Indian Springs Farmers Association

There are 42 members of the Indian Springs Farmers Association A.A.L. today (though one-quarter is retired). The benefits of membership include lower priced supplies bought in bulk, accessible and affordable packing facilities, and joint marketing arrangements that would have been individually impossible.

The business model aims to break even. Even though the cooperative’s books are incomplete, the available evidence suggests that Indian Springs has very little debt, modest assets, and consistently positive cash flow. “Sometimes,” says Ben, “the co-op will buy things—packing bags, some supplies. We keep a steady supply of that. If the co-op pays ninety-two cents for a box, we sell it for a dollar. But we aren’t making any profit. The co-op isn’t in the business of making profits. We do well on commissions and on resale. For watermelons, we get about fifty cents of pure money after we pay everybody. And we have thousands of watermelons.”

The focus of the cooperative is fresh vegetables, since there is a higher margin from them than from commodity crops. As Ben reflects on his own choices as a farmer, “With row crops, you had to get bigger and bigger every year to keep up. Once I got up around six or seven hundred acres, I realized I could do the same work on a hundred acres of vegetables. So now I grow traditional local vegetables.”

The rationale for this model is simple; economists assume that the invisible hand of the free market sets prices fairly. But when one large player dominates a relatively small geographic market, it can set monopoly prices in way that unfairly benefits itself and exploits others. Lacking education and wealth, small farmers have often been particularly vulnerable in regions with a limited number of distributors. One solution small farmers have resorted to is to pool their resources—their capital, products, and intellect—which gives them a better shot at flexing their collective muscle and getting a better price from middlemen.

An Association packaging manager and marketing specialist explained the rationale for the cooperative this way to researchers at the USDA: “When one co-op member can bring his twenty boxes of bell peppers and another co-op member can bring his twenty bushels of peas over, whatever the case may be, we can market as a group. Then we command a better price on the market and can fill a large order at one time. We can say to customers, ‘Yes, we have it, we can deliver and this is the price we expect to receive in return.’ And then that comes back to the farmer and he gets his check—whether it’s from a sale to a commercial outlet or to a farmers market. That kind of service commands a higher price.”

Another important benefit to members is access to the cooperative’s packing shed in Petal, Mississippi. It’s fully equipped, capable of storing members’ produce in a large cooler, and then washing, sorting, and packaging it. The co- op also owns a truck, though it sometimes employs outside shippers. While one person manages the cooperative full time, anywhere from three to eight “call-in” staff work in this facility. Each member pays a modest fee for each use, but it is much lower than what alternative facilities would charge.

Most importantly, the co-op provides a comprehensive marketing platform for its members with branding, mailings, and advertising—though it provides these benefits without a marketing staff or budget. With the assistance of local universities like Alcorn State and local business development centers, the co-op is continually gathering information about prices and developing new customers.

Important sales contracts now include the A&P in New Orleans and Red Tomato, a Massachusetts nonprofit that works with farmers to brand and market produce to retailers, wholesalers, distributors, and other buyers. Previous purchasers included The Kroger Co. and Alliance Food Service (formerly Kraft). A contract to sell to three southern stores of the Whole Foods Market chain is also under negotiation. A Chicago-based broker, whom they originally met through Kraft, has been a steady buyer for over 20 years, though they’ve never met him in person. A much smaller percentage of the cooperative’s produce is sold directly to high-end restaurants and through farmers markets (it was a founding member of the Crescent City Farmers Market in New Orleans).

The members collectively set sales targets based on the cooperative’s marketing research, and allocate individual growing targets based on their land holdings and growing capabilities. If the co-op finds special needs for more of a certain crop, it will put out a call to the members to grow more. The co-op operates year round. Winter crops include all kinds of greens, including mustard, kale, collard, and spinach. Summer crops are watermelon, corn, squash, butter beans, peas, lettuce, and bell peppers.

Like most cooperatives, Indian Springs provides an opportunity for member participation but doesn’t require it. Member farmers are welcome to use, or not to use, the cooperative for purchasing supplies or selling their produce. But the more a member uses the cooperative, the greater his or her claim to any surplus held by the company at the end of the year. (Cooperatives don’t have or distribute “profits,” per se, but “patronage” fees.)

In exchange for an initial membership fee ($200) and annual dues ($12), any active farmer in a half dozen counties in Mississippi can become a member. The Association also has granted special permission for two outsiders to become members, though they must pay higher dues. Some members hold four or five shares, but because cooperatives are highly democratic, they give each member exactly one vote. Three retirees have cashed out and sold their shares back to the cooperative. “You can get all your money back except ten dollars,” says Ben. “That same share will be set aside and not used for someone else if their children or grandchildren want to go back to farming. They could then invest two hundred dollars and join.”

While small, Indian Springs has had a critically important impact on the region. It has kept three dozen small farmers competitive, which in turn has pumped $5,000-10,000 per week during the active growing season into rural Mississippi. “We’ve been an incubator,” says Ben. “We’ve trained a lot of young people, like those two we trained to be managers, along with other people who have worked with us—like all the students from Alcorn, Jackson State, and other places.”

The incentives for members to diversify their products, inherent in the Indian Springs business model, contribute to the ecological vitality of the member farms. So does the encouragement of more trees on the farms, and the reliance on manual labor. But the members of Indian Springs, according to Ben, also have taught one another how to improve their environmental performance: “We’ve done no-till where we can plant vegetables without turning the soil. Most of our farmers use very little chemicals, but they do use some fertilizers.”