MODULE 3a

Purpose: To clearly identify a common economic goal and assess the level of interest in the formation of a co-operative to address this goal.

The catalyst for forming a co-operative business is a group of compatible individuals who share a common economic goal and who believe that they can best achieve this goal by working together.

A common economic goal can be the result of a shared problem or opportunity. For example, the group may lack a market for their products or a satisfactory source of farm supplies.

CHECK OUT THE COFARM CASE STUDY FROM THE CZECH REPUBLIC (EKO FARM BOŠINA) TO GET TO KNOW HOW IMPORTANT IT IS TO FIND A COMMON GOAL!

Clearly identify the goal or reason for the formation of a co-operative.

In most cases a common goal will be identified by a group of prospective co-op members getting together to discuss the issues facing their farm business. These informal gatherings lead to further discussions and ideas of how a co-operation/partnership can address the issues common to the group.

To clarify the idea for forming a co-operative:

• Research the issues facing your group, focusing on the biggest obstacles and identifying current options and potential alternatives;
• Collect general information on the structure and operation of co-operative businesses;
• Gather information about the kind of business that your group is interested in;
• Use the information collected to determine which goals a co-op can and cannot address;
• Discuss your findings with as many potential members as possible.

=> Hold an information meeting for people who may be interested in forming a co-operative/partnership

The purpose of this meeting is to determine whether or not there is enough interest to start and support the ongoing operation of a co-op business.

Plan for an effective meeting by preparing an agenda and arranging for a meeting facilitator. Select a time and location that will be convenient for most people. Consider holding the meeting in conjunction with an existing producer assembly or conference. Publicize the meeting date, time and place via association newsletters and magazines, letter or word of mouth.

Allow plenty of time for discussion and encourage prospective members to express their views and ask questions. All issues raised should be addressed, although the answers to some questions may be delayed until more information becomes available.

! Decision Question: Is there enough interest in the project to warrant continuing?

=> Select a steering committee

The steering committee is responsible for guiding the group through the development process. Setting up a steering committee is the case only if there are more partners. Specific responsibilities include:

• informing potential members of the group’s progress and coordinating further meetings;
• surveying producers regarding their needs;
• collecting market and financial information;
• assessing the feasibility of the business;
• overseeing the preparation and implementation of the co-op’s business plan.

The steering committee may undertake these tasks with other potential members or with the assistance of external advisors.

=> Obtain funding

The development of a new co-operation/partnership can be quite costly. Money is needed to cover the costs associated with conducting a thorough feasibility study, developing a detailed business plan and hiring professional advisors and consultants.

Options for raising funds include?

• Asking potential members to contribute directly.
• Asking producer associations or other industry organizations to fund all or portions of the co-op development process.
• Applying for government funding.

The investment of money or time involved in fundraising is often an excellent way to test the level of producer commitment to project. All money collected must be managed in a manner that assures members of security and fiscal responsibility. Make a plan to address how unused development funds will be used or redistributed if the co-operation/partnership isn’t formed.