Sanders, Bernard L.

English

Research Papers in Economics

78 JOURNAL OF AGRICULTURAL COOPERATION
The Mission ofthe Agricultural
Cooperative Service:
A Discussion
Bernard L. Sanders
1993
Torgerson's paper is divided into three sections: "Commitments,""Cri-
ses," and "Possible Futures." The first section directly addresses the mis-
sion of the Agricultural Cooperative Service (ACS). The second section
identifies the decline in real financial support for accomplishing the mis-
sion.Thethirdsectionidentifiesfive operationalconsiderationsfortheACS
program (Le., how to use its limited resources to accomplish its mission).
A theme that appears in each section is consideration of expanding the
authority (mission) ofACS, along with enhancing its funding. to provide
assistance to nonagricultural cooperatives.
The first section of the report reviews the legislative mandate and the
historical precedence for the purpose of ACS. Conducting research on
cooperative theoryand organization, providing technical adVisory services
to organizing and organized cooperative organizations, gathering and
reporting statistical data. and creating educational programs are clearly
within the missionofACS as these activities apply to agricultural produc-
ers. The application of such services to parties other than agricultural
producers within the mission of ACS is identified as being less certain.
Torgerson does, however, develop arguments for the need to provide such
services, as a public good, for entities other than agricultural producers.
Hisprimaryfocus is onassistingcommunities for purposes ofrural devel-
opment.
Rural development can easily be tied to support for the needs of the
agricultural producer. Economic activity inan agriculturalcommunity in
most cases: (1) supports agricultural production and marketing. (2) pro-
vides supplemental employment for agricultural producers and/or family
members. or(3) isa transitionalfixfor thedisplacementoflaborinagricul-
tural production. Including rural nonfarm groups in the mission ofACS,
therefore, appears tobeeasilydefenSible. Expandingthemissiontometro-
politan community activities or to international ones. as Torgerson sug-
gests. may be more questionable.
The paperalso attempts tojustify the services ofACS as "public goods."
The arguments presented are based on the benefits to the public derived
from cooperation. This is not suffiCient. however, tojustifythe services as
"public goods." Arguments should have been presented in support ofthe
Bernard L. Sanders is vice president and corporate secretary, Farmland Indus-
tries, Inc.Mission ofACS: Discussion/Sanders 79
differences inimpactbetweenprovidingtheservicesbymeansofthepublic
sector versus through the private sector. This approach also would have
helpedtoexplaintheresource"crisis"thatTorgersonreferstointhesecond
section ofthe paper.
In the arguments given in the paper for "public sector encouragement
of cooperation," Torgerson states that decentralization is a precept for
cooperativeorganization. He furthertranslates"decentralization"to"local"
control and "local" ownership. The implication would be that numerous,
small, independentcooperatives are more beneficial than largerbut fewer
cooperatives.Are thebenefitsofeconomiesofscaleandmarketpowerbeing
overlooked?WhyhasTorgersonshiftedfromanemphasison"user"control
andownership to"local" controlandownership?Ialsowasforced topause
for a moment when reading that a "public good" justification for ACS
activityis "byexercisingself-help initiatives, cooperative membersareless
dependent upon governmental programs."
The secondsection ofthe paper reviews the decline overthepastdecade
in the resources devoted to research, education, and technical assistance
about and for cooperatives. The dramatic changes that have affected agri-
culture, cooperatives, andorganizationssuchas theAgriculturalCoopera-
tive Service are well known and well documented. The negative economic
forces first hit agriculture and then spilled over onto cooperatives with
equal but lagged impact. The forces exerting downward pressure on the
public organizations-such as the land-grant colleges and ACS-were
mostly associated with the general economy and its inability to continue
to fund growth in public programs.
Both agriculture and cooperatives have experienced a turnaround and
feel a strongsenseofcontinued future improvement. This does not mean,
however, thateconomicdislocationsnolongerexist. Noticeable restructur-
ing, especially in the cooperative community, is likely to continue. The
opportunityfor the private sector to increase funding for research, educa-
tion, and other programs for cooperatives appears to be promising.
In light of the deficit problems, increased funding for public programs
does not appear to have the same future as that ofprivate sectorfinanced
programs. The Torgerson paper does not address the options ofACS tap-
pingtheprivatesectorfor fundingoralternativelypromotingprivatesector
programs as a substitute for publicly funded programs. The emphasis in
thepaperonthe"publicgoods"aspectofACS programsmaybea hindrance
to further pursuit ofsuch alternatives by ACS.
Given the arguments in favor ofthe mission ofACS in the first section
of the paper and identification of limitations on resources to fulfill the
mission in the second section, it would be logical that the last section
would address the issue ofpriorities (i.e., how to bestachieve the mission
with limited resources). The final section, however, begins with the state-
mentthatfive options wouldbe presentedfor extendingtheACS program.
The paper omits the arguments for and methods of achieving increased
public funding.
Thefirst option, "expandedauthorization,"andthelastoption, "interna-
tional program involvement," both recommend expanding clientele that
would be served by ACS. In the first option, the ACS services currently80 JOURNAL OF AGRICULTURAL COOPERATION 1993
offeredwouldbeextendedto ruralnonfarm clientsand in theotheroption
to foreign clients. In the case of the rural nonfarm clientele. Torgerson
emphasizesthatlegislationorformaldirectiveswouldberequired. suggest-
ing increased public funding. and states that the traditional clientele
groupsmustsupporttheaction. Inthecaseofextensiontoforeignclientele,
no mention is madeofthe needfor authority. the need for increasedfund-
ing. nor the need for support from the traditional clientele. Perhaps a
clarification of the nature of how international programs involvement is
to be undertaken would be helpful.
Theotheroptions: (1) expandedprogramsofcooperative research agree-
ments. (2) linkages with cooperative and/or agribusiness centers. and (3)
expandeduseofexchangeprogramsareall optionsforworkingwithothers
to deliver the services of both ACS and the other participant. Given the
scarcity of resources available to all organizations involved in providing
research. education.andtechnicaladvisoryservicestocooperatives. collab-
orationamong these organizationswould undoubtedlybe productive. The
poolingofresourcesandthe focus onmutuallyagreeableobjectives should
be productive in achieving the mission ofACS as well as that ofthe other
organizations involved.
In summary. there is probably little disagreement with the traditional
mission ofACS. The degree ofpublic funding to support the achievement
ofthat mission is a matter ofconsiderable public debate outside the U.S.
agricultural cooperative community. Although those ofus who are a part
ofthat communitycan easilysee the priorityoftheACS mission. itis less
apparent to others. A focus on how to establish priorities for use of the
resources available to ACS would have beenvery helpful. Perhaps thatcan
be the subject for the next paper.

The Mission of the Agricultural Cooperative Service: A Discussion

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