Now is the time for Congress to invest in cooperatives

With Fiscal Year 2019 funding complete, now is the time for Congress to consider how to increase support for this proven business model.

Last week, overwhelming majorities of both the U.S. Senate and the U.S. House of Representatives passed legislation to fund the federal government for the remainder of Fiscal Year 2019.

While an important debate surrounding our nation’s immigration laws continues, the passage of this legislation also finally provides much needed funding certainty for numerous critical government program—including programs critical to the cooperative community. Importantly, as Congress restored funding for programs like the Rural Cooperative Development Grant (RCDG) program, new grants and loans can be administered through the U.S. Department of Agriculture (USDA) and the Small Business Administration (SBA) to ensure businesses, among them cooperatives, can continue to invest and grow.

We should first take a moment to recognize cooperatives that stepped up for their members and neighbors during the government shutdown. For example, many credit unions offered no-interest loans to members who were furloughed federal employees. Similarly, many utility companies chose not to disconnect power services for members working for the federal government without pay. And neighborhood food cooperatives provided zero-interest credit so that families impacted by the shutdown wouldn’t go hungry. These are just some of the many examples of cooperatives living out the seventh cooperative principle of care for community.

With the threat of another reckless shutdown behind them, the 116th Congress should focus its priorities and Fiscal Year 2020 funding levels on supporting people who seek to develop and grow cooperatives. First, Congress should increase funding for USDA’s Rural Cooperative Development Grant (RCDG) program, which funds development centers providing technical assistance and support for the creation of cooperative businesses across rural America. Unfortunately, this program has received relatively flat funding over the past decade. For generations, cooperatives have been a key economic strategy in rural communities, and it’s time for Congress to increase investment in the RCDG program so that more people can look to cooperatives to help capture economic opportunity.

Second, Congress should ensure the SBA fully implements the Main Street Employee Ownership Act. This legislation made important changes to expand eligibility to the SBA lending programs and equipped SBA with new tools to better serve member-owned businesses. As a generation of baby boomers nears retirement, a unique opportunity to expand ownership, keep small businesses intact and retain jobs in local communities presents itself. SBA should swiftly finalize the commonsense regulations as required by the Main Street Employee Ownership Act to ensure cooperatives have access to these lending programs.

Finally, Congress should direct strong international development resources to help people in developing regions use cooperatives to become more self-sufficient. Around the world, USAID’s Cooperative Development Program promotes inclusive economies and empowers individuals to better provide for themselves and their families, and meet the unique needs of their communities. These funds help more individuals start businesses, access critical markets and create a more secure livelihood. The funds through USAID are imperative to promoting democratic principles and economic growth.

Cooperatives are the preferred strategy for people seeking to empower themselves in their economy and their communities. With Fiscal Year 2019 funding complete, now is the time for Congress to consider how to increase support for this proven business model.

—Doug O’Brien is president and CEO of NCBA CLUSA, where he works with the cooperative community to deepen its impact on the economy. Greg Irving is a research assistant at NCBA CLUSA.

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