Food cooperatives 101: an introduction: Judy M. Willis explains the inner workings of your neighborhood co-op

New Life Journal, April-May, 2003 by Judy M. Willis

Cooperatives both resemble and are distinctly different from traditional businesses. Like for-profit enterprises, cooperatives are generally incorporated under state law, occupy similar physical facilities and follow sound business practices. The differences center on cooperatives' purposes, its ownership and control, and how benefits are distributed. The following principles, adopted by the International Cooperative Alliance, guide cooperatives in maintaining both the spirit and the structure of cooperation.

* Open and voluntary membership

* Democratic Control: one member, one vote

* Membership education

* Political and religious neutrality

* Limitation on the number of shares owned

* Limited interest on stock

* Goods sold at regular retail prices

* Net margins distributed according to patronage

The application of these principles and practices represent more than just good business sense; they are recognized in state and federal statutes and regulations as criteria for a business to qualify as a cooperative.

In the case of a food co-op (as in other types of cooperatives), members gain benefits and services that other grocery stores can't provide. Acting collectively gives food co-op members economic advantage and bargaining power. Also, when income is generated from efficient operation of the food co-op, these earnings are returned to members in proportion to their use. Members of a co-op are also owners, and as owners, they control the activities. At many food co-ops, members have the option of voting at annual membership meetings and indirectly through elected board of directors. Many members enjoy the ability to take part in some of the many decisions involved in running their food co-op.

Only members can participate in the election of directors and approve proposed major legal and structural organizational changes. Member-users select leaders and possess the authority to ensure that the cooperative provides the services required. This allows the cooperative to focus its energies on serving the membership, rather than earning profits from outside investors or other objectives.

At many food co-ops, members have the option of becoming worker-members, which means that they can work in exchange for all or part of their membership dues. This hands-on participation really helps people feel they are a part of their store. The community feel of most food co-ops is one of the biggest advantages to shopping there.

Food co-op members also benefit from the patronage refund system, which works different ways depending on your co-op. This system usually refunds a percentage of the member's purchase to them, either at the time of purchase or in a lump sum at the end of the fiscal year. Although co-op members participate in a cooperative to have access to services and to take part in their community, not as a monetary return on capital investment.

Often too small to gather appropriate resources needed to provide the services members require, many cooperatives find that by working collaboratively with other co-ops the pooling of personnel and other assets can provide services and programs at a lower cost.

In short, the benefits of being a member of a cooperative include the following:

* Access to quality supplies and services at reasonable cost

* Increased clout in the marketplace

* Shares in earnings

* Political action

* The enhancement and protection of the local economy

* A true sense of community

Cooperatives exist worldwide and may also provide housing, child care, product marketing, banking, Insurance and hundreds of other products and services. These common principles further the philosophy that we are one people working in conjunction with each another to achieve a humane and self-sustaining society.

Judy M. Willis is Health & Education Coordinator for Sevananda Natural Food Cooperative located at 467 Moreland Avenue in Atlanta, Georgia's Little Five Points, (404) 681-2831.