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Board of Directors REPORT: Why is October Co-op Month? PDF Print E-mail

by Bob Lyons
October 2014

Perhaps cooperatives and harvest time are inextricably linked. After all, close to 30% of farmers’ produce is marketed through cooperatives in the United States. Agricultural cooperatives produce, process, and market all kinds of commodities, as well as provide financial services such as credit to their members. Many major brands are actually agricultural cooperatives; big businesses that nevertheless are controlled by their members and re-invest and distribute profits to their members. Some of these familiar brands are Ocean Spray, Sunkist, Welch’s, Florida’s Natural, Blue Diamond, Land O’ Lakes, Cabot Creamery, and Organic Valley.

These businesses are all organized around the cooperative principles, the same ones that took root in the Rochdale weavers’ community back in the 18th century. The concept of members organizing around needed services, investing together, controlling their future democratically, and returning profits according to patronage is such a powerful model that it has roots throughout the economy.

Cooperatives exist in education with child care and preschools. They are a big part of the financial sector with 8,000 credit unions providing services to over 76 million consumers throughout the U.S. Consumer health care cooperatives have been squeezed in the ever-increasing cost of health care, but purchasing cooperatives for health care and pharmacies have grown in recent years. Worker-owned cooperatives have emerged in the home health care field, serving the workers with higher pay and a say in governance. There are close to one million cooperative housing units serving mixed-income persons. Mutual insurance companies are cooperatively organized, providing services to their members, not an investment tool to make profits for outside investors. The Philadelphia Contributionship was founded by Benjamin Franklin and others who sought a cooperative solution to protecting their homes and businesses against fire. In operation since 1752, it is the oldest cooperative enterprise in the country. Marketing cooperatives exist to provide the economies of scale to independent businesses, such as Ace Hardware, True Value, or Best Western. Utility cooperatives were formed to serve members in rural areas, where industrial service providers were scarce, such as Touchstone Energy and Washington Electric Co-op in central Vermont. Cooperatives are even in the funeral and memorial society sector, saving members money in contractual relationships with funeral providers.
It is amazing to realize that cooperative business accounts for $650 billion in revenue and 200 million American jobs, according to research conducted over the past seven years by the University of Wisconsin Center for Cooperatives. They identified 29,000 co-ops spread across diverse industries in the U.S., from bio-fuels, to farmer supplies, marketing, and insurance. Over 20 cooperative enterprises have sales greater than 1 billion dollars a year. In the United States, about half of all Americans are served by cooperatives, whether through a particular favorite coffee grown by a cooperative in Peru, or a newspaper article written by the Associated Press, a news purchasing co-op, or through a credit union transaction, also a cooperative enterprise. And globally, cooperatives have provided a way for farmers, weavers, handcrafters, and many other enterprising individuals to get products to markets and much more. The National Cooperative Business Association and its international arm, the Cooperative League, tell so many stories of cooperatives meeting the needs of their members, such as the East Timor Coffee Cooperative that teamed up with health professionals and the national Ministry of Health to open health clinics (eleven of them!) to assist with tuberculosis and malaria prevention.

Basically, cooperatives are owned and democratically controlled by their members—the people who use the co-op’s services or buy its goods—not by investors. Cooperatives return surplus revenues to members proportionate to their use of the cooperative, not proportionate to their ownership share. And finally, because of this investment structure, cooperatives are motivated by service to their members, not by profit. In a decade of story after story of financial greed, the cooperative difference stands tall.

Our own Brattleboro Food Co-op has always been active in enhancing our awareness of food issues, beginning with organic and sustainable production, fair trade, local food production, and recently, genetically engineered food labeling. Furthermore, we have taken the message of healthy and nutritious foods into the community through regular activities in schools, day-care centers, teen centers, and senior centers, introducing and reinforcing the importance and relevance of local food producers. All of these activities are made possible by the investment of our shareholders, the profitability of our operations, and our commitment to the larger community.  We partner with all of our neighbor co-ops in the Neighboring Food Co-op Association to measure our economic and social impact, work on education and outreach projects, and develop additional sourcing. We hook up with other organizations, such as the Northeast Farmers Union to affect food policy. We work with our fellow co-operators nationally to improve our operations, access more products at good prices, and generally provide better services to our shareholders. We co-operate among cooperatives.
Next year, we in Brattleboro will be celebrating forty years of our own community-owned and community-supported store.

Children have grown up in the Co-op, and had children of their own. We continue to provide relevant and active community interaction, as we grow and learn new ways to apply cooperation. Through tough times and good times, cooperatives remind us that we can only be stronger together.

1st Principle: Voluntary and Open Membership
Cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political, or religious discrimination.
2nd Principle: Democratic Member Control
Cooperatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary cooperatives members have equal voting rights (one member, one vote) and cooperatives at other levels are also organized in a democratic manner.
3rd Principle: Member Economic Participation
Members contribute equitably to, and democratically control, the capital of their co-operative. At least part of that capital is usually the common property of the co-operative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing their co-operative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the co-operative; and supporting other activities approved by the membership.
4th Principle: Autonomy and Independence
Cooperatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their co-operative autonomy.
5th Principle: Education, Training, & Information
Cooperatives provide education and training for their members, elected representatives, managers, and employees so they can contribute
effectively to the development of their cooperatives. They inform the general public– particularly young people and opinion leaders– about the nature and benefits of co-operation.
6th Principle: Co-operation among Cooperatives
Cooperatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional, and international structures.
7th Principle: Concern for Community
Cooperatives work for the sustainable development of their communities through policies approved by their members.