Pratt student provides insight into how coops really work with trail mix comparison
Several summers ago, Kanza Coop sponsored me to attend the Kansas Cooperative Council leadership camp at Rock Springs 4H Center. One of Kanza’s primary goals was to invest in youth to ensure a strong future for the cooperative. The camp was in its first year, and Kanza sponsored me because my father is on the Board of Directors, and my family has been longtime members of Kanza. I have also always enjoyed strengthening my leadership skills, whether it be through 4H, at school, or in the community. Here is what I learned about coops:
Imagine, the year is 1940, and electricity is coming to your home in rural Kansas for the first time. Farm resident Clyde Ellis recalls, “I wanted to be at my parents’ house when the electricity came. We’d all go around flipping the switch to make sure it hadn’t come on yet. We didn’t want to miss it. When they finally came on, the lights just barely glowed. I remember my mother smiling. When they came on full, tears started to run down her cheeks.” This is a quote by Clyde Ellis, the first general manager of the National Rural Electric Cooperative Association, recalling the night the lights came on.
The reason Ellis’s family, and many others, got electricity, was thanks to the NRECA, and other co-ops. President Roosevelt, as part of his New Deal, signed an order to make federal funds available to provide rural electric services. From that order sprung electric co-ops, which now serve 450,000 Kansans. But, Electric co-ops are just one example of the importance that any kind of co-op has in communities, especially right here in Kansas.
Last summer, I went to the Kansas Cooperative Council Leadership camp, and I got to experience, first-hand, the benefits of a co-op. When I arrived at camp, I honestly had no idea what a co-op even was. To me, it was just the place that my dad took wheat to, with the grain elevators beside it. I wasn’t wrong, but I wasn’t right, either. At camp, we ran a snack co-op called Munchie Mart with us campers as members and we sold snacks around Rock Springs Camp.
As I learned from my brief time in the snack industry, in a good sack of trail mix, there are many ingredients that play a role to create a yummy snack. The same goes for a co-op: there are many small pieces that make it run smoothly. Today, I’ll be shedding some light on the ever-elusive cooperative business by teaching you what I learned in camp, which will be focused on three main parts. The three main parts you need for a co-op to function: Ownership, User-Control, and User-Benefits. But, before that, we need to address the elephant in the room: What even is a Co-op?
A co-op, or cooperative, can be defined as a business that is owned and controlled by members who use its services and whose benefits are distributed equally based on use. Basically, a co-op is a business owned by a bunch of people who share a common goal. Most common are agriculture and electrical co-ops. For example, Kanza or Ninnescah Electric in Pratt. Kanza provides ag service to its members in Pratt, Iuka, Byers, St. John, Stafford, Andale, Valley Center, and Sedgwick. Ninnescah’s mission is to provide adequate and dependable electric service to its members at the lowest cost. But, co-ops aren’t just ag or electric. Did you know that the chain ACE Hardware is a co-op? Or that there is a housing co-op in Kansas City called Village cooperative that aims to give its 62+ years old members a carefree lifestyle? Or that name brands like Sunkist, Welch’s, Land O’ Lakes, and Ocean Spray are all co-op owned name brand foods? Or that the first co-op was established by Benjamin Franklin in 1752, and was a fire insurance co-op? Most of the following information about co-ops comes from Professor Brian Briggeman, Director of the Cooperative Center at K-State.
You know those weird dried fruits in the trail mix? How they look and feel strange and don’t seem very appetizing, but then you eat it and it tastes fine? This dried fruit is the ownership ingredient in the co-op: It’s yummy after you figure out what it is. Coop ownership may be confusing at first, just like the weird fruit, but a coop brings all the benefits and goodness of ownership. Remember, co-ops need to be owned by the members. A co-ops purpose is to serve its members!! To own something, you have to invest or put down money to start it up. The same goes for a co-op. At camp, Each of our members contributed $5 to cover the initial expenses of Munchie Mart. My father is on the BOD for Kanza co-op, said members there have to pay a $25 membership fee. Fees vary from co-op to co-op, based on the services they provide, and who they aim to serve.
After going through the dried fruit, it’s time to look at the next ingredient: granola. There’s a lot of granola in trail mix, and it’s like the nitty-gritty responsibility and power of each and every member. It corresponds to User-Control, our next key idea. It means that the members, or the people who use the services, control the company. In my camp experience, we all paid 5 bucks, so we better get some say. Every co-op member has a vote, typically a one-member, one-vote, but those can vary from co-op to co-op. Members can also serve on the Board of Directors. The BOD is in charge of the long-term goals and strategies of the business. They are at the top of the food chain, as well as the CEO’s boss, and are elected. Co-ops are a prime of democracy at work with everybody’s opportunity to vote and have a say.
Last is the M&Ms, or the good part of our trail mix. The part you always look forward to. The M&Ms are the User-Benefits. Remember, the whole idea of a co-op is to provide its members with the service they want. If the co-op isn’t benefiting its members, it’s not working. All businesses must have some way of incentivizing their customers, otherwise, they won’t buy their products. But, Co-ops have a special benefit. Because they are owned by their customers, members can receive patronage, as long as the business is profitable. Patronage is the redistribution of profits back to its members. The amount of patronage each member receives is based on how much they use the co-op’s services. The more you use, the more you can receive back. Because Co-ops are not-for-profit, they don’t pay income tax, since all their profits are given back to their members. However, co-ops do pay property, sales, payroll, vehicle, and gasoline taxes, which contribute to community tax bases, which the members are part of. I mean, come on, how many businesses that you spend money at give you money back for buying their products? Not very many, so this is one of the great benefits of being part of the coop.
So the next time you run into that Quick Trip or Casey’s or Love’s, and you grab muddy buddies, Cheetos, trail mix, Twinkies, Snickers, or beef jerky, remember what I’ve talked about today. I hope you’ll recall more about what co-ops are and how they operate. I hope that you see how diverse and intricate co-ops are. Now that we’ve analyzed the ingredients in our trail mix co-op: Dried fruit as Ownership, Granola as User-Control and M&Ms as User- benefits, we can see what a delicious snack trail mix makes, and how beneficial a business model like a co-op can be, to people who realize, they are stronger together.
Not only did I learn about what coops are and how they functioned, but I also learned a lot about leadership and met a lot of fantastic people, fellow campers and administrators alike. The connections I’ve made with other kids from all across Kansas will benefit me for years to come.