2018 budget proposal zeroes out programs essential to domestic, international cooperative development

Despite proposed cuts, NCBA CLUSA is confident that lawmakers will ultimately recognize the value of cooperative development.

Despite proposed cuts, NCBA CLUSA is confident that lawmakers will ultimately recognize the value of cooperative development. Despite proposed cuts, NCBA CLUSA is confident that lawmakers will ultimately recognize the value of cooperative development. Despite proposed cuts, NCBA CLUSA is confident that lawmakers will ultimately recognize the value of cooperative development. The Trump Administration's $4.1 trillion 2018 detailed budget, released Tuesday by the White House and the Office of Management and Budget, proposes deep cuts to or entirely eliminates programs essential to domestic and international cooperative development.

Although it is not expected to survive scrutiny by lawmakers, the proposal puts numbers on the Trump administration’s priorities of defense and homeland security—often at the expense of foreign aid, which the budget slashes by more than a third.

The budget also dissolves Rural Business and Cooperative Service, which creates rural economic opportunity, spurs job growth and administers the Rural Cooperative Development Grant (RCDG) program.

Among the eliminations announced in this morning’s budget proposal are Food for Peace (P.L 480 Title II Food Aid), the Cooperative Development Program (CDP) and the Development Assistance account (Feed the Future/Global Food Security), the bedrock of U.S. investments that promote economic development, support good governance and create more sustainable, self-sufficient communities worldwide.

Each of these programs directly impacts NCBA CLUSA’s international development work. The elimination of Food for Peace would end international food assistance programs worth $1.7 billion at a time when the world faces the potential of four simultaneous famines, according to the World Food Programme.

In Madagascar, NCBA CLUSA works in four Food For Peace priority regions; in Senegal, NCBA CLUSA implements the first-ever Feed the Future project, Yaajeende, which has reduced malnutrition in children under five by 31 percent in project area villages in Senegal. NCBA CLUSA also implements two CDP projects benefiting countries worldwide.

“From their role in spurring job growth in rural America to achieving food security and resilience in communities worldwide, cooperatives play an important part in sustainable community development,” said Judy Ziewacz, President and CEO of NCBA CLUSA. “NCBA CLUSA is committed to preserving these investments and will continue to be a strong advocate for the role of cooperative development in the U.S. and around the world.”

Alan Knapp, NCBA CLUSA’s Vice President of Advocacy, will continue to monitor developments as Congress reviews the budget proposal in the coming weeks.

"While we're disappointed in the priorities outlined in the budget proposal, NCBA CLUSA is confident that Congress will ultimately recognize the value of cooperative development," Knapp said. "Now is the time to throw all of our energy and resources into highlighting, defending and ensuring the continuation of the good work cooperatives and their members do,” he added. 

To that end, NCBA CLUSA has reached out to every member of the Senate Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration and Related Agencies.

Earlier this month, NCBA CLUSA President and CEO Judy Ziewacz submitted testimony to the Senate Appropriations Subcommittee, rejecting calls for the elimination of discretionary programs administered by USDA’s Rural Business and Cooperative Service and requesting at least $26,850,000 in RCDG funding for FY 2018.

Her testimony ends by urging the Trump Administration to “provide the necessary federal investment needed to help create, sustain and inspire vibrant rural communities.”

Co-ops back in U.S. Census after 20-year absence

Including co-ops in the 2017 Economic Census will help pinpoint the scope and impact of cooperative businesses nationwide.

Including co-ops in the 2017 Economic Census will help pinpoint the scope and impact of cooperative businesses nationwide.Including co-ops in the 2017 Economic Census will help pinpoint the scope and impact of cooperative businesses nationwide.Including co-ops in the 2017 Economic Census will help pinpoint the scope and impact of cooperative businesses nationwide.NCBA CLUSA is thrilled to announce that a decades-long absence of federally-reported data on co-ops in the U.S. will end with the 2017 Economic Census. The Office of Management and Budget on Friday approved without change or question the main 2017 Economic Census package, which includes a question identifying cooperative businesses.

“This is a breakthrough moment for cooperatives nationwide,” said Judy Ziewacz, president and CEO of NCBA CLUSA. “The data gathered by the 2017 Economic Survey will fill a critical gap within the cooperative sector, allowing us to tell the story of cooperative economic impact in a more compelling way.”

NCBA CLUSA has worked diligently on behalf of its members, co-ops across the country and cooperative researchers to make sure co-op businesses are identified in the 2017 Economic Census.

In 2007, a group of researchers led by Brent Hueth, director of Agriculture and Applied Economics at the University of Wisconsin Center for Cooperatives, conducted their own research on the economic impact of cooperatives. That study found that there were 29,000 co-ops in the U.S. that account for more than $3 trillion in assets, more than $500 billion in revenue and sustain nearly two million jobs. 

Now a decade later, NCBA CLUSA estimates that there are closer to 40,000 cooperative businesses in the U.S., but census data is needed to confirm that number. Since the UW Center for Cooperatives study, Hueth, the USDA, NCBA CLUSA and other stakeholders have worked to transfer the collection and ownership of that data back to the U.S. Census Bureau. 

In May 2016, the U.S. Department of Commerce committed to “researching the feasibility” of a request made on behalf of NCBA CLUSA by the Congressional Cooperative Business Caucus to reinstate a question recognizing cooperative businesses that was dropped from the census in the 90s.


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Approval of that question on Friday by the OMB is among the final steps toward a more timely and relevant picture of the cooperative economy. While the question approved applies to single-unit cooperative businesses, a question for multi-unit companies will be submitted later in the year as part of a supplementary OMB package, said Andrew Baer, Assistant Division Chief for the Economy-Wide Statistics Division of the U.S. Census Bureau.

“OMB had no questions or concerns about the cooperative portion of the single unit survey, so we are hopeful that it will flow through smoothly for the multi-unit companies as well,” Baer said. Census applies the "single-unit" definition to a local co-op staffed by a handful of people with a small economic footprint; "multi-unit" refers to a co-op with multiple stores and significant sales. This distinction governs how co-ops receive the census, or report form: all multi-unit co-ops receive the report form, while a sampling is taken of the single-unit co-ops. 

Electronic collection of data is expected to begin in early 2018. In an effort to produce cleaner data faster and cheaper, the U.S. Census Bureau will for the first time in 2017 conduct its census electronically. 

“We look forward to following this process and really quantifying the scope and impact of the cooperative economy,” said Alan Knapp, Vice President of Advocacy for NCBA CLUSA. “Having concrete data about cooperatives is crucial to advance the sector.”

Conducted every five years, the Economic Census provides a snapshot of the U.S. economy that informs legislation and guides policy decisions.

The OMB’s approval Friday builds on a string of recent wins for NCBA CLUSA members and supporters in the U.S., including the Congressional Cooperative Business Caucus, the Interagency Working Group on Cooperative Development and the newly-established Council of Cooperative Economists.

Federal Budget preserves funding for co-op development, but uncertainty remains on the horizon

The Rural Cooperative Development Grant (RCDG) Program receives level funding of $26,550,000 in the Federal Omnibus budget passed today.

The Rural Cooperative Development Grant (RCDG) Program receives level funding of $26,550,000 in the Federal Omnibus budget passed today.The Rural Cooperative Development Grant (RCDG) Program receives level funding of $26,550,000 in the Federal Omnibus budget passed today.The Rural Cooperative Development Grant (RCDG) Program receives level funding of $26,550,000 in the Federal Omnibus budget passed today.Compromising across the aisle, the Senate passed the Federal Omnibus budget to extend federal funding on Thursday, securing funding for cooperative development programs domestically and internationally. The bill is on its way to be signed by President Trump.

The Senate passed the $1 trillion omnibus spending bill that would keep the government running until September by a vote of 79-18. The House passed the bill Wednesday in a 309-118 vote, with four members abstaining.

But with new negotiations and potential cuts on the horizon, co-ops are gearing up to defend funding critical to their members and the economy. The relatively modest federal spending on cooperative development ensures funding for programs that support cooperatives and impact the lives of many in the U.S. and abroad, but also sets the stage for continued fights over its long-term viability in future federal budgets.

NCBA CLUSA’s Vice President of Advocacy Alan Knapp emphasized the need to prioritize these funds for the 2018 fiscal year.

“From the development of hundreds of businesses and creation of thousands of jobs for rural towns in America by the Rural Cooperative Development Grant (RCDG) Program to the food security and resilience needs of the developing world from programs administered by USAID and USDA, cooperatives and their principles continue to build a better world,” Knapp said. “We are committed to preserving these investments.”

While this budget continues many successful programs impacting co-ops through this budget year, the proposed 31 percent cut to international development outlined in the federal budget for 2018 slashes many vital development assistance accounts.

“We must ensure development stands alongside diplomacy and defense as part of our nation’s national security strategy and cooperative principles help support many developing international communities,” Knapp said.


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The Federal Budget secures funds through September 2017. Here’s a breakdown of how the budget will affect cooperatives:

The Rural Cooperative Development Grant (RCDG) Program will receive level funding of $26,550,000—of which $5.8 million will be available to the USDA in grants to cooperative development centers nationwide. Administered by the USDA’s Rural Development/Rural Business – Cooperative Services Program, RCDG exists to improve the economic condition of rural America by assisting in the startup, expansion and operational improvement of rural cooperatives. Continued funding of this grant program may be in jeopardy beyond this fiscal year as the proposed budget blueprint offered by President Trump calls for the elimination of discretionary programs administered by USDA’s Rural Business – Cooperative Service due to its assessment they are duplicative and underperforming.


The Cooperative Development Program will receive a $1 million increase over FY2016 funding, totaling $12 million. The cooperative development program is a competitive grant program that responds to the needs of local cooperatives internationally by utilizing the expertise and resources of long-established U.S. cooperative organizations, their members and volunteers. The program focuses on developing, implementing and extending workable solutions to key development challenges and opportunities such as reducing poverty and hunger, raising member equity participation as a major element of self-reliance and reducing dependency that can result from external assistance, among others. Learn about NCBA CLUSA’s Cooperative Development Program projects here. 


Feed the Future The U.S. Government’s flagship global hunger and food security initiative—authorized by the Global Food Security Act of 2016—will receive level funding of $1,000,600,000. By equipping people with the knowledge and tools to feed themselves, Feed the Future addresses the root causes of poverty and hunger, helping people end their reliance on aid and creating important opportunities for a new generation of young people, while building a more stable world. Cooperatives are identified as key stakeholders and their expertise is leveraged as part of a comprehensive strategy to accomplish the program’s objectives in the authorizing statute. NCBA CLUSA implements the Feed the Future Yaajeende project, which reduced malnutrition in children under five by 31 in project area villages in Senegal. 


Food for Peace, Title II will receive a $116,000,000 decrease over FY2016 funding totaling $1,600,000,000 (including a one-time $134,000,000 increase to address the famine crisis around the world). By monitoring regional food insecurity, this program works with field-based partners using various program tools and approaches to save lives, tackle chronic undernutrition and help the most vulnerable break the cycle of poverty and hunger. These programs bring together relief and development efforts so that humanitarian assistance not only saves lives, but also contributes to long-term benefits for local communities. See how humanitarian aid and long-term development strategies, like co-ops, are supporting co-op farmers in Madagascar.


Stay up to date on NCBA CLUSA’s latest advocacy efforts on behalf of the cooperative movement by subscribing to Co-op Weekly.

Council of Cooperative Economists

MEMBERSHIP

Members of the Council of Cooperative Economists include experts from a diverse set of cooperative associations, research institutions, academic institutions and associations exploring the economic impact and potential of cooperatives. Most members have economic expertise; some bring legal, finance, management, labor relations or sociology expertise to the Council.

Terry Barr (Co-Chair)
Senior Director,
Knowledge Exchange Division
CoBank

Bill Hampel (Co-Chair)
Chief Economist,
Chief Policy Officer
Credit Union National Association 

Joseph Blasi
J. Robert Beyster Distinguished
Professor
Rutgers University

Michael L. Cook
Endowed Professor
in Organization Economics
University of Missouri

Luis Dopico
Economist 

Filene Research Institute

Brent Hueth
Associate Professor of
Agr
iculture & Applied Economics  
University of Wisconsin

Camille Kerr
Associate Director 
 
ICA Group

Jessica Gordon Nembhard
Professor of Community Justice
and Social Economic Dev.

John Jay College, CUNY

Sonja Novkovic
Professor of Economics 

St. Mary's University

Steve Rick
Chief Economist

CUNA Mutual Group

Rick J. Schadelbauer
Manager of Economic Research
and Analysis

NTCA

Mike Schenk
Vice President of Research and 
Policy Analyst 
CUNA

Russell Tucker
Chief Economist 

NRECA

Peter Vitaliano
Vice President of Policy and 
Market Research 

NMPF

Panelists explore engagement opportunities at launch of U.S.-Cuba Cooperative Working Group's 2017 Report

Moderated by Alan Knapp (right), Vice President of Advocacy for NCBA CLUSA, last week’s panel included Amy Coughenour Betancourt, Michael Hatley, Andrew Fishbein and Luis Dueñas Casal.

Moderated by Alan Knapp (right), Vice President of Advocacy for NCBA CLUSA, last week’s panel included Amy Coughenour Betancourt, Michael Hatley, Andrew Fishbein and Luis Dueñas Casal. Moderated by Alan Knapp (right), Vice President of Advocacy for NCBA CLUSA, last week’s panel included Amy Coughenour Betancourt, Michael Hatley, Andrew Fishbein and Luis Dueñas Casal. Moderated by Alan Knapp (right), Vice President of Advocacy for NCBA CLUSA, last week’s panel included Amy Coughenour Betancourt, Michael Hatley, Andrew Fishbein and Luis Dueñas Casal. At the March 23 launch of the U.S.-Cuba Cooperative Working Group’s 2017 Report, Cuban and American cooperative experts discussed opportunities to continue building a vibrant, sustainable cooperative ecosystem in Cuba, despite the uncertain nature of the two countries’ bilateral relationship.

With more than six decades of experience supporting cooperative development worldwide—beginning in India in 1953—work is Cuba’s co-op sector is hardly an anomaly for NCBA CLUSA, said Amy Coughenour Betancourt, Chief Operating Officer for NCBA CLUSA’s International Programs and founder of its U.S.-Cuba Cooperative Working Group.

Established in 2014, the group conducted its initial research and education trip to the island in June 2014—well before of the normalization of diplomatic ties that December. The group’s 2015 report outlined a clearer picture of Cuba’s cooperative movement and its increasing role in the country’s push for economic reform.

Last week’s report digs deeper into resource, regulatory and access barriers to cooperative development in Cuba; addresses gaps in co-op structure and governance; and explores opportunities for continued, mutually beneficial engagement between the U.S. and Cuban co-op sectors.


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According to Luis Dueñas Casal, president of SCENIUS—a Cuban non-agriculture cooperative of accountants, financial planners and business consultants—the biggest needs of the country’s co-op sector are raw materials for development and capacity-building opportunities for co-op members, many of whom are new to private-sector entrepreneurship, having been on the government’s payroll until 2011.

With the country seemingly poised for cooperative development, now is the time to make the case to U.S. lawmakers for increased engagement, said Andrew Fishbein, who hosts fact-finding trips to Cuba in his role as Policy and Advocacy Director for the Center for Democracy in the Americas.

“In order to create the conditions for financial partnerships and investments to really take place that can support the level of cooperative development we hope to achieve, we need durable, legislative change in this country,” he said.

Support for lifting the trade embargo is already growing in Congress on a bipartisan basis—especially among lawmakers from ag-heavy states—positioning the 115th Congress to move forward on specific legislation, Fishbein said. In fact, every member of a delegation of Republican lawmakers Fishbein recently took to Cuba is now a co-sponsor of a bill to lift the embargo.

As enthusiasm for U.S.-Cuban engagement grows, panelist Michael Hatley said coming to the island with an open mind is critical. Hatley is an Associate for Reneo Consulting, LLC, the consulting and law firm that brokered the first legal Cuban export to the U.S. in over 50 years. It wasn’t cigars or even rum, but artisanal charcoal produced by a worker co-op that marked the milestone. Harvested from the invasive marabu weed overrunning farmland in Cuba and threatening livelihoods, the charcoal is long- and clean-burning, much like mesquite.

Critical to inking the deal was building trust and relationships with stakeholders in Cuba. So was approaching the agreement with respectful attitude open to an exchange—rather than imparting—of knowledge, Hatley said.

“This is something we can build on. It was a small but significant and symbolic first step that we hope to expand into a lot of other trade and investment deals,” he added.

While the panelists agreed that normalizing relations with Cuba is in the best interests of both countries, it’s also an exciting opportunity to venture into new areas of development, said Martin Lowery, Executive Vice President of Member and Association Relations for America’s electric cooperatives.

Lowery is currently developing a conference for U.S. and Cuban engineers in late 2017 designed to increase renewable energy integration, storage technology and resiliency in both the U.S. and Cuba. Ultimately, he’d like to see Cuban homes and businesses powered by renewable energy from electric co-op distribution hubs that have power purchasing agreements with the government.

When Venezuela—Cuba’s longtime top energy supplier—slashed oil exports to Cuba last year, energy became a top priority for the island nation, one that could generate significant opportunities for its burgeoning co-op sector.

“If we can align our cooperative expertise in the U.S. with the high priorities for investment and development in Cuba in terms of what the government and private-sector actors want to do, then that is a perfect storm for great collaboration,” Coughenour Betancourt said.

Read the full 2017 Report here.

 

TWITTER FEED

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