Agricultural Cooperatives and The Miscommunication Issue

From the labour shortage to lacking understanding of how to implement new technologies to miscommunications with farmers and through to the fear of a potential ag trade war, cooperatives seem are currently in a period of critical development and change.

Though some of the challenges they are facing are related to the agricultural sector in general, a specific and critical challenge for the coop has advanced in increasing miscommunications between themselves and their farmers.

No organisation’s existence would be possible without proper, fluid and flawless communications between its members. Communication is essential for today’s cooperative and makes it possible for these bodies to overcome external challenges that will benefit the agricultural community as a whole.

Since a coop’s main objective is to create benefits among their members (usually benefits that the latter would not be able to achieve individually) it is crucial for the modern farmer to trust, engage, and communicate properly with their cooperative.

According to Strategic Initiatives Vol. 1 by The Hale Group, managing internal conflict can be a bigger challenge for some cooperatives than remaining competitive in the marketplace.  

From their research, the main internal communication issues rally between:

1-Membership Distrust of Management

2- Conflict Between Large and Small Members

3- Members’ Misunderstand Industry Conditions

4- Inherent Conflicts of Interest on the Board

Consequently, members who lack understanding of internal practices are conflictual and are more prone to have a negative attitude towards their cooperative, possibly leading to weaker performance by the coop.

Regarding miscommunication, a two-stage Delphi survey was conducted, followed by expert panel sessions in Washington, D.C. and Minneapolis, Minnesota and the conclusion on how to overcome this problematic was divided into three major categories:

Educate and Empower

First is the need to educate members so that they understand and are involved in decisions on retaining funds, managing equity, distributing profits and rationalizing business operations. This challenge has grown as cooperative memberships have become more diverse and geographically dispersed.

Communicate Value Internally

The second challenge is the need to communicate the value of the cooperative to members and potential members. Cooperative managers and directors appreciate the unique cooperative business model but tend to do a poor job of communicating that message to others who are less familiar with it.

Communicate with the Market

The final communication challenge is describing the cooperative’s business model and value to the public. Cooperatives are particularly concerned with reaching younger audiences who are the next generation of members and employees. This concern is not unique as the aging farm population is an issue the whole sector is sharing and trying to overcome.

It is of major desire to try build a strong relations between the farmers and their co-op since as these bodies allow farmers to be more competitive in their market, empower their position throughout the supply-chain, and give access to fairer product prices. Moreover, without the coop, farmers would engage in expensive activities such as marketing transactions, which are not easily accessible to isolated individuals.

As agriculture at the epicentre of U.S. economy, cooperatives play a crucial role for the stability of the industry. By acting together, the opportunity delivered can be of great benefit for farmers, however, it will require time and patience to recover the relation between these two important actors of the ag supply-chain.  

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