By Jake Stukenberg, NFU Intern

Cooperatives have proven to be one of the most beneficial business models, particularly in rural areas where certain services or products would be unavailable to residents. Services, such as credit unions, cooperatively owned grocery stores, and community organized farmers markets, can provide not only services to a community, but job opportunities as well.

Grocery stores are a staple in small towns, but the prices are usually much higher than they are in urban areas due to the cost of shipping to remote areas, the diversity of products is generally much more limited, and accessibility is often low since many independent grocers haven’t been able to compete with superstores like Walmart and Target. One way that individuals can support local businesses and have a say in the available products is investing time or even taking on a full-time position in worker-owned groceries such as Hy-Vee.

Hy-Vee, a employee-owned grocery chain with 240 stores across the Midwest, allows full-time, and sometimes part-time, employees to have a stake in the company. Officers, store directors, and executive staff are direct stockholders, while more than 30,000 other employees who take part in The Hy-vee and Affiliates 401(k) Plan are indirect stakeholders.

Employees also have the opportunity to suggest different services or products to be offered in their respect stores to best benefit those in their communities. They even have a say in how items in the store are displayed and priced.

Recently, Hy-Vees in Marshalltown, Pella, and Bondurant, Iowa, began donating meals, food, and drinks to those affected by recent tornados that tore through Iowa. They partnered with American Red Cross to set up distribution centers in their parking lots. As stated in a recent press release, they will be providing “more than 111,000 bottles of water…1,600 cases of dried meat snack products and more than 70,000 snack and protein bars from its Marshalltown Hy-Vee Parking lot.” This shows how dedicated those who organize Hy-Vee are to their communities.

Another cooperative business that greatly benefits rural communities are credit unions. Credit unions are customer-owned, and provides members with lower interest rates on loans, reduced fees on transactions, and higher savings rates. Farmers and ranchers often rely on credit unions, one of the most well known being the Farm Credit System.

As discussed in the previous post on the Beginning Farmer Forum, Farm Credit is a system of 73 customer-owned lending operations with the mission of “supporting rural communities and agriculture with reliable, consistent credit and financial services, today and tomorrow.”

Farm Credit provides very competitive loan rates for beginning farmers. In 2016, Farm Credit granted 57,000 loans to producers under the age of 36, totaling $9.2 billion. They also granted 74,000 new loans to farmers with fewer than 10 years of experience. Even though Farm Credit was created by the U.S. government, they do not receive federal funding, which makes their honest mission and values to working with agriculturalists even more notable.

Yet another type of cooperative that many communities rely heavily on is local electricity cooperatives. Before electricity was readily available, many farmers and ranchers lit their homes with lanterns and candles when necessary. When rural communities rallied enough support around the cause of expanding access to electricity, President Franklin Roosevelt signed an executive order creating the Rural Electrification Administration (REA) in 1935.

After the Rural Electrification Act was passed, the REA faced problems with privately owned utility companies using federal funding to sparsely populated areas. When farmer cooperatives began applying for loans to build this infrastructure, the REA knew that the cooperative business model was best suited to carry out their duties.

Since the establishment of these consumer-owned cooperatives, farmers, ranchers, and communities across the nation enjoy full access to electricity. According to the National Rural Electric Cooperative Association, electricity distribution, generation, and transmission cooperatives power 56 percent of the nation. These cooperatives were made by the people, for the people, and holds true to their mission to serve rural communities for years to come.

What other cooperatives have benefited your rural community? Share those stories in the comment section below.


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