Collaboration, New Generation Cooperatives and Local Development

By Walzer, Norman; Merrett, Christopher D. | Journal of the Community Development Society, July 2002 | Go to article overview

Collaboration, New Generation Cooperatives and Local Development


Walzer, Norman, Merrett, Christopher D., Journal of the Community Development Society


ABSTRACT

Local public officials and development practitioners are struggling to find ways to revitalize their communities. This article examines an expanded role for agricultural businesses in the development process. Three main issues are addressed. Findings from a national survey of 117 New Generation Cooperative managers show the reasons for starting these ventures including an interest in creating local jobs, the roles played by development organizations, and how successful they have been. The relative importance of social capital in starting the NGCs is also statistically tested. A survey of 43 development agencies in Illinois is then examined to determine the interest in working with agribuiness ventures, the types of incentives available, and whether the presence of agricultural interests on the board of directors affected the industries contacted. The article concludes with a discussion of the experiences in Renville. Minnesota, which has worked with five NGCs in a local revitalization program.

Keywords: value-added, New Generation Cooperatives, social capital, local economic development, collaboration

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INTRODUCTION

Local public officials and leaders in many rural communities are struggling to find ways to stimulate employment, sales, and incomes. While the national economic expansion during the 1990s brought prosperity to areas with retirement or tourism attractions, it largely bypassed many areas that depend on agriculture or natural resources (Johnson & Beale, 1998).

Even worse, agricultural areas have experienced low commodity and livestock prices, adversely affecting small family farms and local businesses that rely on these farmers as customers (Fellows & Lasley, 1995). Farmers, in response, have supplemented their incomes from off-farm sources, namely employment in nearby communities (Greider, 2000). The fact that small towns have lost jobs, at the same time that farm families need additional income from local employment, creates a situation in which community leaders and agricultural producers must work together to revitalize local economies (Egerstrom, 1994; Leistritz & Sell, 2001).

While some commentators have proclaimed "a crisis in rural America" (Roland, 2000), there are examples where even relatively small communities have taken steps to successfully revitalize their economies. These efforts range from attracting call centers to small towns, such as Bottineau or Fessenden in North Dakota, or pursuing a development strategy based on value-added agriculture as exemplified by Renville, Minnesota (Call Solutions, 2001; City of Renville, n.d.).

Typically, agriculture is not seen as a growth industry and thus does not rate high as a local development strategy. Instead, rural communities prioritize tourism or recruiting branch plants (Malecki, 1995, p. 328). While these strategies create jobs and thereby raise local incomes, incorporating agriculture into the development strategy has the advantage of creating income for local producers who provide the inputs to the processing plants, as well as providing opportunities for them to share in the value-added generated in the production process.

Equally important is the fact that because of low commodity prices, state departments of agriculture have worked aggressively with producers and local farm groups to expand markets for agricultural products in an attempt to raise the incomes of farm families. Because the funds are marketed to producers rather than development agencies, economic developers may not be as directly involved in these efforts, but they can work with producers and create business ventures using these funds.

This paper explores opportunities for incorporating agriculture more effectively into local economic development initiatives. Specifically, we investigate the willingness and opportunities for local development practitioners to work with producer groups. …

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