Farmer Cooperatives Present Proposal To Aid Self-Help Efforts
WASHINGTON, D.C. With
American agriculture facing a
number of long-term challenges,
farmer-owned businesses are
asking Congress to support coop
erative self-help efforts designed
to provide long-term support for
the economic well being of this
nation’s farmers.
“The farmer’s share of die con
sumer food dollar has declined to
just 20 cents its lowest level
ever,” David Graves, president
and CEO of the National Council
of Farmer Cooperatives (NCFC),
recently told the House Commit
tee on Agriculture’s Subcommit
tee on Conservation, Credit,
Rural Development and Re
search. “Increasing the farmer’s
share by just one cent to 21 cents
would generate an additional $6
billion in total income. The chal
lenge, of course, is how.”
To that end. Graves presented
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the subcommittee with NCFC’s
legislative proposal, the Farmer
Business and Income Opportuni
ty Act The proposed act, a prod
uct of NCFC’s Farm Bill Task
Force, seeks to increase the in
come that fanners receive from
the marketplace by encouraging
and supporting farmer-owned
businesses. “To be successful,”
said Graves, “fanners and their
cooperative businesses must be
strategically positioned to be able
to compete in what clearly is a
rapidly changing global market
place.”
Key recommendations of
NCFC’s package include:
• Providing improved access
to capital through credit and in
vestment initiatives for farmer
cooperatives. These include the
modernization of the Business &
Industry Loan Guarantee pro
gram, new tax incentives to en
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courage investment in coopera
tive businesses, and the creation
of an equity capital fund for rural
businesses, including farmer co
operatives.
• Clarifying tax laws relating
to the organization and operation
of farmer cooperatives. This ac
tion will allow farmers to benefit
more from the value-added pro
cessing of their products.
• Revitalizing USDA research,
USDA Reporting Error Results In
$42-$54 Million Loss to Cattle Industry
WASHINGTON, D.C. Cat
tle producers suffered a $42-54
million loss because of errors in
USDA’s price reporting system,
the National Cattlemen’s Beef
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education and technical assist
ance programs, including re-es
tablishing a separate agency
within USDA to encourage and
support fanner cooperatives and
strengthening of the Value-
Added Technical Assistance
Grants program.
• A Sense of Congress resolu
tion to reaffirm support for farm
er cooperatives and encourage
and enhance the ability of farm
Association (NCBA) said today.
“The economic estimates show
that American cattle producers
lost between $42 and $54 million
between April 27 and May 18 be
cause of a government reporting
error,” said Chuck Lambert,
NCBA Chief Economist.
“While there is some question
concerning when the injury actu
ally occurred, it is clear that there
ware significant losses to many
individual producers because of
an inaccurate price formula.”
The errors resulting in the loss
occurred when prices were inac
curately calculated, under the
USDA mandatory price report
ing system that went into effect
on April 2.
On May 16, USDA’s Agricul
ture Marketing Service an
nounced that prices for “no-roil”
products had been incorporated
into Choice and Select product
prices reported nationwide. Price
reports have been accurate since
May 16.
Following the announcement
of the error, NCBA commission-
USDA Marks 75th Anniversary
Of Cooperative Programs
WASHINGTON, D.C. Dur
ing a ceremony held recently, the
USDA recognized 75 years of
providing research, education, in
formation and technical assist
ance through Cooperative Serv
ices programs. USDA Secretary
Ann M. Veneman was joined by
former Secretary Earl Butz, as
well as employees, former admin
istrators, and other invited guests
for the event.
“Our mission provides some
valuable tools in the food and ag
riculture industry’s toolbox to
help them better compete in to
day’s changing food system,”
said Veneman. “Seventy-five
years after its creation, Coopera
tive Services recognizes these
changes, and our employees are
playing a major role in helping
promote the opportunities that lie
ahead in what promises to be a
world of opportunity.”
There are about 3,500 farmer
owned agricultural cooperatives
in the nation today, which record
about $72 billion per year in sales
of crops and livestock and about
$23 billion in farm supply sales.
Co-ops help members market
their products and, increasingly,
add value to the products
through further processing, as
Lancaster Fanning, Saturday, July 7,2001-A29
ers to join together in cooperative
self-help efforts.
“We believe,” testified Graves,
“that enactment of this package
would provide farmers with a
greater opportunity to improve
their income from the market
place, better manage their risk,
capitalize on potential market
opportunities, and compete more
effectively in a rapidly changing
global economy.”
ed two economic studies simulta
neously, without consultation, by
top economists from Virginia
Tech and Kansas State Universi
ty. See results of loss analysis at
http://www.beef.org/newsroom/
index.htm.
“Now that we have the eco
nomic analysis, we are in a better
position to consider remedies and
determine next steps,” said
NCBA President Lynn Cornwell
and a cattle rancher from Glas
gow, Montana.
“NCBA’s primary objective is
a fair and effective price report
ing system,” continued Cornwell.
“There are many factors influ
encing the cattle market and a
variety of ways to calculate the
impact of those factors. We are
sharing this data with state beef
organizations now so that NCBA
members can provide clear direc
tion, based on the best available
information, on bow to proceed.
We plan to consider all available
options, including legal recourse
and financial compensation, over
the next few weeks.”
well as helping members obtain
farm supplies and services at fair
prices. Utility cooperatives use
the same principles to bring qual
ity electrical and telecommunica
tions services to many rural and
urban parts of the nation.
Earlier this week, USDA an
nounced 28 grants totaling al
most $lO million to promote de
velopment of value-added
products. Nearly 25 percent of
the grants were targeted to find
ing new energy solutions by uti
lizing raw agricultural commodi
ties. A large majority of the grant
recipients were cooperatives.
“We need to continue to think
creatively to meet the challenges
of this new marketplace in terms
of how cooperatives operate,”
Veneman said. “This can be done
by providing the kind of flexibili
ty in our programs that embrace
the changing structure of agricul
ture to ensure the services we de
liver are moving our customers
forward in this new century.”
For more information about
USDA’s efforts to assist coopera
tives, visit the USDA Rural De
velopment web site at http;//
www.rurdev.usda.gov./