CoBank, a cooperative bank serving agribusinesses, rural infrastructure providers and Farm Credit associations nationwide, and the National Cooperative Bank (NCB), a leading provider of financial services to the nation’s cooperatives, their members and socially responsible organizations, yesterday made a contribution of $200,000 to the Food Co-op Initiative (FCI). The donation will support the development of sustainable, cooperative grocery options in rural communities that have lost, or are at risk of losing, their local grocery stores.
Founded in 2005, FCI is a nonprofit organization sponsored by the U.S. Department of Agriculture and other organizations to provide resources for people working to start a retail food co-op that meets the needs of their community. It provides no-cost technical assistance to startup food cooperatives, setting them on the path to success. FCI-assisted co-ops generate an estimated $35 million in local food purchases each year and have created more than 1,500 jobs. The contributions from CoBank and NCB will enable FCI to increase its outreach and to better support rural communities seeking to establish a local food cooperative.
“Locally owned grocery stores are a mainstay of economic and social activity in rural communities across the United States,” said Thomas Halverson, president and CEO of CoBank. “We believe that local food cooperatives are one solution to the growing problem of local grocery store closures, which is being driven by demographic trends and marketplace dynamics in the grocery industry. We’re pleased to be partnering with NCB and FCI on this contribution and look forward to seeing positive results from this initiative.”
“NCB was created to address the unmet financial needs of cooperatives across the country,” says Charles E. Synder, president and CEO, NCB. “We’ve seen the power of the cooperative business model to positively impact communities of every shape and size — and rural communities have long been some of the strongest supporters of cooperatively-owned businesses. By partnering with FCI and CoBank, we have the opportunity to address one of the critical issues facing rural America today.”
“Rural communities face unique challenges with access to affordable food, whether it’s the distance or a complete lack of a grocery store,” says Senate Pat Roberts (R-KS). “I am glad to see so many partners in the community invest in local businesses that provide small towns with a strong, economic foundation.”
Competition from big-box stores in larger communities and an aging population of owners are just some of issues contributing to rural grocery store losses. In 2016, a study by the University of Minnesota Extension surveyed nearly 280 Minnesota grocery stores. The study found that 63 percent of storeowners did not plan to own their store in 10 years, but few had developed succession plans. Shrinking rural populations are also making an impact. At Kansas State University, research by the Center for Engagement and Community Development has identified nearly 200 rural grocery stores across the state that are serving a local population of less than 2,000 people.
According to FCI, the establishment of community-controlled food co-ops has the potential to address these issues and positively influence rural communities. With support from the CoBank/NCB grant, FCI will expand its outreach programs, providing information, training and technical assistance to rural communities creating new food cooperatives. FCI will also assist these organizations with the formation of new cooperative boards, providing them with education and sharing best practices for long-term success. Over the next four years, the organization will measure its success by:
- Increasing the number of rural food co-op startups
- Decreasing the number of rural grocery closures by promoting their conversion to cooperatives
- Creating and/or preserving jobs in partner communities
- Increasing opportunities for local farmers to develop new markets for their goods
“Food Co-op Initiative is proud to provide exceptional resources – free of charge – for people in the U.S. working to start a retail food co-op that meets the needs of their community,” said Stuart Reid, executive director, FCI. “Thanks to sponsors like CoBank and NCB, new startups can use our materials and reach out to our staff for phone consultations and additional technical help. This assistance, during the early stages of development, is vital to the long-term success of a sustainable cooperative grocery store and we are so pleased to have this opportunity to increase our outreach to rural communities throughout the U.S.”