The National Council of Farmer Cooperatives (NCFC) is a national association representing America’s farmer cooperatives. There are nearly 3,000 farmer cooperatives across the United States whose members include a majority of the nation’s more than 2 million farmers, ranchers, and growers. These farmer cooperative businesses handle, process, and market agricultural commodities and related products, furnish farm supplies, and provide credit and related financial services. Earnings from these activities are returned to their members on a patronage basis. Farmer cooperatives also provide jobs for nearly 300,000 Americans, many in rural areas, with a combined payroll greater than $8 billion.
NCFC was established in 1929, the beginning of the Great Depression. Was the NCFC able to stay on course with its original mission and how much did the Great Depression affect NCFC in its formative years?
Charles Conner: One important fact to remember is that by 1929, agriculture had already been in a depression of its own since just after the end of the First World War. In fact, in 1930, according to the Bureau of Agricultural Economics, farm prices were lower than they were – in real terms – in 1910. And the response to that, to help farmers survive this period and ultimately succeed in the marketplace, was really what drove the rise of farmer co-ops through that decade, from the passage of the Capper-Volstead Act in 1922 to the creation of the National Chamber of Agricultural Cooperatives, which later changed its name to NCFC in 1929.
So, the 1930s themselves were more about taking stock of what the cooperative system had accomplished to that point, responding to the dramatic changes to production ushered in by the New Deal, and setting a course for success in the years ahead.
Can you describe the history and role of cooperatives in the United States prior to the establishment of the USDA, and how, if at all, this role has changed?
Farmer co-ops in the United States really grew up in tandem with the USDA. The first American co-ops tended to be mutual insurance companies; in fact, Benjamin Franklin started one in Philadelphia in the late 18th century.
The early part of the 19th century saw a few farmer co-ops develop, scattered across the U.S., but the growth really picked up just a few years after USDA was formed with the end of the Civil War and the rise of Granges, which emphasized the formation of co-ops.
And this connection between the creation of USDA and the rise of farmer co-ops is in some ways natural; after all, the mission of both co-ops and USDA is to meet the needs of farmers and ranchers.
Looking back over the years, what do you consider to be the biggest contributions made by co-ops to America and the world?
Many Americans take for granted the enormous bounty of food that we enjoy here. The United States has been able, for all intents and purposes, to banish widespread famine from our shores. We have accomplished this with the hard work of farm families over the past 100 years who built the modern food and agriculture system we have today. Farmer co-ops have played an absolutely essential role in achieving this, in ensuring that those same producers have a stake and competitive voice in the marketplace.
Globally, the contribution of co-ops is, and will be, similar. The United Nations estimates that by 2050, there will be 9 billion people on Earth in need of food, clothing, and fuel. Meeting this demand is one of the great challenges facing agriculture, and farmer cooperatives will play a lead role in feeding a growing world.
American agriculture is the envy of the world. How did we get there and how do we continue to lead the world?
First off, none of what American agriculture has achieved, what American farmer co-ops have achieved, would have been possible without the hard work of generations of farmers, their families, and their employees. Beyond that, the key to our success has been the willingness to adopt new technology, new tools, and new techniques to help boost productivity using less labor while still being good stewards of the land.
Going forward, we need to make sure that farmers and ranchers continue to have access to the tools they need to keep them productive and competitive in the global marketplace.
What do you consider to be the most significant challenges agricultural cooperatives will face in the future?
The challenge for agricultural co-ops is the same one being faced by their farmer owners, or by just about any business in this economy – namely, making sure that the co-op is strong enough, flexible enough, and innovative enough to compete in a marketplace where customer demands and preferences can change very rapidly, as can commodity prices, input costs, and so forth. Farmer cooperatives in general have met this challenge exceedingly well, and that is why they have been a bright spot in the economy over the past couple years.
NCFC actively engages in a variety of public policy issues that directly affect agricultural cooperatives and their farmer/rancher members. What are some of the most pressing legislative and regulatory issues NCFC faces?
One of the distinguishing features of NCFC’s work on public policy is the breadth of issues that impact co-ops and their members.
Top of mind for anyone in agriculture right now, of course, is the upcoming farm bill, and NCFC and our members are directly engaged on the issue. At the same time, an awful lot of other public policy also impacts farmers and their members. For our dairy co-ops, fruit and vegetable co-ops, and their members, an issue like immigration and ensuring an adequate, skilled, and dependable agricultural labor force is very important.
We are also engaged with the Commodity Futures Trading Commission [CFTC] as they write the rules to implement the Dodd-Frank financial reform act; many farmer co-opsuse the futures markets not only to hedge their own risk, but also to offer targeted, customized risk management tools to their members.
Finally, one issue that always comes up, no matter where I go around the country, is the amount of regulations that seem to be coming out of federal government agencies at an unprecedented rate. Now, farmer co-ops realize that there are necessary and needed regulations, and even if they add cost to our business, we recognize why they are needed. Too many times, though, the regulations do not seem to make any sense, do not seem to be addressing a real concern, and do not seem likely to accomplish much of anything. One good example was actually cited by President [Barack] Obama in his State of the Union address – the Environmental Protection Agency, until they recently reversed course, was going to regulate spilled milk the same as an oil spill. We need to work to ensure that regulations are needed, that they are based in science, that they have a chance to fix the problem being targeted, and that their costs do not outweigh the benefits.
What recommendations does NCFC promote for the next farm bill to strengthen the nation’s farmer cooperatives?
Over the past two years, NCFC has gone through a member-led process to identify farmer co-op priorities for the upcoming farm bill; we had broad participation from across our membership and it included both co-op management and producer board members. Throughout the process, four key themes emerged as priorities for farmer co- ops: promoting the importance of farmer co-ops to [ensure] that farmers have a stake in the marketplace beyond the farm gate; supporting a responsive safety net, together with adequate funding, that incorporates improved, comprehensive risk-management tools for producers and cooperatives; expanding U.S. agriculture exports and global competitiveness including through substantially improved access to foreign markets through programs such as USDA’s Market Access Program; and ensuring that farmer cooperatives remain eligible to participate in federal programs for the benefit of their farmer members.
A complete version of the NCFC farm bill framework can be found on our website at ncfc.org.
Faced with 2012’s complicated budget realities – further underscored by the failure of the congressional “supercommittee” to come up with a budget compromise and mixed agricultural lobbying groups – what direction is the financial situation headed?
I believe that the budget deficit, getting spending more in line with revenue, is one of the great challenges facing our country as a whole over the next decade or two. Over the long term, if we want strong, sustainable economic growth, America just cannot keep running the budget deficits we have been in the past couple of years.
Now, agriculture has always been willing to do its part when called on to help reduce the deficit in the past. After all, most farmers and co-op managers I know realize that if they ran their farms or their co-ops the way the government was run, they would be out of business pretty soon. But at the same time, agriculture should not be targeted for cuts out of proportion to its impact on the budget – commodity programs, conservation, research, and rural development all make up about one-half of 1 percent of the federal budget, so obviously you cannot balance the budget on the back of agriculture alone.
What are some of the benefits to local economies and the economy at large delivered by co-ops?
You can’t talk about the economy right now without talking about jobs, and farmer co-ops have a great story to tell about employing over a quarter of a million Americans directly and supporting hundreds of thousands of other jobs across rural America as well.
Most important, though, is the role that farmers play in the life of the communities where they operate. Whether it’s sponsoring the local little league team, helping their neighbors rebuild after natural disasters, or supporting programs to eliminate hunger across America, farmer co-ops are active in giving back. Supporting farmer co-ops means building stronger communities and a stronger America.
NCFC recently grouped with the Agricultural Retailers Association (ARA), the Agricultural and Food Transporters Conference (AFTC) of the American Trucking Associations, and The Fertilizer Institute (TFI) to support legislation that would clarify critical transportation regulations that are key to the agricultural sector’s ability to expeditiously distribute farm supplies. What are the benefits of this legislation?
For agriculture, the biggest benefit of the transportation bill is that it includes a limited exemption of what are called “hours of service requirement.” What this will do is to ensure that co-ops are able to supply their members with the fertilizer and other inputs needed in a timely manner during the very busy planting and harvest seasons.
Farmer cooperatives are significant players in the nation’s efforts for energy independence and are vital to ensuring that producers are able to capitalize on expanded market opportunities; ethanol, biodiesel, and manure conversion, along with conservation, are important tools in securing a more affordable and accessible domestic renewable energy supply. What actions does NCFC have in place to support an energy policy that maximizes a role for American agriculture and farmer cooperatives in energy independence?
Farmer co-ops are vital players in this country’s quest for energy independence and in ensuring that producers are able to capitalize on expanded market opportunities; as such, NCFC supports an energy policy that maximizes a role for American agriculture and farmer co-ops.
In particular, we support a consistent and reliable policy of renewable fuels incentives and other provisions encouraging production of renewable fuels. New approaches to federal investment in the industry should encourage innovation and market stability. One important aspect of this approach is supporting policies that promote the development of technologies to further utilize manure as a feedstock to produce gas, fuel, or electricity.