By LINDA McGURK
Indiana Correspondent

DANVILLE, Ind. — Poor, rural counties in Indiana that want to create jobs and boost economic development are sometimes jokingly told they can do “pork, prisons or poker.”

But, residents of Orange County had already shown resistance to bringing in confined animal feeding operations and rejected plans for a correctional facility. A casino did open in the small town of French Lick last year, but a group of involved citizens believed there were other ways of growing the local economy as well.

“We wanted a full-service grocery store. We had an environmental care vision and we wanted to feature food grown by local producers,” said Debbie Turner, a board member of Lost River Co-op in Paoli.

Turner participated in a panel discussion during the Oct. 9 Indiana Cooperative Summit, an event designed to showcase the diversity of cooperatives in the Hoosier state. The Lost River Co-op was one of many examples of how cooperatives – a little-known business form that emphasizes local support and member governance – can revitalize and bring new services to rural areas.

Lost River Co-op opened for business on Oct. 23, 2007, and to date the state-of-the art natural-foods store has attracted nearly 600 member-owners. Turner shared both success stories and setbacks with the crowd.

“For every dollar spent at the (Lost River) co-op, 67 cents is distributed to local and regional entities within 100 miles, to local vendors, employees and businesses,” she said. “Our biggest challenge right now is to equate the support from our members that we initially had, to continuous and growing shopping support.”
Lost River was one of several food co-ops represented at the summit, but other participants ranged from credit unions and student housing cooperatives to electric utilities and more traditional agricultural co-ops. As different as they may seem at first glance, they all share the same business model – and the challenge to educate the public about it.

“We have members who have been with us for 20, 30 years and they still call us a bank,” said Jack Sheets, president of Interra Credit Union.

Unlike a bank, Interra Credit Union is a not-for-profit organization owned by its members. Rather than maximizing profit for shareholders, a credit union returns its earnings to the member-owners through higher rates on savings and investments, and lower rates on loans.

Jill Bode, who represented Purdue University’s cooperative student housing, said she runs into similar misconceptions about the business model. Despite considerably lower rent compared with dorms and sorority and fraternity houses, the cooperative housing units at Purdue are often overlooked by students.

“Our students get Greek and they get dorms, but they don’t really get cooperatives. They tend to think that being in a cooperative means that you hold hands and say ‘Kumbaya’ once a year or so,” Bode joked.

Not only are a lot of people

unaware of how cooperatives work, but few statistics are available on the economic impact they’re having. Brent Hueth, director of the University of Wisconsin Center for Cooperatives, talked about his efforts to put some hard numbers behind the benefits of cooperatives to the economy.

“Basically, for a year and a half, all we did was trying to find all the cooperatives in the country,” he said.

Ultimately, Hueth and his research team found more than 28,000 cooperative firms and 45,000 establishments, or physical locations, that matched the four sectors defined by USDA; utilities, financial services, social and public service and sales and marketing. Using established economic models, he estimated that cooperatives nationwide bring in $220 billion in revenue and pay $19 billion in wages to 435,000 employees, with total assets amounting to $1 trillion.

When accounting for the indirect impact, or so-called “multiplier effects,” the figures grew to $550 billion in revenue and $87 billion in wages for some 1.1 million employees. And those are conservative estimates, according to Hueth.

He’s planning to continue his nationwide census of cooperatives and is hoping there will be enough time and resources to break down the data on a state level. Debbie Trocha, executive director of the Indiana Cooperative Development Center (ICDC), welcomed that possibility.

“I get phone calls all the time from people who are asking ‘Where are the co-ops in Indiana and how many are there?’ The answer is that we don’t really know,” she said.

Trocha said she felt the summit, organized by ICDC, accomplished the goal of giving co-ops the opportunity to network with each other and share ideas, and also to promote the cooperative business model.

“We definitely have to do a better job of educating the public about the benefits of being part of a co-op. Once you’re a part owner, you have some skin in the game,” she said.

“And I think once people understand co-ops, they’re more likely to become part of one.”