Cooperatives pass along savings to consumers

By Judy Waggoner
Post-Crescent correspondent

The Valley Bakers Association continues an American legacy that predates the establishment of the country itself.

As a cooperative, it functions as a business that is organized, owned and controlled by the people who use its products or services.

Nearly half of the U.S. population is an owner-member of at least one cooperative.

“Members share in the net savings of the cooperative (the sales less expenses),” explained Paul Werner, retired partner-shareholder of Schenck & Associates and a VBA advisor.

More than 20 of the 48,000 U.S. cooperatives have annual sales in excess of $1 billion, according to the National Cooperative Business Association.

The history of such organizations is extensive and, in this country, can be can be traced back to 1752 when Benjamin Franklin established the Philadelphia Contributorship for the Insurance of Houses from Loss by Fire.

Cooperatives exist for a certain kind of individual, suggested Mark Munroe, the VBA’s chief operating officer and executive vice president.

While some consumers just want to buy a product at a good price, others seek something more — those people think that if “someone will profit from my purchase, why not me?” he said.

“I liken it to someone who owns a home versus someone who rents,” Munroe said. “You can make a good argument for either side.”

Homeowners have responsibilities, take risks, pay taxes, and receive gain, or equity in return. Renters are like non-members who buy a product at a price from VBA.

Cooperatives can be organized to provide almost any good or service, but fall in three general categories.

Farmers or crafts people organize “producer-owned cooperatives” to process, market their goods, and receive credit, equipment, and production supplies.

Consumers can receive health care, utilities, insurance, or housing from “consumer-owned cooperatives.” They may buy and sell food, heating fuel, hardware or operate credit unions, childcare facilities or funeral homes.

“Worker-owned cooperatives” — businesses that are owned and controlled by their employees — can be found in almost any industry. Food stores, processing companies, restaurants, taxicab companies are some examples.

“In a cooperative, you’re always trying to give value to your members,” Munroe said.