Isnasari Ahmad Business Principle I Mr.

Paul Martin November 23, 2008

Cooperative in Blueberry Growers

This project about several blueberry growers in one region -lets named it as Cottonwood- scattered over a 300-mile area that have been continually frustrated by their ability to market their blueberry effectively. The growers faced with complicated pest problems and have relied on local independent retail agribusiness plant to advise them with varying degrees of success. Some of the growers have been considering developing a cooperative to serve their needs. They asked me, as a cooperative consultant, to help them think through some of the problems, situations, and opportunities that might result from establishing the cooperative. The first step I have to do is collect all the growers. I invited them in one meeting that I held and ask their opinion about this situation. Besides that, I want them to meet each other so they can share information and problem they faced on the field and together to solve it. I ask them whether they want to work together or not. If yes, I try to explain about cooperative and give them information as much as they need such as basic cooperative principle and specific advantages of cooperative. The most important thing for the growers before they become cooperative is to know the principle of cooperative itself. It will help them to understand what cooperative means and what the rules in it. The principles of cooperative are: The cooperative must be owned and controlled by producers of agricultural products. This principle developed to ensure that farmers are the beneficiaries of these organizations. Voting is limited to one vote per member regardless of the amount of money invested or business done with the cooperative. The return on capital invested cannot exceed 8 percent or the legal rate of interest in a state. At least 50 cooperatives business must be done with members. The cooperative must distribute most of its net income (net saving) back to the producers based on the amount of business done with the cooperative.

After they know what cooperative means, maybe some of them asked me what the purposed of this cooperative. Objectives of cooperative are:

 Provide farmers with a dependable, honest and accurate market for the product they sell and for the supplies they purchase. Increase farmers returns for farm products and reduce the costs of farm supplies services. The basic purpose for cooperative is to serve the needs of their members rather than to make a profit on their own. The principle and the purpose of cooperative for the people who want to begin to create a cooperative are important. It helps them to know better about the co-op and to realize it someday. In addition, I will help them to give information about the co-op, the type, structure and what problem they will face as the new co-op. There are type and structure of cooperative. Type of commodity handled is specializing in marketing grain or cotton, or in purchasing feed or fertilizer. This type possibly to grow in other ways of their product increasing, begins with a single commodity but later find itself handle other product. Also in cooperative that begin with marketing their product but later find itself purchasing input. For structure, there are three main structures in co-op. The first one is centralized association which is most farmer cooperatives are owned directly by their farmer members. These co-ops operate local facilities to serve local farmers, but the problem is the control is from the top, down. It means each member have to do what the Board member said even though they dont agree with that. The other structure is called federated structure. Members are other cooperatives that are farmer owned local and the locals control the regional. This structure is the opposite of centralized association, which is control, is from the bottom to up. There are also some group uses the combination of centralized and federated structure, it calls mixed structure. They use a variety of organizational structures to accomplish their objectives. Cooperative is devoted to helping farmers improve the prices paid for inputs and the prices received for outputs. It helps them to save their money and their product. In this case, some of blueberry growers faced the problems with pest and with the local independent retail agribusiness plant. For this group, I try to help them to become a Local Cooperative. This structure is local and has no affiliation with a centralized or federated cooperative. Local co-op usually organized as a corporation, which is members - or in corporation we called it stockholder will elect a board and later the board will select a manager to carry out the board policy and is in charge of daily operations. For these blueberry growers as a local cooperative, this is a good way for them to solve their problem. First thing they can do after the cooperative formed is to elect the member of the board and select the manager from the farmers itself and together create the policy for the co-op. The policy include how they solve their pest problem, 2

how to selling their product and how to create a new product -if possible- instead of just to sell the blueberry itself. I have an example of blueberry association. It was British Columbia Blueberry Cooperative Association. It was incorporated under the Co-operative Associations Act on March 4, 1952. The Association was formed to facilitate for its members the selling, marketing and exporting of blueberries, blueberry plants, and blueberry products, and to provide members with services connected to the processing of blueberries, and to the procurement of supplies, equipment and services. The Association could promote the cooperative spirit among growers and producers of blueberries, as well as encourage better and more economical methods for growing and processing the fruit. The Association's main office was originally located in Vancouver, but moved to Richmond in 1963 and to Abbotsford in 1986.* This example is appropriate with the Cottonwood farmers need. As it said, the association, or in this case the corporation, facilitate the members to selling, marketing and exporting of blueberry. Not just blueberry, but also the blueberry plant and blueberry product, which is will be discuss with other members later. Also provide members with services connected to the processing of blueberries and to the procurement of supplies, equipment and services. A lot of things to do with this association that would give benefit, not just for the board but also for the members. But this cooperative faced some problems in their operation. The problems such are: Popularity contest for board seats Reluctance to invest in high quality management Board members can become personally affected by Board decisions Inefficiencies of operation

But in every situation, especially in every organization, they always have a problem. The most important is how to solve it without sacrifice the members.

* http://aabc.bc.ca/access/aabc/archbc/display/CRICH-68