"The most difficult challenge throughout the process was keeping the vision alive.
It was critical that people continued to be excited and feel ownership over the project..."

Having progressed from conception to incorporation,
fledgling Wisconsin co-op faces crucial questions

By Courtney Berner,
University of Wisconsin Center for Cooperatives

Editor’s note: The Fifth Season Cooperative is a
newly launched, multi-stakeholder cooperative in
Viroqua, Wis., that provides the infrastructure and
coordination needed to help rebuild the region’s food
system. This case study follows the co-op’s development
from the initial idea to the signing of the articles of
incorporation in August 2010.

he Fifth Season Cooperative is in the center of Wisconsin’s Driftless geological area, which includes parts of Wisconsin, Iowa, Minnesota and Illinois. This region was never glaciated, and thus has striking topography consisting of forested hills, steep valleys and clear streams, as well as a variety of ecosystems including grassland, forest, prairie and wetlands.

“This striking topography, however, makes agriculture in this region particularly challenging. The hills make for a breathtaking landscape, but they also limit the amount of productive land on farms. Farms in the Kickapoo Watershed are smaller than farms in the rest of the state. In Vernon County, for instance, the average farm size is 177 acres, compared to the state average of 228 acres,” according to a food assessment study of the area.

Despite these challenges, agriculture has long been the dominant industry in the region, which has enjoyed a rich variety of farmers and agricultural traditions over the years, from the Norwegian immigrants in the 1800s to the Amish families who settled more recently.

Despite the region’s wealth of agricultural resources (Vernon County alone has more than 200 organic farms), concerns have grown in recent years regarding its community food security. The Food Security Learning Center defines community food security as “a food system in which all community residents are able to obtain a safe, culturally appropriate, nutritionally sound diet through an economically and environmentally sustainable food system that promotes community self-reliance and social justice.”

While southwest Wisconsin produces large quantities of high-quality food, much of that food leaves the region for larger cities, including Madison, Milwaukee, Chicago and the Twin Cities. In 2007, the Valley Stewardship Network (VSN) launched a Food and Farm Initiative (FFI) in response to these concerns regarding local food security in southwest Wisconsin. The mission of FFI is to encourage the development of a sustainable, equitable local food system by: As part of the FFI, VSN conducted an 18-month community food assessment of Vernon County to better understand the county’s food assets, opportunities and needs and to identify the best strategies for improving food security. In Vernon County, the community food assessment served as a foundation for stakeholders to identify projects, policies and partnerships to meet the aforementioned goals of a sustainable food system.

Farmland in the
Driftless Region

Following the completion of the Vernon County Community Food Assessment, economist Ken Meter of the Crossroads Resource Center completed a rural economic assessment of southwest Wisconsin, based on the results of the food assessment, and reported the results to the communities in the region. Meter’s data, coupled with the findings of the FFI Community Food Assessment, revealed several important food system facts: The findings of these studies led the Vernon Economic Development Association (VEDA) to apply for a 2009 Buy Local Buy Wisconsin Grant (BLBW) that would support the infrastructure, coordination and education necessary to strengthen producer capacity and increase consumption of local food in SW Wisconsin. They decided that a multistakeholder cooperative is the best business model to meet the region’s needs for four key reasons: Co-op start up
VEDA was awarded the BLBW grant in 2010 and action was immediately taken to make the vision a reality. Executive Director Sue Noble formed two committees to begin the formal planning process: a slush group and a steering committee.

The slush group was comprised of key players who were highly invested in the project and had relevant expertise. The group included Margaret Bau, a cooperative development specialist with USDA Rural Development; Sue Noble, VEDA executive director; Nicole Penick, Buy Local coordinator; Jan Rasikas, general manager of the Viroqua Food Co-op; Marilyn Volden, director of Food and Nutrition Programs for Viroqua Public Schools; Brian Wickert, owner of EZ Farms, and Cecil Wright, director of Sustainable Giving at Organic Valley.

This group met often and dealt with the minute details of putting together a cooperative organization. One of the most difficult tasks this group undertook was articulating and building consensus around the various documents that defined the cooperative: the mission statement, vision statement, and bylaws.

Sue Noble also formed a larger steering committee that met about once a month. The purpose of these meetings was to inform the larger group of the progress being made and to make decisions regarding the actions and proposals of the Slush Group. Most of the attendees of these meetings were either potential co-op members or were somehow invested in rebuilding the regional food system.

Once the key organizational and legal documents were in order, the next major task was recruiting members for the interim board of directors. An organization’s first board is vital to its success, so Noble spent a lot of time making sure the first board included key stakeholders from each member class. An advisory council was also formed to help the board navigate the process of starting a new cooperative.

Noble emphasized that keeping Rasikas and Wright as key advisers in this process was essential. Along with Bau, they have offered invaluable guidance on budgeting, vision development and cooperative governance. Noble noted that the most difficult challenge throughout the process was keeping the vision alive.

“It was critical that people continued to be excited and feel ownership over the project even though they didn’t attend every meeting,” she says. “Facilitation of the process was key.”

Co-op structure
The Fifth Season Cooperative’s multi-stakeholder organization is a unique business structure in the United States. The cooperative has six member classes that span the entire supply chain. The list includes producers, producer groups, processors, distributors, buyers, and workers.

Producers are growers in the region who sell produce, meat or dairy. Processors are businesses from the region that make value-added products. Producer groups are agricultural businesses in the region that aggregate and sell produce, meat or dairy. Distributors are businesses from the region that transport agricultural products. Buyers may include institutions and retail operations in the region that purchase product from the co-op. Workers may become members and contribute to the success of the cooperative through their labor.

There is currently one employee, Nicole Penick, who is serving as the project coordinator. The membership classes represent the key players in the food system at the local level, thereby putting the entire supply chain at one table. The motivations behind this organizational structure are to keep local dollars circulating in the community and to develop long-term relationships between growers and buyers that lead to fair pricing and fair treatment of all members of the supply chain.

Moving forward
The Fifth Season Cooperative is at an important junction. The co-op has filed its articles of incorporation and is now an official entity. There is an interim board of directors in place that is leading the way until the formal board is elected at the first annual meeting. This interim board has a lot of decisions to make that greatly influence Fifth Seasons’ operations, objectives, and success. There are four questions that the interim board will have to resolve:

Membership — In order to be successful and fulfill its mission, Fifth Season needs to recruit diverse classes of members. What is the motivation for someone to join Fifth Season? How does Fifth Season make the case that joining the co-op is a good investment?

Pricing — Determining prices that each member considers fair will be a critical challenge for the interim board. As a multi-stakeholder cooperative that includes every level of the supply chain, how will Fifth Season set prices with which all members are satisfied?

Raising Capital — The Vernon Economic Development Association was awarded $40,000 over two years to start a cooperative; however, the grant does not cover all of Fifth Season’s expenses for the first two years. As the co-op is in the start-up phase and working toward building membership and revenue, it needs additional capital to fund operations and capital expenditures. How will this cooperative be financed? How does the co-op build equity?

Organic vs. conventional — There are more than 220 organic farms in Vernon County alone as well as many conventional growers in the region. Should the cooperative be exclusively organic or should it sell both conventional and organic products? The answers to these related questions have ripple effects as they affect pricing, membership, marketing, and the overall functioning of the organization.

Shuttered factory to see new life as food hub

Wisconsin Governor Jim Doyle on Sept. 30 announced a $2 million Economic Development Administration award to the Vernon Economic Development Association (VEDA) and the City of Viroqua for a food processing and distribution center in Viroqua. The grant will help VEDA turn a 100,000- square-foot former factory into a regional hub for food processing, storage and distribution.

In addition to providing much-needed storage for regional farmers, the building will also include rental space for local food businesses and a home for the newly incorporated Fifth Season Cooperative.

“This facility is a tremendous resource to the agricultural industry in our region. It provides the aggregation, processing and distribution infrastructure to help small producers increase their market opportunities and business capacity,” Susan Noble, executive director of VEDA said. “We’re creating jobs, increasing the tax base and engaging our own local entrepreneurs to grow the economy.”

November/December Table of Contents