A Shared Harvest: Machinery Co-Ops Could Help Small, Upper Midwest Dairy Farms
Ford, Catherine, Cropp, Robert, Rural Cooperatives
As farm size significantly increased in the late 20th century, so did the size of farm machinery required to operate those farms. With limited acreage and significantly higher associated operating cost per acre, many small-and medium-sized farms could not justify buying a full set of machinery. Consequently, many farmers have turned to working with custom operators to plant and harvest their crops.
But working with custom operators has been a problem for many farmers due to timeliness issues when planting and harvesting. For example, there is about a ten-day window in which the best quality forage can be harvested. This challenges custom operators trying to harvest several farms during this same window of time. Many farmers are looking for a solution to their equipment needs for planting and harvesting.
The article, "Shared Machinery Old Idea, Still Good One," discusses the joint purchase of machinery by farmers as a way to reduce individual cost, noting that sharing machinery in the Midwest "is an old practice that still makes good sense today" (Fykson, p11). Organizing a machinery cooperative is one alternative to consider for sharing expensive machinery costs.
A major advantage of a machinery cooperative is that it addresses and controls the timeliness issue. "This could occur by coming to a consensus among the members to limit the number of acres that the machinery can be used on within a year. This is different from working with a custom operator since, in that arrangement, the custom operator decides how many acres that he or she commits to during the year" (Drye and Cropp, p.2).
Another advantage is the reduction in capital individual farmers must invest in machinery. A group of farmers can spread the cost of machinery over several farms and acres. Further advantages include economies of scale applied to equipment purchased or leased, savings in operating costs (such as fuel and insurance) and addressing labor short ages during planting and harvesting.
Cost sharing in a machinery cooperative highlights the greater capacity equipment, labor time reduction, better access to new technology, lower risk burden and increased social opportunities. But risks associated with a machinery-sharing cooperative should also be considered prior to coop formation. Timeliness issues are not completely dissolved with a machinery cooperative. More than one farmer-member may still want to use a piece of equipment during the same time. A solution might be a policy in which a harvesting schedule prioritizes which farmers need to use equipment when.
Another challenge involves the establishment and maintenance of good working relationships among members. If members have major differences in how the cooperative ought to operate, then the benefits of working together may diminish and the cooperative may not be successful. While there are opportunities and limitations for machinery cooperatives for small Wisconsin dairy farmers, it is important to remember that irrespective of what decision farmers make (custom operation, individual ownership or organizing a machinery cooperative), the decision should be compared with other alternatives.
Canadian machinery co-ops
Farm machinery cooperatives in France developed after World War II "to encourage the collective purchase and use of scarce farm equipment" (Harris and Fulton (CUMA ...) p 14). In Canada, several types of machinery cooperatives have recently developed, based, in part, on the French system as well as to move away from machinery syndicate pools, which had no legal stares and thus could not take action when members broke an agreement.
While virtually all machinery cooperatives provide equipment rental and use, there are a number of variants, including piece sharing, whole-set sharing, production pooling and labor sharing. Following are examples of machinery-sharing co-ops in Canada.
* Piece-by-piece machinery sharing can be illustrated with the CUMA system in Quebec. …