by Ellen Wren
Small farms can always use new ways to improve the bottom line. The sharing economy business concept, sometimes referred to as collaborative consumption, is the idea that lending or borrowing goods, trading, bartering for or sharing labor is a way to reduce expenses and strengthen community friendships and networking opportunities for mutual benefit.
Some growers are banding together to form cooperatives to help them achieve their goals. At its most basic level, cooperative farming is the jointly run collaboration of two or more farming operations sharing any aspect of farming. There are many different models of cooperatives successfully increasing profitability by sharing expensive equipment, compounding buying power, even training labor together to decrease the time and manpower spent doing so.
From two friends sharing some machinery with a handshake agreement, to legal entities all their own, cooperatives by definition are owned and governed by the members and exist solely for their benefit.
Growers are able to realize the savings of combined buying power, allowing small farms the ability to do what larger farms can do independently, such as taking advantage of bulk purchasing to lower cost for members.
Access to equipment and machinery that would otherwise be cost-prohibitive is also a valuable asset. If growers are interested in starting their own cooperative, regardless of size, there are some issues that need to be agreed upon by all members.
- Securing equipment or machinery: How will it be paid for? Will all members chip in? Will each member contribute use of something they already own?
- Rates or user fees: Will this be based on acres or hours of use? Flat rate membership fee?University Extensions often have useful information regarding analysis of operating costs. Iowa State University has an excellent tool for this.
- Equipment depreciation: How will this be accounted for?
- Storage and transport: Items could be stored at a neutral location, with rent for the space divided, or on land belonging to individual members. What will the reimbursement be if stored on a member’s land?
- Equipment and machinery tranport: Some cooperatives jointly purchase a trailer.
- Handling maintence and repairs: How will this be charged to members? Some cooperatives add it to user fees, some divide the cost as it comes up.
- Replacing resources:Who determines this? There could be a trusted member who makes the decision, or the issues can be voted on by the group.
- Fuel storage and purchase: Could be accounted for in the user fee or a policy could be created that requires each grower to top off the tank after each use.
- Schedule of usage: This is a common concern. Most growers find that the time savings outweighs the scheduling challenges and feel that without the cooperative they wouldn’t have access to the machinery in the first place. Planning ahead is helpful for avoiding scheduling conflicts. Google calenders allow everyone direct and immediate access to the updated schedule so they may schedule their needs in available time slots.
- Who can join?: A common standard is that a grower must know a member and be given a positive reference by that member. Members often vote on who may be admitted. Cooperatives among growers tend to be found via word of mouth or informal, local advertising.
- General rules of conduct: Most cooperatives have clearly stated rules about the condition the resources must be returned in. If something is returned dirty or late, a fee is common. Members can also create a rule that if this is a consistent issue, the offender can be voted out. However, most don’t find this to be a problem. Members are generally very cooperative and respectful.
Another option is tool libraries. There are many across the nation but the majority seem to be geared towards household and gardening tools, on a smaller scale than most farming operations would need. That’s not to say the idea hasn’t be implemented for growers as well. The Shared-Use Farm Equipment Pool formed when the Maine Farmland Trust saw the need to lower expenses, in particular for new growers.
There are many models to learn from. Atlanta Community Tool Bank is America’s largest tool lending organization. It’s been in operation since 1991. They loan tools to non-profit organization doing work that benefits the community. Their membership fee is very modest, ranging from $10 for a public school system to $100 for an organization with an annual budget over $750,000. This model has been highly successful and would be easily adapted for growers.
The sharing economy has traditionally been a part of farming. There have always been barn raisings and neighbors lending a hand or a tool, but more formalized cooperatives are gaining popularity.