Farmer-owned fruit and vegetable cooperatives that wholesale produce to restaurants, supermarkets and institutions could become a valuable marketing strategy to help sustain the agriculture industry in the Northeast, according to a recent report by a Cornell University group. Bucking a national trend of declining coops, fruit and vegetable cooperatives in the Northeast are growing in number.
"This came as quite a surprise to me," said Duncan Hilchey, agricultural development specialist in the Cornell Farming Alternatives Program, part of the university's Department of Rural Sociology. "Northeastern cooperatives are growing in number with very little public support. They seem to be increasing as a result of opportunities in the private sector which is fostering these changes. Cooperative Extension assistance may enhance that potential."
Hilchey cannot pinpoint exactly why grower cooperatives are increasing in the Northeast but are declining elsewhere. If funding becomes available, a new study could determine that. Certainly, the 10 percent to 12 percent growth in fruit and vegetable consumption over the past 10 years is a contributing factor.
Nationally, while the number of cooperatives has fallen 44 percent over the past seven years, fruit and vegetable cooperatives in the Northeast have increased by 56 percent, according to the U.S. Department of Agriculture's Rural Business and Cooperative Development Service.
In 1987, there were 344 fruit and vegetable cooperatives nationwide. That figure dropped to 229 in 1991; and there were 188 such cooperatives in 1994. In contrast to the national numbers, the
12-state Northeast region has 42 fruit and vegetable growers' cooperatives -- the highest number in two decades -- rebounding from a low of 27 in 1987. Hilchey's article, "Northeast Growers' Coops Making a Comeback," was published in the Cornell Farming Alternatives newsletter, Vol. 4, No. 2, Winter 1996.
"Participating in a cooperative often complements a growers' retail activities, such as selling at a roadside stand or a farmers' market," Hilchey said.
"If well managed, cooperatives may offer a means of achieving what is beyond the reach of individual growers such as entering new markets or adding value to produce," said Brian Henehan, senior extension associate with the Cornell Cooperative Enterprise Program. With 11, New York leads the Northeast in number of fruit and vegetable cooperatives which gross at least $10 million annually. New York is followed by New Jersey with nine and Pennsylvania with eight.
"We believe small-scale fruit and vegetable cooperatives have the potential to be an important component of an overall sustainable agriculture strategy for the Northeast," Hilchey said. The study will attempt to grapple with challenges facing the growers, characteristics of successful or failing cooperatives, and how small-scale cooperatives could work together to increase all growers' opportunities. In a second year of the proposed project, the Farming Alternatives Program along with the Cooperative Enterprise Program at Cornell and the Northeast Sustainable Agriculture Working Group will sponsor a conference on small-scale fruit and vegetable grower cooperatives. If there is interest, they may also help organize a regional federation of cooperatives.
Small-scale cooperatives -- which gross less than $10 million in sales annually -- make up only 4 percent of the Northeast's $2 billion in fruit and vegetable cooperative sales. Hilchey explained that large grower cooperatives, like Ocean Spray and National Grape (Welch's), account for most of the sales. But many small- scale fruit and vegetable cooperatives occupy niches in the regional marketplace that have not been filled by least-cost, mass-market producers and distributors, he said.
"One possible development strategy could be the establishment of a Northeast Growers Coop Federation," Hilchey said. The Horticulture Producers Federated Association accomplished this successfully in the Southeast. That formal association provides insurance, some marketing assistance, educational services, consulting and political action.
"An organization which supports existing grower cooperatives and promotes the establishment of new cooperatives in the region could help farmers capture a larger share of the growing fruit and vegetable market," Hilchey said.