Beyond the Elevator: Cooperatives impact South Dakotans’ lives
March 30, 2015
As South Dakota Farmers Union celebrates its 100th year, we are taking a look back at our organization's roots and highlighting some of the milestones which make us who we are today. This second article is one of three which focus on SDFU's role in cooperative development and success in South Dakota. To read the first article, which ran in last month's newsletter, visit sdfu.org.
For some, the term "cooperative" may evoke images of towering grain elevators. However, for most South Dakotans, cooperatives serve as a lifeline to technology, capital, products and services which extend beyond the local grain elevator and have allowed rural communities, farmers, ranchers and businesses to grow and thrive.
"For a century now, co-ops have played an important role in our state's progress," explains Doug Sombke, President of South Dakota Farmers Union.
When Sombke, a fourth-generation Conde crop and cattle producer begins to name off the cooperatives he and his family belong to, the extensive list includes a telecommunications co-op; an electric co-op; a fuel and energy co-op; two agriculture grain and agronomy co-ops; a banking cooperative and a rural water cooperative.
"Those of us living in rural South Dakota benefit from the cooperatives our forefathers founded when private companies decided it would not pay to invest in the infrastructure necessary to bring electricity, telephone service, fuel and agriculture inputs to the countryside," Sombke says.
The development of electric cooperatives illustrates Sombke's point.
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In the 1930s, 85 percent of all American households were without electricity due to lack of investment by private electric companies in rural America. To bolster investment in electric infrastructure, Pres. Franklin Delano Roosevelt signed an Executive Order creating the Rural Electrification Administration which offered government loans to rural electric cooperatives.
In 1937 the first South Dakota rural electric cooperative was formed in Burbank. "Even today, most rural South Dakotans receive their electricity from a rural electric cooperative because other than large load facilities, like ethanol plants, private investors are not interested in coming to rural areas," explains Scott Parsley, Assistant General Manager at East River Electric Power Cooperative and Dist. 8 South Dakota Legislator.
Because cooperatives operate under a non-profit business model, Parsley says they not only return profits locally, but when private providers do enter the picture, cooperatives keep prices in check. "We serve as a yard stick for pricing. Because we are member owned and the rates are set by the board of directors, those paying the rates are setting the rates," Parsley explains. "As cooperatives, we aren't satisfying some investor who may live in another state or country; it is our job to work for the people who own us."
Member ownership carries many benefits, one of which being exceptional service, says Bill Troske, a semi retired cow/calf and crop farmer from Turton who has served on the board of directors for James Valley Telecommunications for several years. "Service is the name of the game. Because we are locally-owned, we excel at service. When members call in, they don't get a recorded voice; they get a real person."
Exceptional service led the 60-year-old cooperative to move into providing cell phone service. "Our members wanted it and the larger companies were not providing service to this part of South Dakota," Troske says.
Responding to customers' needs leads the cooperative, which has already expanded to provide high speed internet and broadband services to the rural communities it serves. "If rural communities are going to thrive, residents need access to the latest communications technology," Troske said.
James Valley Telecommunications recently expanded their coverage area to include non-member territory. Today they provide broadband and cell phone services to residents and companies in Aberdeen and Redfield. This move has strengthened their bottom line in a day and age when many rural communities are losing residents to South Dakota's urban centers.
"The declining population of rural areas is a large challenge for South Dakota cooperatives," says Jeff Nelson, retired General Manager of East River Electric Power Cooperative.
In response to fewer farms and people, Nelson explains that many cooperatives have adapted their business practices and consolidated. "By joining together, cooperatives are better able to overcome the costs of serving rural areas."
Educating today's cooperative membership is yet another challenge Nelson says cooperatives face. "Many cooperative members are so far removed from the days before electricity and telephone services, that they tend to take cooperatives for granted. This is where rural advocacy organizations, like Farmers Union, play a valuable role as they look at ways to sustain and bring in the next generation of cooperative members."
Supporting cooperative development has been a focus of South Dakota Farmers Union, which was established in the state a century ago for the very purpose of founding cooperatives. (Read more about S.D. Farmers Union's role in establishment of cooperatives in South Dakota at http://www.sdfu.org.) Cooperative education is key to Farmers Union education programming, which reaches more than 3,000 youth each year through school visits, day camps and leadership camp programs.
"Even though I served on our co-op board for more than 20 years and attended numerous annual meetings of all the cooperatives we are members of, I could have done a better job of emphasizing the importance of being actively involved in our co-ops to my sons," Sombke, 54, said. "We recognize this as a trend, so during Farmers Union Leadership camp, teens actually establish and run cooperatives. This hands-on participation helps develop future generations of active cooperative membership."
To see more vintage cooperative images and read the first article in this series, visit http://www.sdfu.org and click on the Century Strong icon.