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The Rural Voice, 2001-04, Page 40consumers to trace the history of a package of meat right back to the farm it came from. In getting co-ops going he often makes use of a top food consulting company, LeCureux said. Bringing in expertise is one of the keys to making a venture work. "Hire the rightmanager and get out of the way," he advised. But before even a manager is hired, he advised being selective in the qualifications of those being chosen for the steering committee. Every venture needs a champion — "a wild-eyed visionary" — to provide the drive to make it happen. Everyone involved in the project needs to understand their roles and responsibilities. The. steering committee, and eventually the board of directors, needs doers, critical thinkers, visionaries, a secretary, a facilitator, a 'co-ordinator and a team builder. He suggested bringing non -farmers onto the board who bring different areas of expertise such as lawyers or bankers. The board must understand that its role is to hire and fire the manager, provide fiscal over -sight and strategic planning for the company. It is not to make day-to-day decisions like the colour of the brick on the plant. Two characteristics of farmers can get in the way of success, LeCureux said. For one thing farmers like to build consensus but on a board of directors or steering committee, "You have to have votes and everyone on the board has to realize that, win or lose, people have to fall in step." As well, once in such a venture, the farmer has to think about the company, not how it affects his or her own farming operation. "If you're making every decision on how it's going to affect my farm, you're going to get in trouble." Ironically it is farmers who have the fewest personal options that may be the most successful in creating more options for their farm products, he said. In the great plains area of the U.S. a farmer is miles from towns or other potential sources of employment. If he's going to give up farming he has to look at selling the farm and unrooting the family to move far away. Given this alternative, farmers have been desperately fighting to take control of 36 THE RURAL VOICE their futures. But in Michigan, it's easy for a farmer to take an off -farm job to supplement income or he may rent out the land completely and continue living on the farm while working in town. The motivation to create alternative markets is not so strong there. Also speaking at the Formosa meeting was George Alkalay who has helped put together such new - generation Ontario co-ops as the Farm Fresh Poultry Co-op in Harriston. Canadians are very good at developing the type of niche markets these ventures fill because "we don't really have a choice," he said. Farmers have an opportunity to add value to their product, Alkalay said, but the closer you take your product to the consumer, the more expensive the investment will be. "Primary processing is easy," he said, which is why some co-ops stop at the level of a kill and chill plant, for instance. At the same time, however, each step captures a bit more money to the producer. He echoed LeCureux's statement that farmers must change their way of thinking in planning a vertically - integrated venture. "Instead of trying to find a market for the product you must look at the market and provide a product for it. Finding the market and selling into it is the challenging part." The simplest reason to co-operate with other farmers is because you can't do it yourself, Alkalay said. That co-operation need not necessarily be in the form of a co-op. "Don't assume that a co-op is the way to go," he advised. There are other ways of meeting the needs of a venture. A simple solution may be a partnership or a limited partnership. It might be best to explore a corporation. There might be joint ventures and strategic alliances. "One of the traps we have to face is that we think we have to own bricks and mortar to add value," Alkalay said. If a new -generation co-op is the direction of choice, it still operates like a traditional co-op with one vote for each member. What members who invest more get is a the right to supply more product to the co-op. Members sign binding supply agreements controlling the amount and quality of product to be delivered to the company. The co-op needs to know it will have a consistent, quality supply, Alkalay said. "When you have that kind of agreement with your producers who are also the owners, you are have a real competitive advantage." , Membership in new -generation co-ops is generally limited to the first people who come along with enough production to meet the needs of the company, he said. "Once you fill the needs of the company you won't sign any more members." The strength of a new -generation co-op is that it allows farmers to diversify and manage on-farm risks. For instance in hogs, production and processing are generally counter- cyclical. If the price of hogs is high, farmers make money and processors don't. If hog prices drop, processors are profitable while producers hit hard times. "If you own hogs and hog processing, you spread your risk," Alkalay said. Being part of a further -processing business also allows farmers to gain more knowledge. "When a farmer become a processor, you sit down at the industry table." This can reduce the tensions between producers and processors. "When you have an antagonistic process youhave huge costs," he said. Alkalay agreed with LeCureux that member commitment is essential for success. "Don't run to the government and ask for help," he said. "As soon as you do that, you're not acting like entrepreneurs." If government money is available you can take advantage of it like any other business but the basis of the co-op should be membership investment. But money is not a challenge if the idea behind the co-op is sound. "There is tons of money chasing too few good projects," he said. But getting good ideas is essential. He advised people to visit Toronto grocery stores and see what's being sold there. "That's where the market is headed," he said. Giving producers an idea of where the market is headed was Dr. Gordon Surgeoner, former University of (.)