Bill Fitzwater Cooperative Chair
The week of Independence Day might be a good time to note the independence of U.S. cooperatives. “Autonomy and Independence” is one of the ICA cooperative principles. I have given up trying to explain it and simply say that it is not very relevant in the U.S. but is important in some countries. In contrast to some countries where the government was heavily involved in developing the cooperative sector, most U.S. cooperatives started at the grass roots level. U.S, farmers were actively forming marketing organizations prior to the Sherman Anti-trust Act. Beginning in 1890 The Grange started hundreds of supply and marketing cooperatives, USDA listed 3,099 agricultural cooperatives in 1913. When those organizations became unintended targets of the Sherman Anti-Trust Act, the Capper Volstead Act emerged in 1922. The Capper Volstead Act and enabling legislation at the state level was obviously crucial to cooperative development. The underlying force was the grass roots effort of farmers helping themselves.
When I describe the U.S. cooperative system to international audiences, they are surprised at how successful it is and how chaotic it is. In some parts of the world, such as Asia and Africa there are government-mandated structures of cooperatives with designated cooperatives at the county level, state level and national level. In some countries, cooperatives have designated market areas to protect them from competing with each other. Cooperative education comes from a similar structure of government-sponsored councils. Although there are successful co-ops in those countries, there has also been instances where the governmental involvement remained when it was no longer needed, and those cooperatives were not truly controlled and owned by their members. Their production and assets were, in some cases, subject to seizure by the state.
In the U.S., we have a confusing mix of single location local cooperatives, multi-branch local cooperatives, centralized regional cooperatives and federated regional cooperatives. We have open membership and closed membership cooperatives along with hybrid investor-member firms and multi-stakeholder cooperatives. The presence and market share of cooperatives in various sectors comes not by design but rather from the success of autonomous firms. U.S. cooperatives compete with investor owned firms and in some cases other cooperatives, to win their role in the supply chain.
Despite the independent nature of the U.S. cooperative industry, or perhaps because of it, a strong sense of cooperation exists among cooperatives. Industry trade association spearhead cooperative education in the U.S. Research and education at the university level exists primarily because of the industry’s investment in endowed chairs. The ICA principle of “Cooperation between Cooperatives” is easy to explain because examples are plentiful.
As we celebrate the independence of our nation, let us not forget to celebrate the independence of our cooperatives. Our structure may look chaotic but it seems to work!