IN THE SP0T LIGHT

Life in the cooperative lane



John Malcheski, Wisconsin's roving co-op ambassador,
spreads cooperative skills and knowledge worldwide


Patrick Duffey,
USDA Rural Development

Editor's Note: In late September, John Malcheski departed for Siberia on his 14th Mission for ACDI/VOCA and the eighth country he has traveled to for that organization, which uses American co-op volunteers to help improve the food-production systems of other nations. In this interview, Malcheski relates some of his extensive experiences with cooperatives at home and abroad.

Malcheski came from a family back-ground with strong cooperative roots, which became his springboard into a career as a prominent Wisconsin dairyman and cooperative leader in both national and international arenas. Today, at 68, Malcheski still operates a 500 acre dairy farm near his hometown of Pulaski, near Green Bay.


"Those cooperatives that don't see the changes coming won't last," says Wisconsin dairymen John Malcheski, at home on his 500 acre farm near Green Bay. USDA photo by Patrick Duffey

Rural Cooperatives: Where did you gain your strong commitment to cooperatives?
Malcheski: My father, Edward, lived and breathed cooperatives. It was a big part of our home life. He was an active leader in Wisconsin agriculture and in 1927 opened a small cheese making cooperative that served 12 area farmers. This was in addition to his dairy farm operation. After all, he had a wife and nine kids to feed! The cheese factory continued operating until 1947, when big changes began in the dairy processing business. He helped form and was a director of three area cooperatives: Pulaski Chase for farm supplies; the Brown County Production Credit Association and Federal Land Bank, which provided post-Depression credit for farmers; and a Pulaski livestock shipping association to give farmers access to better prices at the Milwaukee terminal market. The idea of foreign service also stemmed from my father. Poland, the former breadbasket of Europe, was demolished in World War II. People needed food, so the United States introduced the Marshall Plan for rebuilding Europe. It was administered by the United Nations (U.N.). My father headed its farm machinery distribution program in Poland. While he was gone, my mother and the family operated the farm. My sister, Helen, took over the cheese factory and became the first woman to be a licensed cheesemaker in the state.
RC: When did you first become active with cooperatives?
Malcheski: I was a delegate to Badger Breeders (now Genex) and Consolidated Badger dairy marketing cooperative and later was elected to the boards of Pulaski Chase and Consolidated Badger. During my 20 years on the dairy cooperative board, six of them as chairman, we changed its corporate name to match its popular brand name, Morning Glory. It was the third largest dairy marketing cooperative in the state in 1988 when we merged with Associated Milk Producers, Inc. (AMPI). When AMPI was realigned in the early 1990s, Foremost Farms dairy cooperative, based at Baraboo, purchased the assets of Morning Glory. During my 25 years on the Pulaski Chase board, its sales grew from $3 million to $20 million. In 1978, I joined the Land O'Lakes (LOL) board, served for 15 years and witnessed a lot of changes and growth. Our Wisconsin Federation of Cooperatives (WFC) is one of the finest trade organizations in the country. I'm currently in my last term on its board. With an annual operating budget of $3 million, it brings together cooperatives from varied interests under one umbrella. Members range from farm supply and marketing cooperatives to those representing insurance, housing. health, rural electrics, town and home mutuals and credit unions. AATC also monitors proposed legislation related to our broad membership, much of it with a rural base. In our alliance with Minnesota Association of Cooperatives, we discuss ways to make our programs more efficient, with emphasis on improving cooperative education. The future of young members lies in educating new generations about how cooperatives work and why they need to support them. We also want to reinforce the knowledge of those who are already involved with cooperatives. Our state organizations also cooperate with the Iowa Institute for Cooperatives in a common cooperative development program.
RC:Wisconsin is served by a number farm supply cooperatives. Is there any pending consolidation activity?
Malcheski: Our cooperatives are moving in that direction, trying to keep pace with shrinking numbers but larger size of remaining farms. Fewer cooperatives in the future will cover larger territories and provide more technical services to create more efficiencies for their members. Local cooperatives will either volunteer or be forced to merge with their neighbors. Cooperatives need to tap more of the profits from moving farm products to consumer markets. Feed and agronomy centers already are creating more efficiencies for farmers. And since labor is a critical part of farm operations, cooperatives such as ours must provide technical services with a highly trained staff. Although our cooperative's farm supply business is larger, we also buy and sell farmers' grain. In time, we'll offer services members want if the cooperative can make a profit at it. Those cooperatives that don't see the change coming won't last.
RC: How have the Malcheskis survived when so many dairy farmers have been forced to quit in recent years?
Malcheski: As evidence of how dairy farm numbers have shrunk on just our country road, at one time 14 dairy farmers flourished compared with only five today. We brought in the second generation and have farmed in partnership with my sons John and Scott since 1996. We developed a rent/purchase agreement with my sons so the cattle, farm and equipment will eventually flow to them. The milk production average for our 200 cow herd is 25,000 pounds per cow per year. My son Steve operates an adjoining farm of nearly 100 acres and milks 60 cows. We market our milk supply to Land O'Lakes, Inc. (LOL).
RC: How has your cooperative benefited from the joint agronomy venture between CENEX and LOL?
Malcheski: It made our fertilizer system more efficient and lowered members' nutrient costs that were passed on in patronage returns. We also built our cooperative's service base with improved facilities, delivery equipment, and a trained staff. Some further centralizing of local services may be in the offing.
RC: Does your cooperative encourage young farmers to participate on the board of directors?
Malcheski:. We meet twice a year with local young farmers to provide crop and livestock production information and also educate them about cooperatives. We also participate in education programs of regionals and the WFC. Producers need continuous education about how to use and patronize cooperatives and how they are structured and controlled. The University of Wisconsin Center for Cooperatives in Madison also has programs for young farmers that encourage them to get involved with their cooperatives and serving other members. Those leadership skills often pour over into local communities. By contrast, non-cooperatives offer no such leadership opportunities.


This shrine near the Malcheski farm was built by Polish Catholic farmers who settled in large numbers around Pulaski, Wis. The town is home to the largest rural church in the world.


RC: How did you become involved in international development work?
Malcheski: When communism in Eastern Europe collapsed along with its centralized food production system in 1989, it left a void. Food costs were running 60-80 percent of people's income. Congress expanded the farmer-to-farmer program to include U.S. support to the former Soviet states to address food production, marketing and finance needs. Dr. Vern Freeh, L0L's vice-president of international development while I was on its board, was also a director of ACDI/VOCA, which was affiliated with the National Council of Farmer Cooperatives. He invited me to participate in its program. I was one of the first seven to enter the program in Poland in 1990. I had seen the failure of communism there firsthand during private visits in 1983 and 1985. When the Soviet empire collapsed and ACDI/VOCA wanted volunteers, I was eager to share my farming and cooperative experiences with people who were being introduced to capitalism and free enterprise. We tried to show the Polish farmers that our U.S. cooperatives were examples of building better agricultural enterprises and markets. The idea was challenged in Eastern Europe because producers likened our cooperatives to the old communist system. It took time to re-educate them as to the real goal of cooperatives: to strengthen the hand of producers, not the state.
RC: How does the ACDI/VOCA program work?
Malcheski: We plant "seeds" by encouraging producers to look at the U.S. cooperative system as a way to provide supplies and market produce and livestock. We sought people with a burning in their bellies to move forward. When the old state collective farms were split, land was returned to original owners or their relatives. Parcels were small according to the old European system and often scattered. Former office workers, cooks and truck drivers were becoming new farmers. We encouraged them to swap parcels to gain more contiguous acres. We also worked with government agricultural ministries to help farmers expand this private sector. ACDI/VOCA established offices in various countries and developed contracts with groups or individuals who had ideas on helping agricultural organizations. Usually, ACDI/VOCA recruited volunteers and provided money for food and lodging. The host recipients provided transportation and translators. It was always nice to find aggressive persons or groups who wanted to change or improve their system. We found the right person in Poland and in three short weeks put together Agro-Wisconsin, a farm supply and grain marketing cooperative complete with bylaws, elections and a manager. The cooperative purchased grain from local farmers. I worked with Norval Dvorak, a retired executive from Packerland Packing Company at Green Bay. We each invested $100 to give Agro some start-up cash flow. The cooperative lasted for a time, but later fell apart due to bickering on the board. That led to its financial ruin. In subsequent visits to Poland by other volunteers, including Dvorak, Agro was consolidated with another cooperative, so our efforts weren't entirely wasted. Former Agro leader Alex Bohenski is now the sweet corn king of Poland. He slowly began planting sweet corn and selling it on the streets of major Polish cities and to a government processing plant. He now owns the plant, contracts with farmers to grow sweet corn, sells, it to Burger King and also markets it under the trade name of Zolty Ameriky, which translated means 'Gold of America. 'Thanks to another volunteer, a retired executive with Dean Foods at Green Bay, surplus processing equipment was purchased from the company and installed to update the plant in Poland.
RC: What was your most memorable experience with ACDL/VOCA?
Malcheski: All my trips were memorable, but Egypt stands out because of its early recorded history, the pyramids and their culture. I was impressed with the Egyptians' ability to produce food by irrigation. Canals laid out during the days of the pharaohs 4,000 to 5,000 years ago are still in use and are helping the Egyptians turn the desert green. Four of my 14 volunteer trips were to Egypt. I kept getting involved and going back on a new project. Egypt was the most eye opening because of the tremendous amount of hand labor required to produce food. The kids start working at age 6 and 7. Many can't read or write. It's very sad to see. So, we need to tie in some basic level of education in future programs. But, the people we met were very happy and hard working. Poverty was prevalent by our standards, but they don't see poverty as such. Something as common as a three-tine pitchfork from an American farm would be an innovation in some countries. If I go again, I'd like to take one along just to show what can be accomplished with a simple pitchfork. Egypt's long-standing, two-class system is gradually changing with the rise of a middle class. But it will take another 50-100 years to raise the living standards for a lot of people. My work in Egypt was always with different dairy farmers, large and small. We tried to offer technical advice to fit particular situations we encountered such as cattle comfort, milking procedures, nutrition, feed storage, genetics and raising calves and heifers. To help Egypt become more self-sufficient, in 1997 ACDI/VOCA instituted a five-year AgLink program. A cooperative will be in place when the project is completed so they can help themselves in any area needed. They have a tremendous knowledge about dairying in Egypt, but individual farmers don't share their experiences with others. The AgLink program will change that. The return on investment will be a lot more agricultural trade with Egypt.
RC: What obstacles did you encounter in other countries you visited?
Malcheski: In Macedonia, about one-third the size of Wisconsin, they had many languages and customs to penetrate. Armenia was the toughest assignment. During my visit, most people had no electricity for a number of hours each day due to a fuel shortage brought on by a war with neighboring Azerbaijan. Farming equipment from the old collective farm system was in short supply, so we encouraged the formation of cooperatives that could rent tilling and harvesting equipment to farmers. Latvia showed the need for more open borders between small countries to allow freer movement of supplies and produce. The farmers had a labyrinth to penetrate to accomplish what to us was the simplest of tasks. If a farmer was running short on hay for his cattle, his herd might be half starved by the time he could get in an emergency supply. By contrast, if my farm's hay supply is running low, I can call a source in Kansas and have a truckload delivered overnight. In Lithuania, I worked with Chuck Steen from Growmark helping newly privatized farmers with cattle management, improving milk quality and building design. We'd team up for night meetings to discuss marketing, food packaging, appearance and customer satisfaction things they didn't have to deal with under communism.

Malcheski explains changes needed in a dairy operation in Egypt during one of his many overseas trips as an ACDC/VOCA volunteer. Photo courtesy ACDI/VOCA

RC: What other problems do volunteers encounter in host countries?
Malcheski: One of the primary impediments is inadequate legal statutes to assist cooperative development. Others are inflation and high interest costs, unwillingness to invest in agriculture, political instability, lack of marketing information and transportation, government price setting and poor transfer of research from universities to farmers. Worse yet, there's nothing comparable to the agricultural education provided by our Extension Service and other USDA agencies. Some people in this country, with a mouthful of food, criticize these programs. Yet, those programs created our system that produces ample food supplies.
RC: What connection did you see between food production costs and national stability?
Malcheski:These programs help build the agricultural sector of host countries, but are a small part of U.S. foreign aid, which accounts for four-tenths of 1 percent of the total federal budget. We're getting a good return on our investment. In just dairying, for instance, as we help others improve that sector, we open the door to expanding our agricultural export markets. Because of our extensive experience, we can help them avoid some of the pitfalls we faced years ago. In every country I visited, I tried to find out what percent of an average worker's income was spent on buying food. It was shocking from 40 percent in Egypt to 80 percent in Armenia and Russia. You can not have national peace and stability with these conditions. I think the developed countries such as the United States and Western Europe should devote more foreign aid money toward improving food production in these developing countries.
RC: Would you encourage others to participate in ACDI/VOCA?
Malcheski: Participation brings you great experiences and personal enrichment. We encountered wonderful people in all of our visits. You'll learn more than you think and you'll like sharing ideas. It will enrich your soul and you'll come back really appreciating the USA.




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