By Martin J. Kidston
Comparing cooperative development to a corporation or business, Montana State University-Northern's Cooperative Development Center may be the spark that helps ignite the state's rural economy.
Executive Director of Bear Paw Development and MCDC Advisory Council member Dick King said the cooperative program being established at Northern has the potential to boost the state's rural economy, including areas such as Havre and the Hi-Line.
"When you look at the growth potential for Havre and Hill County, you cannot overlook agriculture," King said. "I think there's very little economic growth potential in direct production agriculture. However, growth can come from processing and marketing agricultural products, and by adding value to those products. That's where a strong cooperative is a viable option."
King explained cooperative development as a corporation, one built and headed by a large number of independent operators who have pulled together to form a single corporate entity. It's a progressive idea, King said, that may be vital for small producers, such as family farms, when searching for ways to improve their financial situation.
"The future of these operators is open for question: How viable they will be in the future," King said. "One option for them is to look at a cooperative, which could help them market their product."
King said the MCDC would be implemented to help such producers overcome the tangles of complicated issues, like tax codes, legal structures and business plans. Family farms, he said, often have a hard time getting over those hurdles, and strong cooperative development has the potential to help.
One example of a good cooperative, King said, is a wheat farming cooperative in Montana and the Dakotas, where the farmers market their combined wheat through a cooperative to a mill located in Minnesota.
"These farmers can share the profits because they invested in the processing plant as cooperative owners," King said. "If the plant makes money, that spins back to the share holders, which in this case, is the farmers."
King pointed to other cooperative efforts in Hill County, such as the strawplant and Premium Pork of Montana, which is attempting to bring 13 family farms under one cooperative. As such, King said they would jointly own the production facility, and share the marketing and the income from that facility.
"They've worked very hard to get this project going, and if the cooperative center at Northern had been around sooner, I think the project would be further along," King said. "Having the center at Northern would be a big boost to such producers."
Director of Grants and Sponsored Research at Northern Greg Jergeson, said the MCDC will offer its first public session to help interested parties learn more about cooperatives, and how to build and finance them. The programs will take place via NorthNet at MSU-Northern.