1. What is a Co-operative and how can it be used for Local Food? Eastern Ontario Local Food Conference: Innovation Driving Local Food

2. Overview 1. What is a Co-operative?2. Why form a Co-operative? 3. Canadas Co-op System 4. Starting a Co-op 5. Co-op Organizational Structure 6. Agricultural Co-operatives7. Co-operative Solutions for Local Food 3. What is a Co-operative? An autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democraticallycontrolled enterprise. 4. Why form a Co-operative? Market Access and Import Substitution Risk Management Growth Strategy Pool Resources and Knowledge Asset Utilization Distribution Channels Product Commercialization Land Investment Scale up, increase efficiencies, reduce costs & risk Better Bottom Line and ROI 5. Co-operative Principles International Co-operative Principles 1. 2. 3. 4. 5. 6. 7.Voluntary and Open Membership Democratic Member Control Member Economic Participation Autonomy and Independence Education, Training and Information Sharing Co-operation Among Co-operatives Concern for Community and EnvironmentEstablished in 1995 by the International Co-operative Alliance 6. Co-operative Values Co-operatives are based on the values of: self-help, self-responsibility, democracy, equality, equity and solidarity In the tradition of their founders, cooperative members believe in the ethical values of honesty, openness, social responsibility and caring for others 7. Comparing Co-operatives with Corporations Co-operative CorporationsBusiness Corporations Exist to meet members needs, as defined by members Exist to maximize shareholders wealth Limited Return on Capital Unlimited Return on Capital Accountable to all members Accountable to majority shareholders One member one vote Vote based on shares held Board represents members; 80% of directors are elected members Board represents shareholders; outside directors often appointed Shares generally not traded Shares may be traded Limited Liability Limited Liability Operate in a variety of sectors Operate in a variety of sectors 8. Co-operative Membership in Canada 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0%Percentage of Total Population 2009 9. Co-operatives in Canada Canadas 9,000+ co-ops and credit unions have combined assets of approximately $330 billion Co-ops and credit unions have 18 million members and employ over 155,000 people > 1,300 agricultural co-ops > 650 retail co-ops 10. Co-operatives in Ontario More than 1,300 co-ops and credit unions Over $30 billion in assets More than 1.4 million individual members Second to Quebec for highest number of non-financial co-ops 11. Starting a Co-op 1. 2. 3. 4. 5. 6. 7. 8.Identify a real opportunity to serve peoples needs better. Begin to work with others who are committed to the idea. Investigate the financial and market feasibility of your idea. Write (or hire a consultant) a comprehensive business plan. Determine the organizational structure. Incorporate the co-operative. Recruit and educate members. Raise the necessary start-up capital, including member investment, outside investors and lenders. 9. Organize the first General Membership Meeting and elect the first Board of Directors. 10. Open for business. 12. Co-op Organizational Structure MembersAuditorBoard of DirectorsLawyerExecutive CommitteeFinance CommitteeFundraising CommitteeOperational StaffBoard of Directors make decisions on behalf of the membership, in the best interests of the co-opMarketing CommitteeGeneral ManagerOperational StaffCo-op Members elect Board members at the Annual General MeetingOperational StaffNominations CommitteeOperations CommitteeGM is responsible for the day-today operations & works together with the board & staffOperational StaffOperational StaffStanding Committees with members who meet regularly 13. Agricultural Co-ops - Sectors Retail Food & Pre-order Groups Livestock: Beef, Emu, Lamb, Pork, Poultry Produce: Cheese, Dairy, Fruit, Vegetables, Mushrooms Retail /Wholesale Farm Supplies Marketing Feeder Finance Energy (including renewable) Local Organic Food Co-ops 14. Agricultural Co-ops - Examples Vineland Growers Co-op, Jordan Station: Over 300 fruit growers. Canadas largest grower & shipper of fruit. Agris Co-operative Ltd, Chatham: Farm supply and grain marketing. Founded in 1921. Agris Solar Co-op, Oakville: Solar PV systems. Over 1,000 land owners and farmers. Common and Preferred Share investments. 15. Agricultural Co-ops Examples Gay Lea Foods Co-op, Mississauga: Processing and marketing dairy products since 1958; 1,200 members (1/4 of Ontario dairy farmers). AG Energy Co-op, Guelph: Canadas largest farm energy co-op providing 50% of natural gas used by Greenhouses and 1/3 of farm electricity in Ontario. 16. Benefits / Challenges of Co-ops Benefits: Co-operative structure is proven and flexible Democratic: One member = one vote Ag Co-op survival rate is 52% vs. 22% for corps. Patronage dividends are paid out of co-ops pretax income and recorded as co-op expense Farmers are required to report patronage dividends as earned income and can be deferred (if not cash) Knowledge and resource sharing 17. Benefits / Challenges of Co-ops Challenges: Farmers are very independent people Co-operation and democracy takes time and effort Members need to align their self-interest with the best interests of the co-operative Members receive benefits and also have responsibilities to fulfill Requires compromise and conflict management 18. Co-operative Solutions for Agriculture Moving up the value chain Farm succession: Reduces barriers to entry for young farmers and an exit for retiring farmers Land and asset acquisition Environmental solutions Community development and lowering social isolation Building sustainable farms and businesses 8 out of 10 Canadians support co-ops over large corporations 19. Co-operative Solutions for Local Food Local Organic Food Co-ops 1.Bringing local farmers and eaters together directly.2.Growing and supplying fresh, healthy food locally.3.Keeping money in the community.4.Trading fairly.5.Saving energy, building the soil, and protecting water.6.Celebrating good food, culture and community.