Quebec is no exception.

The answer in many rural parts of the province is health co-operatives.

The model was designed to relieve the overtaxed provincial health care system by meeting several first-line needs. But it hasn’t been — and still isn’t — an easy go.

I spoke with Amy Goodall-Tolhurst, founder of the Ici Santé health co-op, and Robert Brault, board president of the Co-op Ici Santé, about how this model of health care came into existence, how the co-op works and the services — and hope — it offers rural residents.

The beginning

As far back as 1998 Goodall-Tolhurst had been working with a health care program started through Howick United Church in Howick, Que., called parish nursing.

But as demand for health care in the region was getting larger due to an aging and growing population, “We got to a point after 10 years where the service needed to grow,” she recalls.

“We needed to offer more hours but as is often the case, we didn’t have enough money to cover the demand.”

While Goodall-Tolhurst was spending 16 hours a month on parish nursing, she also took a part-time job at a private medical clinic in Châteauguay, Que., about a half hour away. This type of health care setting provided insight on how that type of organization worked and what the challenges and expectations were.

“I said, okay, we need to try and combine something here, because people need the services. Some are willing to pay and for some it can be covered by their insurance. How do we make it all happen?”

In the early 2000s, she explored the model of health co-ops in surrounding municipalities to learn about how it might be applied in her region.

In 2012, the municipality of Howick conducted a study as part of its municipal family policy to explore how they could better support seniors and families. Subsequently, the embryonic Howick health co-op set up a meeting with local businesspeople, mayors and the local representative for Quebec’s national assembly, who was a major champion of the initiative. They set up a provisional committee and met every two weeks for two years. The committee also travelled around the province to learn from various established co-ops.

“We follow the standard model for health co-op development established by the regional co-op development organization, but you really have to adapt to where you live and what the needs are,” she says.

The structure

The Co-op Ici Santé (loosely translated as “health here”, meaning health care customized for the region) operates from two service centres (Saint-Louis-de-Gonzague and Howick) and counts 2,000 members.

Quebec health co-ops are grouped under the Fédération québécoise des coopératives de santé (Quebec Federation of Health Co-operatives). The FQCS has existed since 2018, and its 40 co-operative members are focused on filling the unmet needs of rural health services through preventative and curative first-line health care.

The provincial group of co-ops is made up of approximately 350 doctors and nurses and dozens of health professionals with expertise in physical and mental health.

To receive care at Ici Santé a patient is required to pay a one-time member fee of $10 which gets them a share in the co-op for life.

The patient is also supposed to pay an annual fee of $125. “This is where we need to adapt to our clientele,” says Goodall-Tolhurst. “Paying an annual fee enables the co-op to have an operating budget, but it has required a lot of persistence to get people on board with this. Those with fewer health issues interpret this fee as an expensive blood test. Well, maybe it is, but these are building blocks for the future of the co-op.”

Brault adds, “If you offer a service you have to hire the personnel regardless, whether there are two people or 10 who show up. That’s the reason for membership: it’s like an insurance. It costs $125 and maybe today you just need a blood test, but maybe tomorrow morning you might need a nurse to visit you at home. So, they have to understand that we have to hire that nurse and pay her no matter what.”

Goodall-Tolhurst says that the board chose to develop services progressively and carefully because “we cannot commit to things that we cannot do.”

Currently, she says the two big areas of health care that need to be addressed in the region are with young families and senior citizens. “Generally, everybody in between can cope with an emergency room or take action to improve the issue. They might not need it seen to immediately, as long as they can still function.

“It’s the parents who aren’t getting any sleep at night because their kid is crying, and it’s the seniors whose families become anxious because they’re worried or unable to be present for their parents. We want to support our seniors in their homes and accompany our young people as they navigate their roles as parents.”

She says the fit also has to work for health professionals. “Each professional has different strengths which brings a rounded dynamic to the team. And people raised in a rural setting often identify with the challenges of access to health care. For example, there was a nurse who felt she didn’t fit in an urban setting because she valued the rural life she grew up in and so she made the move to one of our co-ops.”

The benefits

Many local doctors refer their patients to the Co-op Ici Santé because a patient will get an appointment quicker than in the public system.

“Some doctors will call and say, ‘Listen, I’ve got an emergency here. I need to have this done right now.’ We will do our best to help the doctor get the patient taken care of,” says Goodall-Tolhurst.

Doctors who work in Quebec’s relatively newly established Groupes de médecine de famille (family medicine groups) enjoy what that organizational structure offers. By grouping together, administrative tasks are taken care of for them by government allocation. However, there are also obligations with this structure.

“Our approach is similar,” says Goodall-Tolhurst. “We aim to take the burden of administration and bureaucracy off the doctors’ backs so that they can do what they do best: provide care.”

Services offered at the Co-op Ici Santé consist of everything from blood samples to foot care; vaccinations to ECGs; tick, stitches and bandage removal; cryotherapy and much more.

A local resident can call the co-op one day and usually have an appointment the next.

One of their most important services is consultation. “The public system is difficult to navigate. If patients come to us with something we cannot address then we’ll work through their options to help them make the best decision,” says Goodall-Tolhurst.

The future

Goodall-Tolhurst, who has occupied all roles within the co-op — board of directors, administration, nurse, resource person — now occupies more of “a position with a title” rather than an active role because she sits on the federal board of co-operatives. She brings information from the provincial level back to the local co-op and feeds federal and provincial governing bodies information about what’s happening locally on the ground, such as what needs are required and where.

The biggest challenge is funding.

This is where Goodall-Tolhurst says they fall through the cracks. “We’re not a charitable organization, we’re a not-for-profit co-op. This combination excludes us from many grant opportunities. Historically, community investment is how our entire province’s health care system started: little villages encouraged people to sign on as members to build their hospitals. Businesses were solicited for donations. But currently, people are stretched very thin in terms of what they can afford.”

Brault says he knows that complementary services like theirs are helping to take the burden off the “big” health care system. “There’s 900,000 people on a waiting list to see a specialist in Quebec. So, there’s a place for complementary services.

“While we’re not able to offer all the services of a hospital, we can offer followups so that someone doesn’t have to sit in an emergency room for 12 hours for, say, stitch removal,” he says.

Goodall-Tolhurst experienced firsthand how important access to a local health co-op can be. “We have been told on several occasions that one blood test saved a life. In our case, my husband was able to receive timely treatment for prostate cancer thanks to early detection with a PSA test and he is now cancer-free.

“My goal when starting Ici Santé was to ensure the type of care I want to receive when I’ll need it. A co-operative model enables the clinic to improve their team approach at a local level. Our rural health co-op prioritizes its members.”

The post Rural health co-ops give a boost to Quebec’s struggling health care system appeared first on Country Guide.

Because Chris Bodnar loves soil, growing crops, the cycles of weather and seasons, it wasn’t a big surprise when, a dozen years ago, he decided his future was farming. Unfortunately, big barriers stood in the way of this 20-something. Since Bodnar wasn’t raised on a farm, he had no one’s bootsteps to follow in, and no opportunity to inherit land.

Even more challenging, his location of choice was B.C.’s Lower Mainland where prices on two- and three-acre parcels of ALR farmland routinely top $2 million.

In fact, Bodnar would still be dreaming rather than doing if not for one huge ace in his pocket: the farm co-operative movement.

Thanks to the investment of about 50 co-op members, Bodnar and his wife Paige Dampier have spent the past 11 years growing premium organic vegetables and berries for direct-to-consumer sale on 50 prime (i.e. “expensive”) Fraser Valley acres.

Members have access to the farm for a one-time membership investment of just $5,000.

To anyone who has scrimped and saved to purchase or lease farmland, Bodnar’s arrangement sounds almost too good to be true. Yet he now believes agriculture needs to take a hard look at the co-operative model, both in the form he currently benefits from and in its many other iterations.

“I’m constantly surprised by how rarely the co-op model is viewed as a business model in agriculture,” Bodnar says. “It’s so costly for new entrants to get into agriculture. I think it’s really crucial right now to explore the co-operative model for landholding, for value-added processing, for marketing, even for knowledge and equipment sharing. The co-operative model is a way for a community to come together around a piece of property or a vision for supporting farmers. It’s a creative and sustainable way to share resources and promote agriculture’s sustainability.”

Throughout the 1990s, the land that Bodnar farms today was a privately held organic farm owned and operated by current Vancouver mayor Gregor Robertson and his then-wife. When the Robertsons listed the property for sale in 1998, a group of mostly urban non-farmers united as a co-operative to save the prime agricultural land from development. Together, the group purchased the property and, since then, have owned and managed it as Glen Valley Organic Farm Co-operative.

The vast majority of Glen Valley Co-op’s members are “supportive shareholders”, i.e. relatively uninvolved financial backers who expect little to no access to the land and no financial benefit from their investment. Rather, they invest for ideological reasons. They believe in sustainable farming and are willing to put dollars behind ensuring it is able to continue.

Tenant farmers have come and gone over the years. Currently, Bodnar’s “Close to Home Organics” business shares the land with the three tenant farmers behind Earth Apple Organic Farm.

Glen Valley meanwhile sees its job exclusively as maintaining the physical assets of the land. It leaves the farming operations up to farmers, only stipulating that leaseholders maintain organic certification.

In Bodnar’s case, a co-op’s benefits to the individual farmer are obvious. Not only does he have access to land he’d likely never be able to purchase, he says he also has more control and security than he would in a typical lease arrangement.

“Because we are members in the co-op, we have more say about the future use of the land than we would as leaseholders where someone else has ultimate control over the land,” he says. “It’s very easy for someone who owns land to cash in on land value without notice. Being at the mercy of the whims of the owner is something that causes many young farmers who are renting land a lot of consternation.”

A landholding co-op is just one of countless co-op options. In fact, the flexibility of the co-op concept is one of its most important attributes.

Co-ops can be virtually any size, and they can be structured around any priority. Consumer co-ops increase members’ buying power. Worker co-ops aggregate the supply of labour, allowing workers to better access employment and to advocate for rights and benefits.

In agriculture, the vast majority of co-ops are producer co-ops, designed so members can (among countless other possibilities) share infrastructure, improve production or marketing efficiency, maximize purchasing power, streamline or improve backroom elements like accounting, and/or increase negotiating power.

Most co-ops start as grass-roots efforts with a handful of individuals who legally bind themselves together via a co-operative agreement because of a shared need, resource, concern or priority. While most stay relatively small, others grow to significant size, like BC Tree Fruits and Quebec-based Agropur with hundreds of members each. Non-ag co-ops like Mountain Equipment Co-op and some credit unions boast tens of thousands of members.

“The major challenge for the co-op model is to increase people’s awareness of them,” says Elvy Del Bianco, the program manager for co-operative partnerships at Vancity credit union. “A lot of people think co-ops are something you did on the prairies a generation ago, or a counterculture thing in the ’70s. They don’t realize that co-ops are in their midst right now.”

Need proof? Home Hardware, Pharmasave, Ocean Spray, Sunkist, Blue Diamond, Best Western, even the Green Bay Packers are all co-ops.

“There’s a billion people on this planet who belong to at least one co-operative,” says Del Bianco. “About 250 million people on this planet are employed by co-ops. That’s far more than multi-national corporations employ. The co-op landscape may have changed from our parents’ or grandparents’ time, but we haven’t outlived the model.”

Though most co-ops simply hold the membership dollars from a member’s joining until their departure, there are other ways to offer returns to members.

“A lot of people think corporations best support your needs now and into the future,” says Bodnar. “But the same can be said for co-ops. You can set up co-ops that have the potential to allow for removing some of the equity that develops, or that allow members to get an investment return. When our grandparents on the prairies set up their branch of the Federated Co-op, their member equity accumulated in the co-op and then was paid out in monthly cheques after they turned 65. There are many options.”

Three years ago, Comox Valley farmer Arzeena Hamir banded together with four other farms to create Merville Organics, a producer co-operative that shares resources and markets direct-to-consumer. Today, Merville Organics sells produce at three farmers markets, supplies eight restaurant and health food store wholesale clients, and delivers 120 CSAs (Community Supported Agriculture) produce boxes from spring to fall.

“As one of the bigger farms in our group, people are always asking us why we don’t go it alone. There’s no way,” Hamir says. “Well, I guess there’s always a way, but it would be so much more stressful and so much less efficient.”

The group shares the load for marketing and distribution (“I handle Saturday market sales. Another person takes on Sunday. Another takes on the CSA dropoffs on Tuesday and someone else on Friday,” she says). The group also shares infrastructure, including a truck, walk-in coolers, wash station, flame weeders, etc. Plus, the co-op backs up individual members on the production side, providing support when works piles up, for example, and stabilizing output in the event of production shortfalls.

The benefits, Hamir says, can be summarized as “community.”

“I know the democracy things takes time and effort and can be really frustrating, but the emotional support a co-op offers is huge. We had the crappiest spring this year. We commiserated together. When things go well, we celebrate together.

“I think farming was never meant to be a lonely occupation,” she believes. “It’s such a fallacy that farmers need to be able to do it all. Hell no, there’s no way that was ever true. Our co-op structure is helping to recreate what everyone used to have and what can continue to make farming viable for the long term.”

Hamir was very lucky. Though she admits that forming the co-op was an incredible amount of work, she and her co-op partners connected with organizations that provided informational and financial startup support.

Unfortunately, however, Merville Organics’ long but relatively straight road to co-op formalization isn’t what all hopeful co-op initiators should necessarily expect. In fact, Canada lags behind many other countries in terms of offering formal support for co-operatives.

“A few years ago Vancity gathered some co-op members together to talk about some of the challenges and opportunities of co-ops,” says Del Bianco. “They all told us the hardest part of forming a co-op is the actual forming of the co-op. They described it as building the plane while they were flying it.”

Figuring out how to build the co-op took serious time and a lot of personal energy, says Del Bianco. “The challenge is that there are so many different options for co-ops, and people who want to set up a co-op often feel that they have to invent it from scratch.”

Del Bianco, Hamir and Bodnar all agree the process to co-op creation needs to be simpler, and government legislation needs to more actively support co-op development.

“We are working on a recommendation paper to put in front of the noses of provincial government,” says Del Bianco. “We’d like to see the process for co-op incorporation streamlined. At this point, it’s unnecessarily complicated and takes too long.”

As well, he says, governments could actively promote co-ops in agriculture by educating producers on the many ways in which co-ops can be structured.

Governments should also recognize that farmers are already stretched for time. “Ideally, co-ops are ground-up organizations,” Del Bianco agrees, “but it’s tough in agriculture to do that. There’s a real role for government to make available resources that support the community organizing and development process. We need someone greasing the wheel a little and presenting some basic information on successful co-ops. It would be a relatively modest investment of government resources, but a valuable one.”

Changes to securities legislation should also allow more freedom and flexibility for investment in co-ops, Del Bianco argues. The traditional co-op model, under which members bring a set membership fee into the co-op when they join and take that same amount with them when they leave, means co-ops often have limited investment ability, limited options for raising any significant capital, and very low chances of being approved for credit from most financial institutions. So, while a co-op might be successful as a marketing structure, it is more problematic if the priorities of the membership require serious infrastructure or technological investment.

“Right now, co-ops can have a class of investing members but if you go above $5,000 per share, it triggers all kinds of security regulations,” says Del Bianco. “We’d like changes there that would allow greater pooling of capital that would support co-ops better. It’s just too difficult to accumulate too little capital.”

Bodnar adds that professional support is another element that would help.

“There is definitely a gap. We don’t have lawyers, accountants, even executives who understand the co-op structure and the benefit to the agricultural sector,” he says. “As organizations change and bylaws change, we need support from professionals to reinvent existing co-ops to meet the changing needs of members.”

Admittedly, not everyone is quite so keen on co-ops. Some believe the co-op movement is an outdated dinosaur that no longer works in an era of high technology, costly infrastructure, and increasingly competitive marketplaces.

Motivated, entrepreneurial and competitive farmers may argue that the product grown by the best growers gets averaged down in a co-op because it is mixed with other growers’ inferior product. Others say they would have to settle for average prices because a co-op has to move a higher volume of product. Still others say a co-op fosters complacency or decreased competitive spirit.

It doesn’t have to be that way, says Bodnar. A co-op can be — and, in fact, should be — structured to ensure farmers are fairly and individually compensated for quality. A co-op’s ability to foster relationships with more customers can offer higher returns to growers. And, a co-op should actively foster leadership and support ambition, he says.

“Some growers are extremely talented and ambitious, with huge entrepreneurial drive. If a co-op could invite those people into leadership positions, the whole organization could benefit from the strength of those growers,” he says. “There absolutely is a place for entrepreneurial spirit and ambition in co-operatives.”

In fact, in other countries, co-ops actively support competition, product excellence, and maximized returns. In Italy, co-operatives are valued, vibrant, diverse and cutting-edge, and they are seen as a fully integrated and entirely accepted way of doing business. In fact, as much as 95 per cent of high-value, value-added agricultural products including wine, parmesan cheese and balsamic vinegar are produced via co-ops in certain regions.

“Co-ops have completely changed the economic reality for farmers in Italy,” says Del Bianco.

Since 2002, Vancity has sponsored a study tour to the northern Italian region of Emilia-Romagna to see its co-operative system in action. This past June, the Vancity group — which included Bodnar, Hamir and other community partners — travelled to the region to explore the role of co-operatives in its thriving agricultural sector.

“It was so eye-opening to see how co-operatives work in Italy. The region we visited has a very well-developed and diversified economy. So much of the agricultural activity was supported by co-operatives with vertically integrated ownership by farmers,” says Bodnar.

He was particularly impressed to see that co-operation does not mean a lack of competition in Italy. In fact, competition and ambition are hallmark features of successful co-ops internationally.

“In Italy, they have a carbonated red wine called Lambrusco. There are numerous co-ops that each produce that wine. Each has a lot of members: some are 1,400 members in size. The co-ops compete for members. What that really means is that the products have to be quality because membership is not a static thing,” says Bodnar.

In addition to government legislation more actively supporting its co-op sector, Hamir noticed another key element of the co-op movement’s success in Italy.

“I did a lot of pre-trip reading,” says Hamir. “While I was reading, I was thinking: maybe it’s in Italians’ culture to get along? Maybe that’s why co-ops work there better than here? No! They fight there too! But they have support services for co-ops in trouble there. There are places you can call on that will helicopter in and guide you through the major hiccups a co-op can go through.”

In Italy, all co-ops pay a levy of sales. The levy is put into a fund that supports new co-op startups and offers resolution support for co-ops facing issues.

“Because co-ops are so big and such an accepted way of doing business there, the funds come from within the co-op sector. It would take us a while to get to that stage. What we need in Canada is a) some funding and b) some people with skills to support and facilitate,” says Hamir.

Back home in Canada, Del Bianco was gearing up for Cooperate Now, a four-day “Co-op Boot Camp” organized through a partnership between the BC Cooperative Association and Vancity since 2015. Designed both to help build a support network for prospective co-op creators and to teach the basic co-op model, the boot camp enjoys strong and growing demand.

“People are thirsty to sip at this well,” says Del Bianco “We have to turn away as many good applicants as we allow into the Boot Camp because there is so much interest.”

Typically held in May, the workshop was offered an extra time in November this year in order to better suit the many farmers interested in co-op creation.

Hamir has her own boot-camp style, tough-love advice for those considering a co-operative structure.

“If you can’t tolerate meetings, co-ops are definitely not a good choice for you. Working in a democracy is not the same as making decisions right away. You won’t be as nimble. Allow yourself time to plan, since there’s a lot of planning that goes into making a co-op successful. And, have a good business plan. Just because you are a co-op doesn’t entitle you to be successful. If the numbers aren’t there, you aren’t going to succeed.”

At the end of the day, have the meetings, the planning, the voting and the compromising been worth it for Hamir?

“Oh my gosh. Absolutely. I get heart palpitations just thinking of what it would be like if Merville Organics didn’t exist.”

The post The new co-operatives appeared first on Country Guide.

In Ontario they visited Agris Co-op and Great Lakes Grain in Chatham, Agrico fertilizer storage outside London, an Agromart retail operation in Wellburn, and the Donkers’ dairy goat farm in Shedden.

In Quebec, they will visit Comax, La Coop Fédérée, grain and dairy farms, and a farm machinery co-op on their journey to learn more about how they can manage and grow their nascent co-op enterprises.

The visitors include members, board members and the managers of two co-ops in Ukraine – Zernovyi Co-op, which will soon launch commercial operations of its co-operative grain storage facility, and Zerno-BUNK Co-op, which operates in Bobrynets Raion. The grain project manager in Ukraine is also among the visitors.

The grain elevator and the co-ops’ development have been supported by the Ukraine Grain Storage and Marketing Cooperatives Project, a consortium of SOCODEVI, the Canadian Co-operative Association and IRECUS, with funds from the Canadian Government.

“We are pleased to welcome this group of highly motivated farmers and co-op representatives to learn more about the day-to-day operations of grain co-ops in Canada,” Michael Casey of the CCA said. “We hope that along the way they will be better able to envision what their co-op can achieve.”

“This project is a proud part of the rebirth of co-operative agriculture in Ukraine,” says project manager Sergii Kurdytskyi.

“Seeing co-operatives in action here in Canada helps strengthen our belief in the future success of the two grain co-ops and the entire co-operative movement in Ukraine.”

The post Ukraine farmers examine Canadian agriculture co-ops appeared first on Country Guide.

Of course, we also remember the sales of the farmer-built Prairie pools and United Grain Growers.

People argue why these and other farmer-owned grain-handling co-operatives were sold. Reasons include being too small to compete in the global markets, overregulation of the industry, not enough regulation, the existence of the CWB, the loss of the CWB, mismanagement, the inability of co-ops to raise funds for upgrades and expansion, and ideology and politics.

However, there is one reason rarely brought forward which farmers need to think about, not only to account for what happened to these co-operatives, but to prevent the same sorts of buyouts from happening to thousands more member-owned businesses, ranging from the few remaining independent grain facilities to farm supply co-operatives, rural gas and electrical co-ops, and credit unions.

That factor is a lack of business succession planning. Why are we not planning for the succession of our co-operative businesses to the next farming generation?

One of the main reasons co-ops disappear may simply be an increasing lack of knowledge of what co-operatives are. Many farmers no longer differentiate between the corporate and co-operative business models. Failure to educate and update the co-operative directors, staff, prospective co-op members, and even current membership on the advantages and benefits of being a co-operative may be the leading cause of co-operatives transitioning to a corporate or private ownership structure.

• From the Manitoba Co-operator website: CHS to buy 16 Agrium retail, anhydrous outlets

Dr. Greg McKee, ag economist at North Dakota State University, argues that each co-op must have an ongoing education program. “Co-ops must communicate with the membership to prevent misunderstandings,” McKee says. “They need to educate the core membership on the role of a co-op. They need to provide leadership training to the board.”

This is not to say that co-ops can ignore supply-and-demand forces, and McKee is quick to agree that co-ops must be competitive to remain in business. To retain their membership, he says, co-ops must compete with all other businesses in both price and quality of products and service.

Leadership

In their working paper “Succession Planning in Nonprofit Organizations” published by the Centre for Non-profit Strategy and Management at Baruch College, New York, researchers identified an “impending leadership deficit” for co-operatives and non-profit organizations. The authors found by survey that only 18 per cent of co-operatives have developed a formal plan for CEO transition. The paper’s summary stated: “Both types of organizations see succession planning as important, yet are doing relatively little about it.”

Quality leadership is as important to success in a co-operative as it is in any other business. According to McKee, a board must “define the characteristics desired for the CEO, aligning CEO succession with business goals and ensuring that a pool of qualified candidates exists. Selection of the CEO is the most important activity of the board of directors. Planning for CEO succession is a board responsibility and the board should not wait for the CEO to raise the issue.”

McKee also says succession planning needs to go beyond simply setting a procedure for replacing the CEO, and also must identify the skills and traits needed in a CEO as well as encourage the development of these skills in management personnel within the co-op.

McKee feels the same attention must be paid to selection of directors of the co-op. The current board needs to seek out members who have the attributes desired in a director. They must actively recruit and educate potential directors. 

McKee even recommends that co-ops consider having a non-member director on the board if that person brings needed skills to the board table. 

The Ontario Co-operative Association suggests adding a youth directorship to the board of a co-operative. This provides a learning opportunity not only for a young person but for the board as well. (A check is needed of provincial legislation to determine how old a person must be to be a director — usually 18.) 

It is important that boards which bring in a youth director ensure the youth director has all the rights and responsibilities of any directorship, including voting privileges. A youth director should not to be a token position. However, the association says the term of appointment may differ, such as a one-year term for a youth director instead of the usual three- or four-year term for a director.

Strategies

While education and leadership are important, co-ops must also ensure they continue to meet the needs of all members. This was likely a lot easier in the past when there was likely less differentiation in farm size and in the business needs of members. The more diverse the membership, the more likely it is that the co-op will run into problems. As well, the larger the membership, the greater the risk of the co-op failing.

McKee, however, suggests a number of strategies to address this issue of member satisfaction.

First, clearly identify the goals of the members and of the co-op. Continually communicate these goals to the membership, staff and directors.

Second, identify where the business is losing membership and address the problem.

Third, stop trying for 100 per cent consensus. It is impossible to be everything to everyone all the time. Focus on the core business of the co-op.

Fourth, consider offering customized or specialized services for a subset of the membership. While this may appear to go against the basic equality principle of co-ops, McKee suggests co-ops could offer a new class of membership, or a preferred membership for the subset of membership who is looking for additional service over and above the basic service available to all members.

McKee is also emphatic on another point: “A co-op cannot simply continue with business as usual. A co-op will not succeed if it will not change with the times.”

An example of change may be using social media like Facebook, Twitter, or even a blog to communicate with the membership and prospective members (especially young people) about the co-operative and how it differs from other businesses. (The addition of a youth director may bring valuable information about social media to the board table.)

Dr. Murray Fulton, director of the Centre for the Study of Co-operatives at the University of Saskatchewan, identifies some other issues that co-ops have experienced which likely have contributed to the transition of some rural co-ops. He also identifies the succession strategies that could have been used to prevent these issues leading to loss of membership control.

According to Fulton, some co-ops fail to allocate sufficient funds to cover retained earnings which are payable when members leave a co-op. He says a co-op must set aside the funds needed to cover this cost. He also suggests a co-op may even want to consider a regular, scheduled payout of retained earnings for all members instead of waiting until members leave. 

On the other hand, Fulton points out some co-operatives have not allocated enough of the profits generated by the co-op for the growth of the co-operative. While high patronage rebates benefit current membership through lower costs and services, it can be a short-sighted strategy. Instead of returning all profits as patronage dividends, Fulton wonders if perhaps some of these funds could remain as permanent capital of the co-op to be used for growth and expansion of services.

New-generation co-operatives

Fulton and McKee warn that new-generation co-ops present an even greater challenge for long-term continuation under the co-operative business model. While new-generation co-ops seemed the perfect way for a group to fund a new venture to provide a needed service in a community, this model typically requires a very significant upfront investment by the membership.

Even after a relatively short time, a successful new-generation co-op (NGC) can have increased so much in value that potential new members simply cannot afford to buy out members seeking to leave the co-op. As a result, new-generation co-ops are even more likely to transition away from membership control than a traditional co-op.

If you are a member of a new-generation co-op it is even more critical you have a strategy in place to transfer ownership to new members if you want the business to remain under membership control.

This is also the opinion of USDA economist Bruce Reynolds. In his publication, Ownership Succession Crucial for Rural America, Reynolds writes: “The challenge is that most beginning farmers, especially those with farm debt, cannot afford to buy appreciated shares in a new-generation co-op.

“In recent years, many value-added enterprises have been functioning as NGCs but have been formed as Limited Liability Companies (LLCs),” Reynolds continues. “In this way farmers have a larger market for selling shares, one that includes non-farmer investors, but ownership and control of these businesses will become increasingly unavailable to beginning farmers, or to any farmers, for that matter.

“Thus the new-generation co-operative may not become the co-operative for the next generation of farmers.”

The co-operative business model is highly successful. The 2012 House of Commons Committee report “Status of Co-operatives in Canada” points out one in three private-sector businesses fails whereas only one in five co-operative enterprises fails. 

However, their downfall is business succession planning. If you are a member of a co-op, and want to see the business continue to be member controlled, succession planning is an issue your membership and directors must tackle immediately.

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