Self-reliance and sustainability in the 21st century.
At first glance George Siemon and Doc Hatfield don’t appear to have a whole lot in common. Siemon has the look of a Berkeley anthropologist. He wears wire-rimmed glasses and grows his hair long. Hatfield is an Oregon rancher straight from central casting: tall, lean and dressed for the part, complete with hat. A white Stetson.
But George and Doc and a bunch of conspirators are revolutionizing North American agriculture in the most traditional way possible. They are putting consumers back in touch with the people who grow their food.
Siemon runs the Organic Valley Family of Farms, a network of about 1,700 farmers in 29 states who own the food company as a cooperative. He was one of the cooperative’s original seven farmer-members. He likes to call himself the C-E-I-E-I-O.
Doc and Connie Hatfield spearhead Country Natural Beef, a network of over 100 far-flung beef ranchers organized according to the same principles: When ranchers and their customers get together they pretty much agree on how our food should be produced, with health and humanity the top priorities. Farmers and ranchers are eager to protect their property and their way of life. Educated consumers have proved they are happy to pay for the improvements.
Food producers and food consumers want a food industry that respects human health, nature and animal welfare. People may disagree on the relative value of these virtues but everyone acknowledges that they have some intrinsic worth. When you bring the producers and the consumers together they support agriculture that is more environmentally responsible and more compassionate. That business model is more sustainable, economically, than the conventional industry in which food processors, distributors and other middlemen take most of the profit.
As George Siemon told me, in the process of running Organic Valley, “there’s quite a bit of doing what you think is right. Farmers apply common sense and fairness to business – no side deals. What’s fair is fair.”
Perhaps the quality that most characterizes the new generation of agricultural cooperatives – organizations like Organic Valley and Country Natural Beef – is their transparency. No side deals. What’s fair is fair.
Organic Valley started as a group of Wisconsin dairy farmers backed by a network of small distributors. Over time they expanded into eggs, meat, orange juice and soy products. The 1,700 farm families in the Organic Valley cooperative in 2010 accounted for about 10 percent of all the organic farmers in the country.
The company’s leadership is obsessive about its standards for food and its standards for fairness. George Siemon invented his own version of the “food pyramid” in which the best food is grown with your own hands on your own property. Second best comes from local farmers you know personally. Then, third in line, is Organic Valley’s own product, organic foods from conscientious national or regional organizations.
Organic Valley is equally strict about the distribution of its profits. Forty-five percent goes to the cooperative’s member farmers. Forty-five percent goes to employees. And the remaining 10 percent is donated to community causes the cooperative members support.
In contrast, the average U.S. corporation donates about 1.2 percent of its profits.
The secret to Organic Valley’s success has been recognizing the true values and real priorities of food consumers and matching those up with the values and priorities of family farmers. Both groups, it turns out, want clean air and water. Both want to keep our farmland beautiful and abundant. Both recognize that food produced in a fair and conscientious way is worth more money.
Organic Valley’s founders were inspired by the Mondragon Cooperatives of northern Spain organized in the 1950s to improve the Basque economy. Now there are almost 300 Mondragon Cooperatives with 93,000 employee owners generating 17 billion Euros a year in revenue. They are twice as profitable as the average Spanish business, pay salaries more than 10 percent higher than the Spanish average and their productivity, per employee, is at the very top of Spanish corporations.
In the past five years Organic Valley’s total sales have increased 250 percent to more than $600 million. About 400 people work at its headquarters in tiny La Farge, Wisconsin (population 78891) and the cooperative is adding about 50 new employees each year. The job growth helped the village of La Farge earn about $1 million in federal aid in 2010 to provide streets and utilities for the cooperative’s expansion.
In several ways Country Natural Beef looks like a younger cousin to the Organic Valley Cooperative (which might look like a younger cousin to the Mondragon Cooperatives, in a certain light). Doc and Connie Hatfield, the founders of the rancher cooperative, were out to solve two problems when they started the organization in 1986. The first, most pressing problem was economic. Raising beef on the open range in the arid North American West wasn’t paying off. They would lose their ranch, and their lifestyle, if something didn’t change.
Their second problem was, well, philosophical. In the market where they did business, beef was a commodity. Success was achieved by delivering cattle at the lowest possible price per pound. The Hatfields say that system was ruining their land and victimizing their animals. “We just didn’t feel like we could do it that way any more,” Connie says.
So, mostly out of economic necessity and a passionate desire to preserve their land and their lifestyle for the next generation of Hatfields, they reinvented their business.
Joining forces with 13 other ranching families, the Hatfields formed Country Natural Beef and reached out to consumers. Through natural-food stores and local food cooperatives they offered consumers meat that was humanely raised and healthier. They certified their humane agricultural practices and environmental stewardship through the Food Alliance, a nonprofit that screens farmers, processors and distributors for environmental responsibility, social responsibility, safe and fair working conditions and humane treatment of animals. Country Natural Beef has even created its own “Raise Well” set of standards for animal welfare and set up a standardized method of raising beef cattle, specifying the animals’ diets and lifestyles.
When they were starting out, Connie Hatfield personally visited health-food stores in her region to pitch their new product. They learned, firsthand, what conscientious consumers were looking for and they set out to provide it. They developed new methods and found new allies who could feed, transport and slaughter their animals in more conscientious ways.
The Mondragon Cooperatives, Organic Valley and Country Natural Beef were not invented by social scientists. All three were created in the crucible of free enterprise. First and foremost they had to make money. But all three were developed in the secure knowledge that consumers care where products come from. And all three discovered that cooperative ventures are often more productive because their personnel are stakeholders, and conscientious companies are more productive than average because their personnel reflect that spirit of productive conscientiousness.
All three have prospered by doing good – and doing it well.
And they are the tip of the iceberg.
The Local Harvest website lists more than 20,000 local farms reaching out directly to their consumers and adds about 20 new farms every day. They also list more than 600 places consumers can sign up for food “subscriptions” from local farms, or CSAs (Community-Supported Agricultural operations) and almost 5,000 farmer’s markets across the country.
Local Harvest’s founder, Guillermo Payet, gives all the credit to the consumer. “People love knowing exactly where their food comes from,” he says.
It’s Beautiful. Organic Valley and Country Natural Beef both advertise their products with photos of their producers and their farms and ranches. When Doc Hatfield speaks at an event he sometimes recites a poem he wrote with his daughter, Becky. The poem appears on their organization’s homepage under the headline, “Our Product is More Than Beef: …
…It’s a trout in a beaver built pond, haystacks on an Aspen-framed meadow.
It’s the hardy quail running to join the cattle for a meal, The welcome ring of a dinner bell at dusk.”
The perpetuation of beauty is part of the product.
It Creates Abundance. The purest distillation of our concept of abundance is reflected in this planet’s miraculous capacity for supporting life. Responsible agriculture institutionalizes nature’s abundance, promotes it and preserves it.
It’s Fair. That’s one of the principal value propositions in roots agriculture. The cooperative and the local CSA tell the stories of specifically where the food comes from and how it is created so the customer can be confident that the process is economically fair, and as fair as possible to the creatures involved.
It’s Contagious. Organic Valley is demonstrating how to spread a farmer-owned food corporation across the landscape. It continues to grow significantly even through economic downturns. Mondragon Corporation exemplifies how contagious the philosophies of the cooperative can be across other industries, with 256 companies in finance, heavy industry, research, training and retailing. The Mondragon example inspires Organic Valley. And Organic Valley’s example leads Country Natural Beef as well as tens of thousands of groundbreaking agricultural enterprises across the world. Contagiousness is inherent to the idea of roots agriculture. Its benign effects on society and nature are its primary marketing concepts.