How to Start a Farm Co-Op for Fresh Vegetables

Survey nearby vegetable farmers to determine their interest in starting and joining a co-op. Depending on your needs and goals, you may want as few as two other farms to join you co-op or as many as 50.

Hold a meeting with interested farmers to discuss the purpose of your co-op and proposed activities. Clarify your primary mission and goals, which will likely include creating a central "co-op brand" under which members will market their vegetables to large buyers, and creating a voting bloc to help influence legislation related to vegetable farmers. Determine how decisions will be made in the co-op, whether through voting, electing officers or through a steering committee.

Incorporate your co-op according to state law. Consult with your state's Rural Development Office or a qualified attorney for guidance.

Determine cost structure of co-op. Decide if members will pay membership fees to cover costs or if operating costs will be deducted from overall co-op profits. Ensure that correct systems are in place to cover costs, divide profits and invest proceeds. Get some financial advice regarding anticipated capital, financing, taxes and bookkeeping needs.

Draft a plan of activities and co-op objectives. Your objectives may include selling a certain volume amount of fresh produce by such and such date, or gaining a certain amount of new buyers by such and such date. Create a strategy to meet each objective and assign related jobs, such as creating a logo or hiring a salesperson, to co-op members.

Draft all agreements, including co-op membership agreements, financial agreements and work contracts with a lawyer. Ensure that all parties agree upon and sign the documents.

Begin official co-op operations, including marketing and distributing members' fresh vegetables to large buyers. Advertise, hire salesmen and develop personal relationships with potential buyers to increase sales. Ensure systems are in place to fill orders, provide customer service to buyers, pay bills and track profits.

Strive for consistency in your brand and in your output. Every delivery and piece of correspondence should be correctly branded with the co-op logo, and all produce and vegetable deliveries should resemble one another, even if they come from different farms. This will foster trust in the co-op brand and gain you credibility in the industry.

Hold regular meetings with co-op members to ensure that goals and objectives are being adhered to and that members are in agreement about the direction and activities of the co-op. Review your goals constantly and hold co-op members accountable for assigned tasks. Ensure that financial goals are being met and that the co-op is a worthy investment of members' time and money.