USDA: Committed to Co-ops

By U.S. Agriculture Secretary Tom Vilsack

n May, USDA observed the 75th anniversary of the founding of the Rural Electrification Administration. Established by an Executive Order signed by President Franklin Roosevelt, REA has made an immeasurable impact on rural America, credited with transforming a live of challenge into one of productivity and prosperity.

As important as establishment of the REA was, it almost certainly would not have been a success without a vibrant partnership between USDA and America’s electric cooperatives. Since 1940, over 900 rural cooperatives have partnered with USDA to bring services to rural communities. Our partnership is deep and lasting.

T he REA case is just one of a series of examples of the cooperative model providing a way for producers or buyers to band together to provide essential member services. USDA— through programs that include the Intermediary Relending Program, Rural Business Enterprise Grants, and Rural Economic Development Loans and Grants — promotes collaboration and capital formation that encourages job creation through economic opportunity. Cooperative ownership of business not only creates wealth, but also makes it more likely that capital will remain and circulate repeatedly in local communities.

Cooperatives work. Because of the essential service that cooperatives provide to farmers and rural communities, USDA will continue to support cooperatives through research, education, technical assistance and promote the cooperative business model through efforts such as the publication of the magazine you hold in your hands today or are reading on the Internet. Our support for America’s cooperatives is firm and unwavering.

T he cooperative model has worked well since Congress enacted the Capper-Volstead Act in 1922 (see page 9). USDA supported then, and will continue to support, the ability of producers to join together to collectively market their products. Because of this, the Capper-Volsted Act and other cooperative statutes need to continue to serve America’s rural citizens.

You may have heard that the series of agriculture competition workshops that USDA is jointly hosting with the U.S. Department of Justice are somehow focused on weakening the cooperative model. T his characterization is not only wrong, but it is 180 degrees from the goal of the workshops. T hese workshops are designed to consider the competitive environment of the agricultural and food sectors to ensure that farmers, ranchers and consumers are getting a fair shake. As the audience for this publication well knows, one of the main purposes of the cooperatives statutes is to increase farmers’ bargaining power to level the playing field in agricultural markets.

There is no doubt that cooperatives, including electric, farmer, rancher and fisheries, have an enormous impact on the American economy. In a USDA-funded study, the University of Wisconsin Center for Cooperatives in 2008 identified 29,000 cooperatives employing more than 850,000 people and controlling $3 trillion in assets. T he nation’s cooperatives are strong, vibrant and engaged. Farmer, rancher and fisheries cooperatives alone employ 178,000 people.

But there are challenges. Over the past 40 years, rural America has lost over 1 million farmers and ranchers. Rural America is aging, and those living there earn less than their urban counterparts and are more likely to live in poverty. Today, more than ever before, we need the help of our cooperatives to turn things around.

T he American Recovery and Reinvestment Act of 2009, signed by President Obama over a year ago, is a resounding success, improving water quality, supporting business growth and renewable energy development and bringing broadband to rural communities. However, as with the REA 75 years ago, its impact would be greatly diminished without the support of the thousands of men and women who belong to, or run, America’s cooperatives.

Since President Obama took office, I have traveled across America, from remote communities in Alaska and New Mexico to Midwest farms and western ranches. Everywhere I go, I meet with cooperative members. T hey agree with me that while production agriculture remains at the heart of the rural economy, we have to build a thriving companion economy to complement production agriculture in rural America. To build this companion economy, we need rural communities that: Cooperatives, and their members, can — and must — play a crucial role in all four of these goals.

In early June, I hosted a National Summit of Rural America: A Dialogue for Renewing Promise on the campus of Jefferson College, near St. Louis, Mo. It was an opportunity for rural residents, including cooperative members, to share their vision for creating a more prosperous and promising future for rural America. The meeting was a step in the continuing discussion of how USDA and cooperatives can continue their decades-long partnership and create a new, vibrant rural America. I look forward to continuing this mutually beneficial dialogue.

May/June Table of Contents