When they think of cooperatives, Americans may think of hippies and brown rice, granola, and food co-ops like the Brattleboro Food Co-op, in Vermont, and the Flatbush Food Coop, in Brooklyn, New York. Israelis tend to think first of Kibbutzim and Moshavim, the collective farms of the early days of the Yishuv and the State of Israel that have evolved into corporations. Eastern Europeans may think of the Kolhoz, the collective farms of the failed Soviet state.
The Brattleboro Food Co-op started in 1975 as a small buying club. Today it has 4,000 members and uses a 16,000 square foot space for a supermarket and cafe. These are open to members and the public. I personally, can vouch for the quality of the food and other merchandise. Many members work one or more hours per week. All members enjoy a discount at the cash register. Similarly, the Flatbush Food Coop in Brooklyn, started in 1976, is open to members and the public, and offers discounts to its 3,000 members, many of whom work at the co-op. New members are welcome to both. Other than a nominal fee, there are no membership requirements. Both sell fresh local organic produce, meats, grains, dairy products, brown rice and granola. They also sell a variety of natural cosmetics and personal hygiene products. (For information on food coops, check the Coop Directory Service.)
Because of the understanding that natural, minimally processed, local foods, cosmetics, and wellness products are healthier for the individual and better for the community than corresponding products with large amounts of artificial ingredients, preservatives, coloring agents, sugars, and other additives, food co-ops generally offer a wider selection of organic foods, whole grains, and natural products at a better price and a lesser selection of processed foods compared to what can be found in investor owned stores. As Wendell Berry put it, in supermarkets, “bread [is] merchandise that is high in money value but low in food value.” Food co-ops sell food that is high in what Berry would consider food value as well as money value. This is summed up by the authors of the Flatbush Food Coop’s “Product Line Principles”.
- We strive to provide products that are:
- Organically grown.
- Minimally processed (and packaged).
- Locally grown whenever possible.
- Safe to ourselves and whos production is not harmful to the environment.
- Purchased from other cooperative businesses whenever possible.
- Of the highest quality and fairly priced.
- From companies that are socially responsible (i.e., are not knowingly engaged in unethical, illegal, or environmentally unsound practices).
These are similar to the principles of the Brattleboro Food Coop, BFC, which exists to meet its shareholders collective needs for:
- Reasonably priced food and products with an emphasis on healthy, locally grown, organic and fairly traded goods
- A welcoming community marketplace
- A regenerative business that has a net positive environmental impact
- A strong local economy
- Relevant information about food and related products, the environment, and the Cooperative Values and Principles
- Reasonable access to participation in the cooperative.
It may not be obvious from these principles or from the ambience of a typical food co-op, but cooperatives are businesses. As Brattleboro Food Co-op board member Will Keyser, at StartUp Owl, put it, “though we exist for our community, we have a duty to make a reasonable return (or we like any other company, will go bust).” The simplest definition of a coop, from the Coop Directory Service, is “any voluntary organization composed of a group of individuals … formed for their mutual … benefit.”
In addition to food co-ops, which resemble investor owned and for-profit food stores, there are insurance co-ops, such as NJ Manufacturers, which resemble investor owned insurance companies, but provide their members with better service, credit unions, such as United Teletech and Pentagon Federal Credit Union, PenFed which resembles investor owned banks but provide their members with better service, health care co-ops, which resemble for-profit and not-for profit hospitals and health maintenance organizations but provide their members with better service, energy co-ops, which resemble investor-owned utilities but provide their members with better service, and other types of co-ops, which resemble for-profit enterprises in other areas of the economy, but provide their members with better service.
A Brief History of Co-Ops.
The first co-op in the United States was a fire insurance cooperative formed by Benjamin Franklin in 1752; 24 years before the Declaration of Independence was signed and 35 years before the Constitution was ratified. (See Citizen Ben on PBS). On Dec. 21, 1844, 94 years later, a group of 28 craftsmen in Rochdale, England, set up their own store to buy foods they could otherwise not afford, including butter, sugar, flour, oatmeal.
The crop failure and famine of 1846 in Germany led Herman Schulze-Delitzsch to organize a cooperatively-owned mill and bakery to sell bread to its members. In 1850, Schulze-Delitzsch organized the first cooperative credit society. Fourteen years later, in 1864, Freidrich Raiffeisen formed the Heddesorf Credit Union to help farmers purchase equipment, seeds, and livestock.
In 1909, Alphonese Desjardins, a court reporter in Quebec, helped form St. Mary’s Cooperative Credit Association in Manchester, New Hampshire, the first credit union in the United States. Desjardins had prior experience organizing credit unions. In 1900 he organized La Caisse Populaire to enable people pool their funds and borrow from themselves rather than loan sharks.
At about the same time, Edward Filene, founder of Filene’s Basement, and Pierre Jay, the Massachusetts Banking Commissioner, lobbied for the Massachusetts Credit Union Act, which passed on April 15, 1909, and was to serve as the basis for credit union laws in other states and the Federal Credit Union Act, signed by Pres. Roosevelt in 1934. In 1920, Filene hired Roy Bergengren, a poverty lawyer, to manage the Massachusetts Credit Union Association. By 1930 there were 1,100 credit unions in 32 states. As of 12/31/2008, There were 7,806 credit unions with over $812 Billion in assets. The biggest may be The Pentagon Federal Credit Union, “PenFed.” Founded in 1935, PenFed today has over 973,017 members world-wide and over $14 Billion in assets.
More details on Credit Unions can be found on the pages of the National Credit Union Administration, NCUA, “History of Credit Unions.”
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Popular Logistics Series on Co-ops.
L Furman, Popular Logistics, 6/21/12, Part 1: Co-Ops 101: More than Brown Rice, Granola, and Honey.
L Furman, Popular Logistics, 6/23/12, Part 2: Co-Ops 102: Credit Unions.
Some of the thinking underlying these posts was developed in my work as a student in MBAS 618, “Finance III, Forms, Equity, and Organization,” in the MBA for Managing for Sustainability at the Marlboro College Graduate School in Brattleboro, Vermont. For additional information or original research contact me at L Furman 97 “at” gmail . com.