New generation cooperative leadership training can aid rural community development

Cooperative development requires trained board members to act on the behalf of the membership at large to attain their goals. MSU Product Center – Food, Ag, Bio professionals offer board training and more.

Agriculture is a vital component of our national economy and plays an essential part of rural economies. To stay competitive one solution rural communities can adopt is encouragement of value-added cooperatives. The concept of value-added cooperatives need trained cooperative directors and MSU Product Center – Food, Ag, Bio can provide that training.

Due to overproduction and deteriorating global markets, the United States is in danger of losing one of the sacred characteristics of the New World—individual ownership of productive land. Farmers have excelled at increasing production, but have had limited success increasing their incomes. The 70-year-old federal price support “safety net” is under constant scrutiny, and the concept of growing something and taking whatever price the market will offer is no longer a viable option.

Cooperatives are owned and used by the producers. Co-ops provide goods and services to meet the needs of the owners. New generation value-added cooperatives are springing up all over the upper Midwest, processing raw farm crops into consumer-oriented products. Cutting out of the middle-man and getting closer to the end user allows the profits to flow back to the farm. This could help save mid-sized farming operations by allowing them to combine production with other producers to reach markets that demand larger volumes. New generation cooperatives also need a substantial amount of capital. Trained directors are essential to protect and utilize this capital.

Cooperative directors represent the needs of the members. They are elected by and are ultimately responsible to the members for the success of the business. Business planning, understanding financial statements, selecting, directing and monitoring management are just some of the duties of the directors. While farmers are business people, most have not been involved in directing a large corporation like many value-added cooperatives become. Trained directors are crucial for success.

Board training provided by the Product Center can help ensure this success. Michigan State University (MSU) Extension personnel are charged with providing university-based research to the farm to increase production and income. Today, it is vital to increase income, and one method is to provide the financial tools value-added cooperatives need. Looking to Extension to assist in increasing the knowledge base of cooperative directors is one tool that should not be overlooked.