KDC: What is your background?
Jim: I started farming in 1972. My wife Moie joined me in 1974. I farmed for 16 years before the co-op started in 1988. We grew organic vegetables for fresh markets mostly sold through direct marketing. We were wholesaling about 1/3 of our products. We had a pattern of growing more than we could sell direct even though wholesaling was very difficult and disadvantageous. We couldn’t get the premium for organic products since most wholesale markets didn’t buy organic. The smaller you are the harder it is to do any wholesale. We had no systems set up with transportation or relationships with buyers because we were too small. Working alone, our supplies were unstable and our season was too short, so we weren’t attractive to wholesale buyers.
KDC: What attracts you to the cooperative model?
Jim: In the winter of 1988 we had two or three meetings of people we thought would be interested. We had at least three examples of marketing cooperatives of small producers selling wholesale together, Finger Lakes Organics in New York, Deep Root Organic in Vermont, and Organically Grown Cooperative in Oregon. They inspired us to do something like this ourselves. We had a core of three people and another three or 4 more as potential participants. We decided to get it off the ground in order to attract other growers to the co-op to make it more profitable. During the spring we made a plan, got a name and made a brochure -- dreamed ourselves up.
Five growers moved this forward and started functioning as if we were a real established marketing cooperative. One fundamental aspect was our production plan of who would grow what so that we would not all have the same things at the same time. This was to avoid competing with each other as well as being more attractive to the buyers with a longer season and more variety rather than trying to get rid of large amounts of one thing.
We had no business plan or capital. We knew we couldn’t achieve that in a short time, but we did have these things to sell and we decided to just see what it would be like to operate. By the first of June we were doing it. We had 10 or 15 things to offer and started functioning. We only needed a desk, a phone, a cooler, a truck and a person to coordinate and run it. We hired a part-time person to call customers, take orders, drive the truck to make deliveries, give the customers an invoice, collect the checks and pay the growers.
We operated for 5 seasons before we incorporated legally in 1993. Before that it was informal. It functioned and succeeded in what it was designed to do. We sort of knew that when we got big enough we would needed some rules, an accounting system and transparency.
KDC: Why did you choose multi-owner vs. becoming a distributor for these growers?
Jim: I didn’t want to become an owner of a wholesale produce operation but I did want the services that it would offer me as a grower. I was focused on being the best grower I could be and improving my production. I could have made a profit doing it, in fact, we tried one year to roll it into our own business -- buying and selling from other growers. But what I really wanted was to take these tasks off myself. I wanted to have this cooperative as a service to me.
Part of it was that in our wholesaling efforts there was a big company called Organic Farms Incorporated, something that started up in the early 80’s from distributors who were not growers. They were the big player in organic produce in the east. They had a warehouse with a fleet of trucks in Baltimore, but most crops came from California. They were the only game in town for us to wholesale produce as organic. We had a bad experience; other growers were having similar bad experiences with this profit-making business that offered no transparency and no commitment to us as growers. This motivated us to start our own thing that we have control over, with structured rules where growers would be treated fairly. There was a clear contrast between us (growers) and them (distributors). We wanted the profits to go back to the growers. The for-profit business is not evil or unfair, it’s just not transparent and we had no control. Because we didn’t have control, we were at the mercy of this business that was totally independent of us.
KDC: Describe your role and responsibilities
Jim: I definitely was an organizer and an idea person. I had more experience than the other people who got involved in the beginning; I had ideas about how to proceed to protect myself and the other growers. We knew 5 or 6 growers would not be enough; we needed more people to get economies of scale. We were always in the recruiting mentality. Of course there weren’t many organic growers at that time; there was no network, no PASA, no certifying agencies, and no internet. It was difficult to identify organic vegetable growers who might benefit from it.
Since we were already functioning, we could demonstrate it could be done by creating an example and having a track record. From there, we built the trust of the growers. We were new; the idea was unknown. Cautious farmers would say “Why would I get together with you when I can do this on my own?” We had to demonstrate to them that if you join us, this is what you will get. In the 5th year, we had an influx of new members. Interestingly, Organic Farms Incorporated collapsed creating a huge opportunity. Growers were left unpaid and were ready for a new approach, and their customers needed a new source. We ramped up and took advantage of that. We doubled our sales and membership between 1991 and 1992. Thus it was time to move into the formalization of the cooperative. Nineteen ninety-three was a huge breakthrough year; Chris Fullerton joined us to be our general manager. Prior to this our managers changed every year. He was very capable and willing to do the research on incorporation and by-laws. We took off from there with a steady growth pattern that stayed solid for a really long time. In 2013 we have 47 members, with 8 year round full time staff and another 7 seasonal staff.
KDC: What do you see as the biggest challenges?
Jim: There is a tiny little industry of growers using the cooperative model, but the interest in this is growing. I have done a lot of consulting with groups of growers trying to form cooperatives. When it comes to actually doing it, they don’t follow through. I can easily imagine that there is a certain amount of inertia, not having the drive to create something new. Growers are too busy on their farms and are distracted. People think you need to have all of these things in place before you actually function as a cooperative. If you think you need to start off with an elaborate thing, it is intimidating and discouraging. They are held back by all the difficulty of forming an organization.
We started without a business plan, bylaws, a building, trucks, or staff. What we did have was the basic germ and the determination to see how it would work. We didn’t get intimated by having to do all of those things at the beginning. We treated it kind of like a trial of moving in together before getting married. We didn’t look for capital until 1998, around our 10 year mark, to build a better warehouse.
People need to understand the benefits and the reasons to do this. A cooperative can help each one individually to be more profitable. They have a motive; if I join this thing I will get a profit. Each business is profitable separately because we do this together. It is not about sacrificing for the common good. There are only two sacrifices; you cannot grow whatever you feel like growing, but grow according to the production plan; grow what makes sense for the whole group. There needs to be coordination. The other part is not to go out separately and compete with the cooperative. I gave up my wholesale customers. Suddenly the group had the customer and not me personally. People are held back by the idea that they don’t want to limit their access to this or that customer and turn it over to the group, “it is my customer”. Personally, I don’t want to have to deal with this customer, I want someone to do this for me. With the co-op, I have an agency looking for other customers that I do not have. The co-op creates more customers for all of us. Growers need to look past their immediate self-interest.
KDC: What is the view from your doorstep?
Jim: I think it is a highly successful concept that has proven itself. We have all benefited tremendously. Now, we have a stronger production plan with a 12 month season, rather than our initial 4 month plan. Moie and I are moving towards retiring. I seeing us gradually moving out of the picture and selling the farm to another entity, but it will continue to operate the same and have new owners who still participate in the cooperative. I see good continuity. We are lucky enough to have a great crew ready to take over for us to keep the whole thing going. I see better production building on our experience and expertise along with a new enthusiasm. The new owners will have the benefit of the strong business that we have built. They are growing more products, more variety, on more acreage with an expanding the customer base. We will just fade away and nobody will notice that we are gone. We are becoming the financiers in a slow steady evolution to new owners. I will keep working indefinitely, but with more time off. We are in the third year of the process; I am delegating a lot more and have less stress. I don’t want to retire or stop working. One of my favorite things to do is to sell this concept to groups who are trying to come together in a cooperative. It is not that hard, you just need to take the step.
By: Peggy Fogarty