Value of Cooperatives Seen Primarily at Local Level Study Shows Cooperatives Vital To Rural Economic Growth

A recently released report says that cooperatives are more likely than corporations to have positive economic impact on their community. The reason? Cooperatives are member-owned, with benefits to local patrons more likely to stay within the community. Other businesses, such as corporations, are more likely to have any benefits in the form of dividends distributed mainly outside the community, and local ownership is often missing.

The report, “Measuring the Economic Impact of Cooperatives in Minnesota,” is a public-private partnership between the Minnesota Association of Cooperatives (MAC), the USDA/Rural Development, the Minnesota Secretary of State and Minnesota State Colleges and Universities (MnSCU)-Mankato.

The study suggests that among the 311 cooperatives and 185 credit unions surveyed, benefits attributable to local ownership and single-level taxation amount to increases of $600 million in output, employment of 7,725 and tax revenues of $210.5 million.

“The report supports our assumptions about the role that cooperatives play in their local communities,” says Bill Oemichen, President and CEO, MAC. “The cooperative form of business is an excellent tool in promoting rural economic growth as well as local leadership development.”

State Director of USDA Rural Development Steve Wenzel states that Minnesota is the leading cooperative state, with 1,026 total cooperatives. “USDA estimates that Minnesota currently has 347 agriculture co-ops and that these co-ops results in $17.257 billion in total economic impacts, with $647 million of the impact attributable to the cooperatives structure,” he says.

Responding cooperatives represented 44 business sectors and had 943,450 members, representing an estimated 50 percent of all cooperative members in the state of Minnesota. The 185 credit unions serve another 1,457,183 members.

Recommendations made in the report state that policy considerations should foster an environment conducive to the development and investment in local business enterprises by community members.

The full report is available at the Minnesota Association of Cooperatives website, www.wfcmac.coop. Copies can also be obtained by calling MAC at 651.228.0213 or USDA at 651.602.7803.