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Prairie Grains is the official publication of
the Minnesota
Association of
Wheat Growers,
North Dakota Grain Growers Association,
South Dakota Wheat, Inc., and the Minnesota Barley Growers Association.

So said Mike Warner, who participated in a panel discussion on "Value-Added Approaches to Increasing Farm Incomes" at the U.S. Department of Agriculture’s 1999 Ag Outlook Forum, held in Washington, D.C. earlier this year.

"These are the two things that really make the venture go or not go. As simple as they sound, these questions contain a multitude of issues that must be resolved if you are to be successful," said Warner, board chairman of United Spring Wheat Processors and a board director of Dakota Growers Pasta Company. "If you don’t answer these questions to the satisfaction of yourself and other potential members; you aren’t going anywhere. By answering these two questions properly, you take ownership of the most precious commodity you will need for success, and that is credibility."

Francis "Butch" Buschette also participated in the panel. Buschette is a director on the board of the Minnesota Wheat Research and Promotion Council, and is currently involved in five businesses that add value to farm commodities: Southern Minnesota Sugarbeet Cooperative that produces sugar, Minnesota Corn Processors that produces ethanol and corn sweeteners, Golden Oval that produces liquid eggs, ValAdCo that produces pork, and MinAqua Fisheries, which produces tilapia fish.

Buschette said his community of Renville, MN is "the cooperative capital of the U.S." Renville has 1,300 people and nine cooperatives, which have created about 170 new jobs since 1992. There is risk in such ventures, but he pointed out that there is just as great of risk doing nothing.

The federal government can help new-generation farm cooperatives by providing low interest loans, Buschette said. "When new projects get their necessary loans in place, they usually have a very high rate of interest. This causes the new venture to begin with a huge debt before any products are marketed," he said. "When rural electric came to the country, cooperatives received loans at a discounted rate, and this helped jump-start these cooperatives. If new generation cooperatives could start at 2% or 3% interest rather than 9% or 10%, this would certainly help. The loans could even have a sunset after five or seven years."