January 1983 // Volume 21 // Number 1 // Feature Articles

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A Way To Fight Inflation: Food Cooperatives

Extension's role In educating consumers on food cooperatives is based on Michigan's experiences. These guidelines may provide you with an educational program to help fight inflation.

Elizabeth Chase Scott
Extension Specialist in Food Policy Department of Agricultural Economics
Michigan State University-East Lansing.

Are your clients caught in the bind of ever-increasing food prices? Do you find families with whom you work sacrificing quality to make ends meet? Are you wondering if there's any solution? For people who are willing to work a few hours a week in exchange for lower food costs and higher quality, the answer may be a food cooperative.

A food cooperative can be a large or small group of people who own and operate their own store, The store is not run for profit, but to serve the needs of its members. Co-op stores are open during regular business hours and are often open to the public. The shelves are stocked with whatever the co-op members have collectively decided to carry. This may mean a limited line of products or it may be a large and diverse supermarket.

Another kind of food cooperative that's rapidly gaining popularity, especially in rural areas, is the pre-order cooperative1. In a pre-order cooperative. the members order food together directly from a wholesaler. After it's delivered to a local distribution site, the members divide the food into individual orders and take it home. Buying is usually done monthly, but some groups buy weekly.

In October, 1980, the Michigan State University Cooperative Extension Service received a grant from Title 1A of the Higher Education Act to implement a statewide project educating consumers about food cooperatives, Research data gathered during the Michigan project provide insight into whether food cooperatives might benefit people in your county and how you. as an Extension agent, can help.

Why Start a Food Cooperative?

The decision to start a food cooperative should be made by the people who will join the cooperative and operate it. not by Extension. Because co-ops are owned and operated by the members and are a distribution system that's new to many people, there may be some opposition to the idea within the community, especially at first. Retailers are sometimes concerned that the co-op will hurt their business.

However, formation of a food cooperative is free enterprise working to ensure that the best system will survive. If the co-op is efficient and serves the needs of its members, it will prosper. In any cooperative, coop- eration is an important principle. In some instances, the members of a local co-op have actually helped a small local retailer stay in business2.


When the nation's inflation rate hit double digits, many consumers began looking for ways to cut costs without sacrificing quality3. One logical solution was to buy in bulk. Many people discovered that by getting together with friends and neighbors. they could buy in large quantities and save up to 40% on the food purchased. The logical outcome was the establishment of pre-order food cooperatives4.


Food cooperatives offer the opportunity to buy food products of all types more directly from the producer. Some items may come from local farmers and others from a wholesale distributor. Therefore, food is purchased closer to its source. Peak flavor and nutrition are preserved by avoiding products that may spend considerable time in transit or sit on retail grocery shelves a long time.

With savings across a large variety of foods purchased, food dollars stretch further. Most families who join food cooperatives report they do less impulse buying. plan meals more carefully, and cut down on salt and sugar intake5. Some pre-order cooperatives promote nutrition because members actually order their purchases by the basic food groups6 .

LeadershIp and Career Skills

Many people reported they joined the foofj cooperative to save money and buy better food, but they stayed in the cooperative for other reasons7. Food cooperatives offer an opportunity for meaningful actiVIty outside the home The very nature of the "every-one-cooperates-and-participates" philosophy fosters an opportunity to get involved. Leadership skills develop among people who have never had such an opportunity before.

Over 80% of the workers in food cooperatives are women (see Table 1). Some of these women have never worked outside the home. By participating in the co-op. they gain skills in bookkeeping, scheduling, buying, organizing, and money management-for, in effect. the food cooperative is a small business.

Community Development

Starting a food cooperative can be the beginning of the development of a new spirit of cooperation in the community.8 Many co-ops use local churches, schools, or public buildings for the distribut ion sites. This cooperation often leads to the organizations learning to work together. When people discover what they can accomplish together via a food cooperative, they're ready to try other projects.

New friendships and opportunities for social interaction are encouraged. Co-op members reported they got to know people who had been neighbors for years, but with whom they'd never really talked. Now they not only talk to each other, but they're working together.

Table 1.
Characteristics and Behavior of Food Cooperatives Members

Percentage of co-op workers who are women
Median age of workers
Members completed high school
Members completed college
Women who don't work outside the home
Median persons per household
Median income
Expect to continue membership at least:
6 months
12 months
Rate quality of food
Better than store
Same as store
Not as good
Number 1 reason for joining
Quality of food
Cost of food
Other reasons
Tried new foods
Cut down on consumption of salt and sugar
Dollars saved per hours worked
Source: Ellis Perraut and others,"Socio Economic and Nutrition Audit of Pre-Order Food Cooperatives in Michigan," Staff Paper 81-96 (East Lansing: Michigan State University, Department of Agricultural Economics,1981)

Extension's Role

The idea of consumer food cooperatives is compatible with Extension's goals. Many Extension home economists are already teaching some of the skills necessary in operating a food cooperative. Agricultural agents have contacts that can be sources of food for the newly formed groups.

Experience in Michigan shows that it's best for the Extension agent to begin by working with a small group of 25 to 35 families in a relatively close geographical area. Once the first group is off to a good start, the idea will often catch on by itself 9. Soon members of the co-op will be helping others in the area get a similar group started.

Getting Started

Extension's contacts with community members and access to media coverage can be instrumental in getting a group started. Often the first step is holding an information-sharing meeting. The Extension office can then serve as a contact point where interested people can get in touch with one another. Providing help in maintaining a mailing list of interested people, placing announcements in a newsletter, duplicating fliers and informative handouts. and writing news articles can serve as the needed impetus to the formation of a group.

The Organization

Once community interest is strong enough to warrant a public meeting. Extension can help even more. The agent can teach the skills necessary to run an effective organization. Technical skills such as establishment of by- laws, incorporation as a cooperative, sales tax licenses, and other necessary steps are easily learned and retaught by Extension personnel.10

Food Sources

Creative individuals can usually find a number of different sources of wholesale food. Start with the telephone book's yellow pages where wholesale distributors are listed. Local farmers are often pleased to sell to a co-op because they can usually sell at a better price, while still passing along considerable savings. Sometimes a local retailer allows the co-op to purchase in bulk. He can charge a smaller markup than usual because of savings in handling costs.

Food cooperatives provide an excellent opportunity for Extension programming that can have a positive impact on individuals and a community. Because co-op members learn by doing and help themselves in the process, the skills they learn will have a lasting effect on the quality of their lives...

Continued Support

Once the food cooperative is running smoothly. Extension can help provide continuing education. Lessons on money management, food preservation,cooking, and nutrition may be included as part of a co-op's newsletter or during membership meetings. In addition. the Extension agent may be called on to help with specific problems such as bookkeeping or storage of a food item.


Food cooperatives provide an excellent opportunity for Extension programming that can have a positive impact on individuals and a community. Because co-op members learn by doing and help themselves in the process, the skills they learn will have a lasting effect on the quality of their lives. And. because of the food dollars saved. Extension can help clients combat inflation and at the same time ensure better nutrition.


  1. Ronald Cotterill. "Consumer Food Cooperatives in Michigan," Staff Paper 81-14 (East Lansing, Michigan State University, Department of Agricultural Economics, 1981).
  2. Martha Bush and Elizabeth Scott, "Case Study: Rock Food Buying Club," Staff Paper 81-84 (East Lansing: Michigan State University, Department of Agricultural Economics. 1981)
  3. Elizabeth Scott. "Case Study: Emmet County Food Cooperatives," Staff Paper 81-75 (East Lansing: Michigan State University, Department of Agricultural Economics, 1981).
  4. Ibid.
  5. Ellis Perraut and others, "Socio-Economic and Nutrition Audit of Pre-Order Food Cooperatives in Michigan." Staff Paper 8l-96(East Lansingi Michigan State University. Department of Agricultural Economics, 1981).
  6. Julia Micheal and others. "Case Study: The Levering Food Cooperative." Staff Paper 81-76 (East Lansing: Michigan State University, Department of Agricultural Economics. 1981).
  7. Perraut, "Socio-Economic and Nutrition Audit."
  8. Scott, "Case Study: Emmet County."
  9. Elizabeth Scott, "Case Study: Bay County Food Cooperatives." Staff Paper 81-60 (East Lansing: Michigan State University. Department of Agricultural Economics. 1981).
  10. Ronald Cotterill and Elizabeth Scott, "Cooperative Food Buying," Staff Paper 81-59 (East Lansing: Michigan State University, Department of Agricultural Economics, 1981).