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Organic Valley
Cooperative...
The Original Organic Farmers Co-op
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| The Fair Trade Report series |
by Ruth Ann Smalley
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"In the conventional
model," says Jim Wedeberg, founding member of Organic Valley
Cooperative, "the farmer gets what's left after everybody else has
taken their profits out of the food." In many cases, that is
surprisingly little. For example, the U.S. Department of Agriculture
found that of the $1.99 charged for 5 lbs. of flour at a chain grocer,
the farmer typically gets 48¢. Of the $2.99 charged for 2 lbs. of
carrots, 74¢ goes to the farmer. For a $2.79 pound of bacon, the
farmer sees about 38¢ (National Farmers Union).
Organic Valley offers a different model, in which the "farm gate" level
price is the starting point in determining what the farmer is paid, and
then the cost of getting the product to the marketplace is added to
that. This emphasis on a fair price, and on a democratic
decision-making role for the farmers, makes Organic Valley an example
of domestic Fair Trade in action. And it is no coincidence that this
cooperative was instrumental in the formation of the Domestic Fair
Trade Association.
The original cooperative was founded in 1988, by seven farmers in
Wisconsin, who came together as CROPP-- Coulee Region Organic Produce--
to "pool our product in a cooperative fashion." Initially the products
were organic vegetables, but dairy was added soon after. As the
cooperative grew and farmers joined from outside the Midwest, the
product line steadily increased. Eggs were added in 1993, meat in 1999,
orange juice in 2001, soy beverages in 2004, and hay and grains in
2008. CROPP now stands for Cooperative Regions of Organic Producer
Pools, and the regional aspect is very important to the co-op's vision.
Even though there are farms in 34 states, products like milk are
marketed regionally whenever possible.
There are now 1,398 member farmers, which, according to Organic Valley,
"represents 10% of the organic farming community in America." Included
are about a thousand dairy farms and 80 egg farms, operating on a much
smaller scale than is common in industrial agriculture. The average
herd size is 76 cows, compared to hundreds or thousands. Egg farmers
average 4,500 birds, compared to the 100,000–250,000-bird chicken farms
of large producers. Besides working to keep prices stable for farmers,
the cooperative also offers educational resources to members, and
shares a great deal of technical information to help farmers interested
in making the shift to organic. Their organic standards are stricter
than those required for certification, and their website offers
material to help farmers and the general public understand organic
principles. Through their "Generation Organic" program, they encourage
young people to pursue careers in farming, with school programs,
mentors and internships.
This is important, as the independent farmer population is dwindling
and aging. "Large corporations have taken over 600,000 family farms
since 1960," the site informs us. CEO George Siemon predicts that, "if
current trends continue, this year we may lose up to 20,000 of our
nation's remaining 60,000 dairy farms."
These figures are especially alarming, in light of a recent studies by
the USDA and The Cornucopia Institute, which found that "organic
manufacturers and farmers are facing escalating competition from large
conventional food manufacturers entering the organic market, and
companies are increasingly looking to China and other countries to
import organic foods and ingredients." In some cases, these
conventional manufacturers also buy out smaller organic companies,
gradually diluting the products and selling them under the misleading
label of "natural," rather than organic.
In the bigger picture, Organic Valley Cooperative is trying to create a
business model that enables American farmers to pursue their livelihood
in a marketplace dominated by the corporate model. David Korten's
descriptions of the differences between capitalist and market economies
are worth pondering here. In his book, When Corporations Rule the
World, he writes that a "capitalist economy is characterized by
concentrations of monopoly power, financial speculations, absentee
ownership, public subsidies, the externalization of costs, and central
economic planning by mega-corporations."
On the other hand, Korten argues, a "true market economy features
human-scale enterprises, honest money, rooted local ownership, and a
framework of democratically chosen rules intended to maintain the
conditions of efficient market function--including equity and cost
internalization" (p.104). Organic Valley's regional producer pools,
united by a clear, democratic, organizational structure and strong
organic principles, definitely look like a market economy institution.
These cooperative values seem more likely to serve us in the long run
than the corporate institution's characteristics, as we struggle with
the aftershocks of the past year's economic downturn.
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References
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Cornucopia
Institute, http://www.cornucopia.org/2009/06/usda-report-indicates-american-organic-farmers-being-sold-out/
National Farmers Union, http://nfu.org/issues/agriculture-programs/resources/farmers-share
Organic Valley Cooperative, www.organicvalley.coop
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