H to How t Establish E t bli h a Cooperative C ti 3rd Annual USDA Outreach Conference Virginia State University Petersburg Virginia Petersburg, March 18, 2010 Bill Brockhouse USDA/Rural Development Cooperati e Programs Cooperative Washington, DC Purpose • What Are Cooperatives? • Advantages and Disadvantage • Development Steps 2 What Is A Cooperative? A business • Owned and democratically controlled by the people who use its services q y to them • With benefits distributed equitably based on use 3 What Is A Cooperative? Purpose • Obtain market access or broaden market opportunities p product p or service qquality y • Improve • Reduce costs (purchasing) 4 What Is A Cooperative? Extension of grower’s farm • Cooperative enhances farming operation • Growers own their cooperative. • Lack of support for the cooperative means failure. 5 Advantages of Cooperatives      User members drive business User-members Patronage-based benefits Market access Capital pooling Structure - Easy for large numbers of members to use Disadvantages of Cooperatives  Members have to give up some independence  Time to develop  Group decision-making  Everyone y needs to commit to the cooperative p  Voting board members have to be producers  B d v. manager responsibilities Board ibiliti Cooperative Development Steps • Meeting to define economic need/opportunity • Exploratory meeting – Potential members – Steering committee/leadership – Education Ed ti about b t cooperatives ti • Survey potential members 8 Cooperative Development Steps • • • • • Feasibility study Business plan p Legal documents Business startup Board education 9 Bill Brockhouse U.S. U S Department of Agriculture Rural Development Rural Business Business-Cooperative Cooperative Service Cooperative Programs Washington, DC bill.brockhouse@wdc.usda.gov Phone: (202) 720-2021 720 2021 10