Market Farming

["Rick Williams" <mrfarm AT frontiernet.net>]

> Those "failures"  referred to can't be pinned on any inherent flaw in the
> coop concept. ALL types of business run into problems; it's human nature.
> Think ENRON. Think GLOBAL CROSSING, HALLIBURTON, & STOCK PRICES.

The failures are due primarily to changes in the market and the decisions of
the management. In most large coops there is a lot of "things" going on that
are unethical. Such things as paying board members more for their products
to lots of perks for the board members helped along by the management. In
fact, the managment controls too much of the real decision making. This is
because of the distance from the owners. It gets too big and beyong the
mangement ability of the typical owner (patron). It is just a fact of life
with size and human nature.

With conventional corporations you can also have unethical individuals. Plus
you can have conditions that are favorable in a certain direction for a very
long period of time (up) and stockholders do take the position that "just
keep doing it and make me a lot of money." Human nature. No one wants to see
it stop. But if there are too many "tulip bulbs" in the pipleline, things
eventually collapse. And if the exceptionally unethical people have done a
lot of "things," then you have disasters like Enron, and GC. It is a
combination of board members who may be lied to in some cases or who are
incompetent or complicent with the activities.

> Also,
> many kinds of coops have to function under all kinds of regulatory burdens
> and sometimes in competition with corporations that have just about every
> subsidy and loophole imaginable written into the law to favor them.

Coops have some favorable things too that business doesn't have, but the
biggest problem is raising capital.

> Corporations plow investors money into grabbing more market share, and
> that's probably where you see coops having trouble with enough
> capitalization to compete with them. The insurance racket is hardly a fair
> test for co-ops.  It's not a level playing field.

In fact, what were many (most) of the early successful insurance companies?
They were mutualized. Your apparent demonizing of insurance as a racket
suggests to me that you have a negative bias there as well. If you do your
homework, you will find many mutual companies are no longer mutuals. In
order to have more capital to work with, they either had to go to their
members or raise their rates. It is often not an option since they must
remain at least reasonably competitive.

For those of you who are familiar with many coops, in particular farm coops,
they generally do not perform well for their patrons in terms of service,
adaptability to the market, or particularly in terms of value. That is why
so many farmers will no longer do business with a coop.

Remember, that Wisconsin was one of the primary leaders in cooperatives so
we have many of them here.

> As for farm coops "going
>  bankrupt", I'd have to see some hard figures before I'd believe it's even
> worth a mention.  All that sounds like badmouthing coops to me. It sounds
> like more corporate propaganda.

What is your definition of corporate propaganda? You are beginning to sound
rather odd about this. I work for a cooperative and have for over 28 years.
I own portions of many companies as well as most of the members of the list
surely do. So we are all owners of companies (corporations) and in some
cases may be patrons of cooperatives (e.g., County Farm Bureau Cooperative,
Local Oil coop, Local Farm Coop (2 actually), Rural Insurance (owned and
controlled ... by farmers through the Farm Bureau, etc.) I even had a term
life insurance product with New York Life Insurance Company for several
decades. And NYLIC is one of the few real remaining mutual life insurance
companies.

Sincerely,

Rick Williams
Misty Ridge Farm
Dairy heifers and dairy beef graziers
Viroqua, WI

www.mistyridgefarm.com