Thursday, 03 April 2014 09:54

Resources for Grower Cooperatives

How do you start a Cooperative?  Where do you begin?  Below you will find information a couple of great resources - USDA Rural Development and NW Cooperative Development Center.

USDA Rural Development

Resources:

Power Point Presentation - Steps to Organizing a Cooperative

Rural Cooperative Development Grant Program - The Rural Cooperative Development Grant program provides funding for establishing and operating centers for cooperative development. The primary purpose of these centers is improving the economic condition of rural areas through the development of new cooperatives and improving operations of existing cooperatives.

Publications on cooperative development: 

Value Added Producer Grant

How to Start a Cooperative

Cooperative Feasibility Study Guide

Creating Co-op Fever: A Rural Developer Guide to Forming Cooperatives

Sample Legal Documents for Cooperatives

Sample Policies for Cooperatives

Library of publications on Cooperative Education and Development

Rural Cooperatives bimonthly magazine

Agricultural Cooperatives in the 21st Century

Organizing a Cooperative can take any where from 3 months to 2 years.  Good organizational efforts take place in 16 events:

Event 1:  Invite leading potential memer-users to meet and discuss issues.  Identify the economic need a cooperative might fulfill.

Event 2:  Conduct an exploratory meeting with potential member-users.  If the group votes to continue, select a steering committee.

Event 3:  Survey prospective members to determine the potential use of a cooperative. (Use of an outside advisor is useful in this step, such as the Northwest Cooperative Development Center.)

Event 4: Discuss survey results at a second general meeting of all potential members and vote on whether to proceed.

Event 5: Conduct an initial needs or use cost analysis.  Identify suitable markets, sources of supply and service providers and their requirements. Some ways to do this include:

Use previous research and industry common knowledge

Survey market, supply or service provider sources

Ask State and/or Federal offices, universities, Cooperative centers, commodity organizations, or private consulting firms to conduct the research and use their findings.

Event 6: Discuss resluts of the cost analysis at a third general meeting.  Vote whether to proceed.

Event 7: Conduct a feasibility analysis and develop a business plan.  "Vital Steps: A Cooperative Feasibility Study Guide" is available and use of an outside advisor is recommended for this step.

A feasibility study is an important analytical tool to show how a business will operate under a set of assumptions and within the proposed cooperative’s industry.

Information from the member survey and the initial cost analysis are used and expanded upon.

Components of a study might include project description and justification, industry background, marketing situation, outlook, and plans, operational and technical characteristics, financial statements, projections, and sensitivity analysis, and summary and recommendations. These will be contingent on the type of project.

Key actions:

Decide who will conduct the study

Develop sound and realistic project assumptions

Determine components for a comprehensive study

Assess the study

Accept or reject the study

Event 8:  Present results of the feasibility analysis at the fourth general meeting.  If the members elect to continue the process, the steering committee is instructed to arrange for incorporation and development of bulaws and other necessary legal papers. The feasibility analysis will then provide the foundation for the development of the business plan.

Event 9:  Prepare legal paers and incorporate.

Event 10:  Call a meeting of charter members and all potential members to review and adopt the proposed bylaws.  Elect a board of directors.

Event 11:  Convene the first meeting of the board and elect officers.  Assign responsibilities to implement the business plan.

Events 12 & 13:  Conduct a membership drive and acquire capital.  While many members may already be committed, the cooperative may seek other potential members to ensure there is enough for a successful business.  The feasibility study likely outlined sources of capital for the new cooperative. Membship stock shares, member equity contributions, loans and outside equity accumlations need to be accumulated.

Event 14:  Hire the manager (a critical task of the board of directors.)

Event 15:  Acquire facilities (follow business plan for land, facilities, equipment needed. Involve manager.)

Event 16:  Begin operations.

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Value Added Producer Grant

Thank you for your interest in the USDA, Rural Development Value Added Producer Grant (VAPG) program. Through the VAPG program, Rural Development provides grants to independent producers, agricultural producer groups, farmer or rancher cooperatives, and majority-controlled producer based business ventures for either planning or working capital activities.  VAPG grants enable viable agricultural producers to develop businesses that produce and market value-added agricultural products.  These grants help expand markets and increase financial return to the agricultural producer.

The main goals of the VAPG program are generating new products, creating expanded marketing opportunities, and generating a greater dollar return to the operation.  Below are a few highlights from the program:

The VAPG is an annual program with a national allocation.  For FY 2013, approximately $10.5 million in competitive grant funds are available.  Any FY 2014 program funds appropriated at a later date will be added to that made available under FY 2013 (see attached NOFA for further details).  Idaho does not receive any state allocation and all applicants compete nationally.  This year’s deadline for submitting applications is February 24, 2014 (deadline was extended through April 8, 2014, see attached extension notification).

Grants may be used for planning or working capital activities- applications cannot be for bothPlanning grants can be awarded up to $75,000 and working capital grants up to $200,000

Applications must meet applicant, product, and purpose eligibility requirements. 

There is a matching funds requirement.  Matching funds must be at least equal to the grant amount. In-kind contributions can be used for matching funds.

You can download the fact sheet that provides an overview for each eligibility category as well as the requirements for matching funds.  In addition to the fact sheet, the 2014 Notice of Funding Availability (NOFA) is available for download, which outlines the information required for a complete application.  Application templates and additional information are available on the National VAPG website at http://www.rurdev.usda.gov/BCP_VAPG.html.  

If you have any questions regarding this program or the application process, please call Timothy Wheeler at (208) 327-6463.  The Idaho USDA Rural Development Office's goal is to develop and submit as many quality VAPG applications from Idaho as possible, thus bringing more federal dollars to our producers.

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NW Cooperative Development Center

NWCDC is a nonprofit organization devoted to assisting new and existing cooperative businesses, from daycare centers to credit unions. 

NWCDC supports cooperatives in Oregon, Washington, Idaho and Hawaii.  Founded by cooperatives in 1979, the Center has grown into the Northwest’s leading provider of services for co-op business development.  They have a long history of collaborating with communities, governments, economic development agencies and other cooperatives, sharing expertise and building cross-sector support for new and existing cooperatives

They understand that when consumers, producers or workers become business owners of a cooperative, their individual and collective responsibilities greatly increase.  New owners face significant challenges to organize, get started and stay on track with a new cooperative business. 

To help with these challenges, NWCDC provides facilitation, advising, analysis and access to information and tools for cooperatives.  Their predevelopment work with startups helps to build business ownership, sound management practices, and economic health.

NWCDC is an active member of the National Cooperative Business Association (NCBA), and CooperationWorks!, the cooperative development network.

Some of their resources about starting co-ops include:

Co-ops 101: An Introduction to Cooperatives, U.S. Dept. of Agriculture, Cooperative Information Report 55, Revised November 2012

Steps to Start a Co-op, NWCDC, December 2006

Creating a Shared Vision, NWCDC, June 2006

Deciding How to Decide, NWCDC, March 2006

Committee Charters, NWCDC, February 2006

Effective Meetings, NWCDC, March 2006

Facilitation, NWCDC, April 2006

Consensus, NWCDC, April 2006

Meeting Minutes, NWCDC, March 2006

SWOT for Co-ops, NWCDC, July 2006

Fundraising, NWCDC, April 2006

How to Start a Co-op, U.S. Dept. of Agriculture, Cooperative Information Report 7, Revised September 1996

Northwest Cooperative Development Center

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Last modified on Wednesday, 09 April 2014 10:49

Contact Info

for assistance please contact:

Ida-Lew Economic Development

 

Phone: 208.983.8302

Address:

300 W. Main St. Ste 201

Grangeville, ID 83530

info@ida-lew.org

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