is still vital.
To see how a co-op can evolve and grow along with the
farm economy, just turn to the coverage on page 4 of this
issue to read about CHS Inc. as it marks its 75th anniversary.
The history of CHS and its predecessor co-ops is, in many
respects, also the history of agriculture and co-ops in the
Midwest and Northwest.
Examples of innovative medium and small size co-ops are,
of course, also featured in every issue of this magazine and
demonstrate how flexible the co-op model is. Strategic
alliances and joint ventures among co-ops, new-generation
co-ops, use of co-op subsidiaries, co-ops with international
members and using outside equity to supplement farmers’
equity are examples of this flexibility. Co-ops are industry
leaders in identity preservation, niche marketing, development
of new products and services and other ways of providing
member support.
Despite the passage of 80 years, the scope of activities
Congress directed USDA to help farmers pursue through coops
still serves as a road map to the types of endeavors farmer
co-ops are engaged in today. The Act directed service to be
provided to associations, federations and subsidiaries of agricultural
producers “engaged in cooperative marketing of agricultural
products, including processing, warehousing, manufacturing,
storage, cooperative purchasing of farm supplies,
credit, financing, insurance and other cooperative activities.”
The Act has seven subsections, which direct the following
activities to be undertaken:
- Promoting knowledge of cooperatives principles and practices
and cooperating with educational and marketing agencies,
cooperatives and others in promoting that knowledge;
- Making special studies in the United States and foreign
countries and acquiring and disseminating information and
findings useful in the development and practice of cooperatives;
- Gathering, analyzing and disseminating economic, statistical
and historical information about cooperative business
methods;
- Studying economic, legal, financial, social and other phases
of cooperation and publishing the results;
- Surveying and analyzing accounts and business practices of
cooperative associations...and publishing summaries of
results to guide other cooperatives in developing methods
of business and marketing analysis;
- Advising committees or producer groups seeking to organize
a cooperative and making an economic analysis...
- Employing qualified commodity marketing specialists to
summarize and analyze the information and disseminate it
to cooperatives and others.
After 80 years, should the Act be updated? Some have suggested
expanding the scope to include all types of cooperatives,
not just agricultural cooperatives. Should the role of the
program – now housed with USDA Rural Development – be
expanded to include other types of producer-owned agribusinesses
(such as the producer-owned LLCs gaining popularity
in the biofuels industry)?
These and other questions and issues concerning the
future of producer-owned and other types of cooperatives
will need to be resolved as co-ops position themselves to provide
the types of services their members need in order to
prosper.
Dan Campbell, Editor
