Agricultural Cooperation and Horticultural Produce Marketing in Southwest Virginia

Agricultural production in Southwest Virginia is characterized by numerous small, geographically disperse farms dedicated to traditional practices of producing tobacco and cattle. Community leaders have expressed the desire to diversify the region's agricultural production base to include potentially more profitable commodities such as horticultural crops. In order for the small growers to penetrate the fresh horticultural market and compete with the larger production regions, they must organize themselves into a farmer cooperative that allows them to pool resources, reduce costs, and share risk.

A successful cooperative will increase farm incomes for the region's producers. The co-op will strive to obtain a higher price for the commodities produced than that price which can be obtained by growers acting independently. The increase in farm incomes should offset forecasted decreases in agricultural incomes resulting from declines in the region's traditional production activities. Increased farm incomes for a large number of small growers should have a substantial impact on agricultural producers, marketers, and equipment suppliers and lead to economic development for the region as a whole.

Several past horticultural cooperative efforts have been publicly financed and eventually failed for a wide variety of reasons. The methodology used in this research include surveying and interviewing marketing specialists, co-op managers, growers, extension agents, horticulturists, and other experts involved with both successful and failed cooperative efforts. The data gathered from these interviews has been used to identify key factors that have contributed to the success or failure of the other cooperative efforts.

Based on the key factors identified from the research, a specific cooperative structure has been developed for the Southwest Virginia growers. This organizational structure incorporates into its legal documentation (bylaws, business plan, and marketing agreement) the critical factors that must be carried out by members, management, extension, and marketers in order to increase the probability for the cooperative's long-term survival and profitability.