Should a feasibility study be our first step in developing a cooperative?

While a feasibility study is an extremely important part of developing a farmer cooperative venture, there are normally many steps in the consideration, evaluation and development of a cooperative that come before the feasibility study.

Starting a value-added cooperative venture is a complex undertaking. Oftentimes, cooperative farmer ventures start when a small group of farmers discuss a common need and then find themselves developing an idea of how to fulfill it. Depending on the situation, a new cooperative farmer venture may be met with excitement and enthusiasm or with significant competition and opposition. Similarly, new cooperative ventures may experience quick and easy or long and difficult capital drives. Developing a successful cooperative venture requires both objectivity and enthusiasm by many committed people. Although time-consuming, the steps of forming a cooperative farmer venture occur along a logical path. However, each group "s journey along the path can be very different and can take various amounts of time.

Leaders involved with the development of new cooperative ventures must demonstrate a combination of expertise, enthusiasm, practicality, dedication and determination to see that the project is well planned, developed and completed. The responsibility for early development of a cooperative farmer venture rests mostly with an emerging leadership group. Leaders begin by discussing their idea at one or more small group meetings with other prospective members. If the group supports the idea, the next step is to seek the advice of someone familiar with cooperatives and the cooperative-development process

Below is a list of ten steps that the leaders of a developing cooperative venture should expect to encounter. The degree to which each of these steps will be experienced will vary greatly from one group to another. Some of the steps described here will be combined for some groups. The list begins with the very informal phase of new venture development where common needs naturally begin to be discussed in the community.

• Discussions of common needs that could be addressed through cooperative ventures begin to surface in the community.
  
• An informal, small-group meeting should be planned where a few of the leading potential member-users convene to discuss issues and identify the economic need a cooperative venture might fill. This meeting could include a logical combination of formal/planned presentations and open/unscripted dialogue.
  
• An exploratory meeting is held with a larger group of potential member-users. This meeting could include a combination of formal/planned presentations and open/unscripted dialogue. This meeting should result in a clear indication of whether the idea should be pursued further.
  
• If the consensus of the exploratory meeting is that the idea is worthy of continuation then a steering committee should be selected.
  
• The steering committee should then begin to assemble specific evidence of support for the venture. This is often accomplished through a survey of prospective members to determine the potential use in the cooperative venture.
  
• The results of the steering committee =s study/survey should then be discussed at a second general meeting with all potential members. At the conclusion of this second general meeting, the steering committee should evaluate the status of continuing the venture.
  
• If the consensus is to continue with the venture, the steering committee should develop a project summary which will proclaim the mission and competitive advantage of the venture, estimate the potential number of members and the volume of business expected. The project summary should also include an analysis of costs and potential returns.
  
• After the project summary is developed, a third general meeting should be planned to discuss the summary. At the conclusion of this third meeting, the steering committee should evaluate the status of continuing the venture.
  
• If the consensus is to continue with the venture, the steering committee should embark on the development of a feasibility analysis.
  
• After the feasibility analysis is completed, the steering committee should call a fourth general meeting to discuss the findings/results.

As you can see, the development of farmer cooperative ventures involves many steps, meetings discussions and hurdles before a feasibility study is conducted.

Additional information on the steps to organizing a farmer cooperative venture is available in UT Extension publication PB 1759 A First Things First: Initial Steps for Developing Value-Added, Cooperative Farmer Ventures. This publication is available at: http://www.utextension.utk.edu/publications/pbfiles/PB1759.pdf