Want to form a co-op in West Virginia? You don’t have to be a food producer anymore.
Written by Shay Maunz
Photographed by Elizabeth Roth
When we talk about cooperatives in this story, we’re talking about a business’s legal structure. When you’re forming a business you might make it a partnership, or a sole proprietorship, or a corporation, or you might make it a co-op. To understand what a cooperative is, it might be helpful to understand business law and tax code, but that’s not really necessary. If you know the definition of the word “cooperate” you’re most of the way there. “A cooperative exists for its members and is controlled by its members,” says Elizabeth Spellman, the executive director of the West Virginia Food & Farm Coalition. “Members have a share in it and a stake and a say.”
When you think of a co-op you probably think of food—of that little neighborhood market with the really fresh produce and great granola, or of farmers pooling their resources to buy a big expensive piece of equipment they will all use. And until recently that was pretty accurate, at least in West Virginia, because state law only allowed for cooperatives formed between food growers. So a bunch of farmers could get together to form a co-op, but other types of businesses couldn’t form cooperatives at all.
A lot of businesses around the state you probably think of as a co-ops—Mountain People’s Co-op in Morgantown, the Wild Ramp in Huntington, the Alderson Community Food Hub—actually aren’t. They want to be able to include people who aren’t food producers, so they’re legally organized as nonprofits or corporations, but they like cooperatives and what they stand for so they use a co-op’s guiding principles. They’re democratically controlled by their members, have voluntary and open membership, and are generally concerned with bettering their communities.
“An enterprise like ours that is meeting a local need that really isn’t met through the local market economy needs to be broadbased and community-based because otherwise it won’t be very successful or won’t meet community needs,” says Kevin Johnson, president of the Alderson Community Food Hub. “It needs to function like a co-op, in a way.” Basically, these organizations have been operating as cooperatives for years without being able to reap the tax benefits given to actual, legal co-ops.
To solve this problem, the Food & Farm Coalition began a campaign to pass a law during the 2015 legislative session to expand the types of businesses that could form co-ops. Support rolled in from a surprisingly diverse group of people. The left-leaning West Virginia Citizen Action group was interested in co-ops as a solution to the state’s recycling challenges. The conservative state Chamber of Commerce was also interested. The bill passed, greatly expanding co-ops to include a grab bag of industries. Now, all businesses that relate to foods and beverages, arts and crafts, woodworking, recycling, composting, and repurposing of materials can form co-ops. “We wanted to include all the producers,” Spellman says, “whether what they produce is food- or art- or craft- or farm-related.”
The next step is to get legislators to consider an even broader bill, one that would expand the law to let businesses in industries like healthcare form co-ops—so look for even more co-op legislation in 2016. Co-op evangelists think cooperative principles could be a boon to all kinds of businesses. “It’s a community empowerment tool. It puts the power in the community’s hands, and the money stays in the community … as opposed to the traditional LLC that seeks to maximize profit or the nonprofit that is fettered to its mission to be charitable,” Spellman says. “The co-op is sort of the best of both worlds.”