COMMENTARY
Attention to member, market needs is key to cooperative success
As member-driven businesses, cooperatives
are constantly required to assess
members’ needs and to stay in tune with
those needs. This requirement is also a
fundamental step in organizing new
cooperative business ventures. A lot of
time and effort goes into identifying the
mutual needs of prospective members
and in determining activities that the
cooperative will engage in to meet
those needs. This provides a rationale
for members to invest in the
new venture.
The needs assessment is also an
important albeit more complicated
step for established cooperatives.
Is there sufficient volume of
purchases or marketing to justify
continued use of assets at different
locations? Are there new business
services required that provide an
opportunity for expansion into new
areas, or to extend processing of raw
commodities into more profitable uses
that can return additional income to
members?
This constant evaluation of member
needs and the cooperative’s ability to
respond to them is a fundamental
strength of cooperative enterprise.
What other business is better able to
determine those needs than a user owned
business?
Needs assessment is more complicated
for established local and regional
cooperatives due to the increasing
diversity in the size of members’ operations
and the wide range of needs
among different segments of the membership.
A homogenous membership,
with similar needs and sizes of operations,
has generally been regarded as an
underlying key to cooperative success.
With a diverse membership, cooperative
management and boards of directors
must work harder to identify market
segments that can be profitably
served while still maintaining the common
interest of the entire membership.
For instance, farm supply products
and delivery needed by large commercial
farmers differ significantly from
those for small and part-time farmers.
Similarly, the marketing needs of each
segment of membership can differ
markedly.
Cultural similarities among members
and their community of interest
can also be a determining factor for
effective collective action. Such factors
as national origins, religious beliefs,
ethnicity and work ethics are each
manifested in one way or another in
the makeup of cooperatives in the
United States and internationally.
Challenges posed by diverse memberships
should be met and turned
into strengths. Cooperatives are
inherently positioned to be more sensitive
to varying needs because they
are focused on the business of serving
those needs. Nothing in size, location
or membership makeup detracts from
that central purpose.
In addition, cooperatives have
demonstrated far more ability to adapt
than they have been credited for.
Forthright, well thought-out responses
to rapid and important changes in
American agriculture and society as
a whole will make farmer cooperation
an ongoing, effective way for
farmers to participate in the control,
benefits and the contributions of
agriculture.
Good examples of assessing
member needs and business lines
that can effectively meet those
needs are found in the articles in
this issue about local cooperatives
in western Iowa, and the
evolving cooperative marketing
efforts of small minority farmers
in north Florida and adjoining
states. Each mirrors cultural
attributes of producers in the
communities involved, and the tastes,
preferences and marketing requirements
for serving various segments of
the marketplace.
Another excellent contribution to
this dialogue is also found in the Management
Tip article, about standards
required of cooperative directors to
meet their responsibilities as stewards
of members’ interests and in overseeing
operations of cooperatives.
As Cooperative Month is celebrated
throughout the country in October, we
are reminded of the significant role
played by cooperatives in communities
throughout rural America and the continuing
opportunity for needs of farmers
and rural residents to be met
through effective forms of group action.
Randall E. Torgerson,
Deputy Administrator,
USDA Rural Business-Cooperative Service
