The rise and fall of the farmers’ cooperative movement.
By Will Winter
I used to love to listen to Acres U.S.A. founder Charles Walters rhapsodize about the days when farmers actually had power and when they did what they had to do to get a fair shake — both from the government and when selling their crops. He talked a lot about “parity” — a great concept that was just out of reach of the average farmer.
The influence of farmers disappeared all too soon. The good organizations that had given them the power to achieve their constitutional rights, such as National Farmers Organization (NFO), slowly eroded away, both internally and externally. Today, farmers sit at the local cafe scratching their head and wondering how it is that they seem to get shafted every time they turn around.
I moved to Minnesota many years ago, and even though we are a blue state, we don’t actually have a Democratic party, per se. What we have is called the DFL — the Democratic Farmer-Labor Party — meaning that at some point in the foggy past, farmers realized the importance of uniting in some way with urban workers. After all, most of the needs for safe shelter, fair wages and medical care were identical (and were being equally ignored by those in power).
Another oddity of living here in Minnesota is that many of us shop for almost all our groceries at what we refer to as “the co-op.” Even though they truly are co-ops — meaning they’re member-owned — they are really no longer fully democratic in the sense of “one person, one vote.” These modernized versions are run by a board of directors and have an executive director, more like a regular business. We no longer clean our own peanut butter paddles or fill the bins with flour. We can still volunteer, and many of us do, but the real work is done by hired employees and supervised by hired managers.
Even though we all eat, most city people have no idea where their food comes from, and frankly, most Midwestern farmers raise crops that can’t be eaten by humans. Politically speaking, the majority of Minnesotans have probably never given one thought about what “DFL” stands for. For food, most Minnesotans either go to supermarkets or to big-box retail grocers like Walmart, Costco, Aldi’s, Target or Sam’s Club.
What happened to those “good ol’ days” of cooperation, local food production and unity among farmers?
How the Co-op Movement Started
The cooperative movement started in Europe back in the early 1800s, but one might say that the formalized cooperative movement in America began about the time when farmers moved from natural horsepower to the power of the internal combustion engine. Tractors, gleaners and other machinery were sold as God’s gift to modern farming.
But sadly, and not surprisingly, family farmers soon became pawns in the game run by who controlled the flow and price of refined fossil fuels. And that power clearly belonged to the huge oil companies — actually, the families of the global oligarchs that owned them. During one of the massive farm recessions in America in the 1920s, farmers were in deep trouble. Not only was the price of fuel out of reach; farmers were not price-makers for their crops and livestock — they were stuck being price-takers.
It’s hardship and suffering that brings action, not the fat and happy times, and the first meeting that dealt with these issues was in Cottonwood, Minnesota, in 1921. Out of that meeting, the first “petroleum consumer cooperative” was founded. At the Cottonwood Oil Company, farmers could collectively make large-scale purchases of petroleum, then farmers could buy it from the co-op filling station at cost. All the savings went directly to the farmers.
Actually, prior to that, there were already existing farmer cooperatives, and they were very popular in Minnesota. The Equity Cooperative Exchange, for example — a grain marketing co-op founded in 1908 — was a classic case of rural organizing. By 1914, over 40 percent of Minnesota dairy farmers patronized cooperative creameries.
The Capper-Volstead Act of 1922 was a federal law that protected these farmer co-ops from antitrust laws so they could remain competitive. In spite of the fact that “old-line” corporate oil companies tried to drive the co-ops out of business by dropping prices far below cost of production (in some cases dropping it to a penny a gallon!), the co-ops thrived. By 1921 there were 40 more petroleum co-ops in Minnesota and the trend was spreading across the nation. Before long, the Cottonwood name was changed to “Minnesota Cooperative Oil Federation,” and by 1927 it had become so multi-state that the name was changed to “Midland Cooperative Oil Association.”
But this was not just about getting cheap petroleum. These farmers felt a heartfelt need to address other social issues, as well as a desire to resist the rampant explosion of crony capitalism. Midland director Joe Gilbert, when hired in 1936, was warned by his board, “Now we don’t want any of that Russian stuff…” referring of course to the movements of both communism and socialism.
Neither were on Mr. Gilbert’s radar; he merely stated that the co-op movement was not just about savings farmers money, but also about challenging crony corporate capitalism itself. How? He said he would reinvigorate an economic democracy in which every player had a voice. He called for a “cooperative commonwealth” for everyone’s benefit. This is what a Norman Rockwell cover painting of rural America looked like back in the 1940s!
It also caught the ears of, and inspired, the farmer immigrants from Finland in northern Wisconsin and Minnesota. They praised all community works that promoted social issues such as preventing poverty, sharing the riches, equality, and freedom to farm without excessive intervention. In 1930, Midland had joined forces with the Cooperative League of the U.S.A., which had been originally founded in 1916 by socialists and radicals. The key tactics were to be education, alliances and membership growth. Hundreds of “field men” were hired basically as evangelists to spread the word to rural communities far and wide. Because education is a powerful tool, it worked beautifully. Capitalistic corporations get bigger by taking advantage of uneducated people and can thus keep them down. By 1938, 7,600 farmers attended co-op discussion groups, and over 10,000 farmers attended some of the larger meetings.
Midland then began the establishment of cooperative grocery stores in the early 1930s. Other new departments came next — credit unions for insurance needs, the electric cooperatives (rural electrification) and many others. When World War II broke out, Midland invested in petroleum refineries and oil wells to help the war effort. They expanded into tires, fertilizer, seed and other needs of farmers and ranchers. Next, Midland reached out to urban labor unions and organizations forming alliances with the Farmer-Labor Party and with CLUSA. By 1950, the marketing and purchasing co-ops had a staggering 20 million members and customers nationwide.
What the oil cartels could not accomplish by rigging their prices to kill the co-ops was done by the government itself, which, even back then, had begun to primarily serve the wealthy classes. The government was the enforcer to abet crony corporate capitalism. They said that coops were unfair; co-ops were “tax evaders”; and, falsely, the movement was “communistic” in nature. There were even claims that the co-ops were linked to the Soviet Union!
These false attacks put Midland and CLUSA on the defensive. They refuted the claims that would deny their tax-exempt status, showing that the farmers actually did pay their fair share of taxes and that their savings were fully reported in the form of income tax. My own brother-in-law, a son of Finnish immigrant farmers who moved to Oulu, Wisconsin, wasn’t able to play with other farm children because the neighbors told them, “You will not play with children of communists.”
A few years later, when WWII broke out, it was hard to hold the line against crony corporate capitalism because anything could be made to sound anti-American. Even when Midland pointed out that the Rockefellers, the Rothschilds and other oil families were continuing to ship oil to Japan and Germany and that the American and British arms manufacturers were continuing to sell arms and war equipment to Germany, it was of no use.
Midland encouraged farmers and labor members to support the American war effort. They campaigned for the essential nature of free speech as the best way to combat Hitlerism on the home front, even though radio stations of the day boycotted co-ops, refusing to give them airtime. Midland urged people to pressure their legislators to correct the obstructions to African American voters in the South. Anything that was undemocratic was fought. Their promotional campaign encouraged the purchase of war bonds.
In the end, though, the pervasive war politics reinforced Midland’s view that profit motive was the corrupting force in all dealings. Cooperatives maintained that cooperative communities were the true promotors of peace. Midland offered antidotes to the causes of all war: profits, poverty and racism.
After WWII, there was a shift in the tone of politics and social work. Even organized religion’s enthusiasm for cooperatives waned as they slowly shifted their loyalty to the power of moneyed people. It got so bad that merely criticizing anything about corporate capitalism incurred the wrath of the average American. Midland and many other cooperative movements were forced to soften their tone and move into other ways to achieve membership and participation.
Midland realized that the postwar situation, just like the aftermath of the Great Depression, was time for action. The peaceful and prosperous postwar time offered amazing opportunity to create the kind of society that could press for truly level-field democracy, civil rights and citizen participation in the reconstruction of a just economy.
However, that was not to be. The firebrand leaders of the movement retired or passed away, and postwar Americans were busy buying cars, air conditioners and televisions. They yearned for bigger tractors and no longer came to the free organizational meetings. But Midland churned on, generating a storm of pamphlets, books and instructional promotional materials that showed postwar Americans what was possible. Not enough people were interested.
Midland began to adopt the ways of large corporations. People didn’t want to come to grassroots meetings, so Midland’s advertising budgets skyrocketed. Members were less and less moved by social and educational causes and ideology but were enamored by the material benefits of cheap goods. No one at headquarters knew where to draw the line.
Could the 1960s Revive Things?
For the first time in several decades, the 1960s brought sparks of interest in the principles and social mores of the cooperative movement. It was almost as if Americans were beginning to “wake up” — to begin to feel the social costs of a rampant crony corporate capitalistic culture. The farmer-owned cooperatives of the day supported the civil rights movement as well as LBJ’s War on Poverty. Even though many of the urban labor unions had been busted earlier, there were still connections and some revival and cooperation. Buying clubs and grocery co-ops began to flourish again in many urban areas — a presence that we are still seeing in our area today.
But it was not enough. Farmer members were much more interested in economics than in philosophy. Politicians continued to preach scale (“get big or get out”) and were becoming dependent upon global markets. As a result, farmers were turned against each other, as competitors and obstacles to each other’s growth. Why would anyone want to cooperate with other farmers?
The Beginning of the End?
When Midland merged with Land O’Lakes Cooperative in 1982 to become one of the largest cooperatives in the country (second only to the Minnesota-based agricultural co-op CSH, Inc), it was the end of an era and the beginning of something new. Midland adopted the Land O’Lakes name and fell into line with their operations.
Farmers today are increasingly out of touch with their neighbors. Farm communities and farm towns are evaporating and falling into disrepair. Farmers get their news from television stations owned by a handful of corporate moguls where false news is indecipherable from the truth. Churches are either being abandoned or converted into massive corporate or capitalistic structures that preach different gospels. Our government agencies exist primarily to serve the agricultural giants, and our courts consistently give out decisions in favor of Goliath over David. Where are the leaders of farmer cooperative movements today? Will it take an even larger crisis to reawaken those who long for cooperation, local food production and unity among farmers?
Will Winter, DVM, is the author of The Holistic Veterinary Handbook. He is the herd consultant for the Thousand Hills Cattle Company and raises hogs, sheep and goats at Lucky Pig Farms in Minnesota.