Jackson Free Press

Shoppers looking for organic and locally sourced food are familiar with the unassuming little grocery on Old Canton Road in Fondren. Mostly, they just call it Rainbow.

Until Whole Foods Market opened earlier this year, Rainbow Co-op was Jackson's only food store focused solely on organic and natural products.

Inside Rainbow Plaza, shoppers will also find High Noon Cafe (the city's only all-vegetarian eatery), a co-op that provides computer access, parts and repairs, and a store selling fair-trade goods from around the world. The ATM in the common area is from Hope Credit Union, also a cooperative, and recycling bins are plentiful.

Unlike Whole Foods, which is a publicly traded chain based in Austin, Texas, Rainbow is a consumer-owned cooperative. The people who shop there also own and govern its operations.

Beyond the scale of the two groceries—Rainbow has a considerably smaller footprint—the difference between them is ownership. Similar to other Wall Street-governed corporations, Whole Foods owners are largely absentee stock holders, interested primarily in financial performance. Rainbow's owners also want the store to succeed financially, but that's not their first focus.

"We keep you healthy, and we give you good choices," said Shelby Parsons, Rainbow's community-outreach coordinator. "When you walk through the door, we want everything to be at least better than what you can get in a conventional grocery store."

Part of Rainbow's mission is also the health of the community. The co-op provides jobs to Jacksonians and helps promote other local businesses, contributing to its thriving neighborhood.

"We're not competing, really," Parsons said. "We're helping each other out."

Conditions for Life

Marjorie Kelly, author of "Owning Our Future: The Emerging Ownership Revolution," defines the two ownership models as "extractive" and "generative." Extractive companies focus on withdrawing wealth from its customers and maximizing stockholder profits in the short term, Kelly writes. Generative companies create "conditions for life" over the long term. They are rooted in the communities they serve and beholden to the common good.

The essence is this: Extractive ownership benefits the few at the expense of the many; generative ownership benefits the many over the few. Co-ops represent democracy in economic terms.

"A lot of private firms have awesome-looking mission statements, but we know at the end of the day, (they are) profit driven," said Mukesh Kumar, interim program director of the Urban and Regional Planning Department at Jackson State University. "The profit-driven character is determined either by the private investors who are operating someplace else, or it can be because of the owners."

The devil is in the details, he said. A company such as Walmart may write a mission statement about "maximizing consumer welfare," but the proof is whether the mission manifests in the public sphere. Does Walmart serve people and communities? Studies show that many of its employees rely on public assistance to make ends meet and its pricing structure tends to shutter local businesses that can't compete on price alone.

"It sounds like some very broad public-interest goal that they're pursuing, and they really aren't," Kumar said.

'Start With Where You're At'

Parsons is one of the coordinators of Jackson Rising, which is holding a conference May 2-4 at Jackson State University to promote cooperatives in the capital city. Her involvement comes from personal experience.

As the daughter of a single mother, she watched her mom work hard to make ends meet as a housekeeper. But Parsons' mother receives no benefits and has saved no money toward retirement. In contrast, Oakland, Calif.-based worker's cooperative WAGES—Women's Action to Gain Economic Security—provides member housekeepers stability and security. They can count on living wages, skills development and benefits that include adequate time off to care for their families.

"It's easy for people to think that (a co-op) would be a handout," Parsons said, but it's not. Housekeepers still work hard for often demanding customers. The difference is that WAGES members have some degree of autonomy.

"They have dignity," she said. "... With a cooperative, any occupation can be a dignified occupation."

The term "cooperative" may conjure images of 1960s hippies in communes. But cooperatives are older and more diverse than a handful of retro-styled groceries that sell free-range eggs and brown rice in bulk.

The International Co-operative Alliance traces co-ops to March 14, 1761, and Fenwick, Scotland. There, "in a barely furnished cottage, local weavers manhandled a sack of oatmeal into John Walker's whitewashed front room and began selling the contents at a discount, forming the Fenwick Weavers' Society," the ICA website says.

Co-ops Through (Black) History

Co-ops feature prominently in the experience of black Americans.

"It's a chapter of our history that has long been suppressed and forgotten in many respects," said Kali Akuno, another Jackson Rising coordinator. He came to Jackson from Atlanta, where he was co-director of the U.S. Human Rights Network, to work with the late Mayor Chokwe Lumumba to jumpstart Lumumba's vision for a cooperative, solidarity economy.

"What were the mutual-aid societies that were created in the 1700s, not only in the North, but also in the South? Folks collectively pooled their resources together, to bury their dead, to have weddings, to buy land together," Akuno said. "These are things that go back some 200-plus years."

Part of reviving such grass-roots economic activity is to have people recognize what they're already doing for each other.

"People are feeding each other, paying each other's bills based upon those personal relationships ... just to survive," Akuno said.

"Start with where you're at and what you already practice," and then move to extend it, he said. "It's not foreign to you."

African American cooperatives are the subject of a new book, "Collective Courage," from Jessica Gordon Nembhard, a professor of African American studies at the University of Maryland.

"African Americans throughout their history have come together to pool resources, take control of productive assets, and work to create alternative economies in the face of poverty, limited resources, market failures and/or racial oppression," Nembhard wrote in her 2004 paper, "Cooperative Ownership in the Struggle for African American Economic Empowerment."

"Many of the processes have been similar: Join together in the face of a need or a problem, start small and spread the risk widely, use mutual group self-help as motivation, and continuously engage in education and training. Through their modest economic empowerment efforts, many of the groups were able to win greater battles against white landowners, white unions and general economic underdevelopment."

The model isn't limited to African Americans. Immigrant communities typically form informal networks that "lock in" newcomers and provide much-needed assistance to navigate and thrive in the U.S. Many cities have strong ethnic neighborhoods—Chinatown in New York and San Francisco, for example, Little Italy, Germantown. The networks provide jobs, child care, language skills and often—and most important to starting businesses—financing.

"It increases your barrier to entry if you have to start from scratch," Kumar said, but he and Akuno agree that such extended networks don't exist in Jackson, yet.

"Money confuses a lot of things," Akuno said. In our capitalist, consumer-driven society, "trust is a hard thing to come by."

'New Alternatives'

Rainbow began when two separate buying clubs joined forces in the 1970s to buy better food than what was available in the city's supermarkets. Originally, the group organized as an agricultural association, which is supposed to be composed of food producers, said Luke Lundemo, who sits on Rainbow's board of directors. As demand for organic foods grew, the category became an uncomfortable fit.

"We weren't all producing food by any means," he said.

The cooperative business model was a natural evolution. Mississippi, however, does not allow consumer co-ops to incorporate here, so the group looked to Wisconsin, one of about 30 states with modern co-op laws. Rainbow incorporated there, but does business, and pays taxes, in Mississippi.

Lundemo considers the state's co-op laws a surmountable issue for organizations such as Rainbow, but efforts are underway to change the laws.

"I think we need our legislators much more educated about what cooperatives are," he said. "They seem to be easily scared off by rumors. I think this year it was a rumor that this was a back-door way to getting unions, which makes absolutely no sense, because if (workers) own the business, you don't need a union."

In most regards, co-ops confront the same obstacles that any business faces. About half of all small businesses fail within their first year. Access to credit is an important strategic piece of the puzzle. Traditional sources of capital—banks and investors—are risk averse. If a prospect has a little understood business model or lacks collateral, money is scarce.

Akuno acknowledged that more work in the financial arena is necessary. Jackson Rising has been in discussion with local credit unions, seeking to leverage what exists and pooling financial resources.

"We're going to have to figure that out and create new alternatives, if necessary," he said.

Cooperatives also need to provide quality offerings to fill a need.

"You're facing the market, which must show demand for the product you're making," Kumar said. "If there's not enough demand, it doesn't matter what kind of firm you are."

One reason businesses fail is a lack of knowledge. Owners may be excellent in their fields, but unfamiliar with fundamental business strategies and tactics for success.

"Where (a co-op) has an advantage is with that many owners in the business, you have a large amount of expertise to draw on," Lundemo said. With many people invested in the business' success, owners may also provide distribution, marketing and financial know how. It's not unusual for co-ops to hire outside assistance, but for startups, lack of knowledge can be a barrier.

"That's a challenge for any business," Kumar said. "When you're trying to put together a worker's co-op, do you have the expertise to run the business? Quite often, at the beginning, you're talking about sweat equity," where workers can provide only their labor.

"The market always produces winners and losers," he continued. "Typically, we don't pay attention to the losers at all. In a city like Jackson where we clearly see that we have a whole bunch of people the systems sidelined or marginalized, that does not mean the people don't have skill sets of any kind. They really do. Everybody has some."

Kumar sees cooperatives as one solution to market failures. Perhaps more important, they can provide a vital civic service by building collaborative skills and educating its owners.

"Someone who is invested in a workers' co-op is probably also likely to vote, is also going to be more interested in public discourses, probably going to be more interested in democratic institutions and building that institution," he said.

"We can't expect that kind of value to come out of most other (for-profit) enterprises. ... They're not interested in that."

Developing Powerhouses

Most cooperative ventures in Jackson are in their infancy. Rainbow has a community garden on Tougaloo College's campus in north Jackson, for example. It's a work-to-eat arrangement, where cultivators share in the bounty. Business incubators have also emerged.

During Jackson Rising's early informational meetings, several good ideas came from participants, Akuno said. Some could start immediately, such as recycling and composting. Other ideas may take longer, such as organizing a skilled labor worker co-op to help the city address its many infrastructure needs. Some could take years to develop.

"It's not going to solve all of the problems, not by a long shot, but what this model does is take the abundance of human resources and find a way to challenge those in productive ways, in non-exploitive ways," Akuno said.

"We have to start with some concrete things we can do in the here and now, and through that practice, build up the sense of solidarity," he added.

Today, co-ops exist in nearly every economic sector across the globe. A business may be consumer owned, like Rainbow, or owned by workers, producers of goods or services, or even groups formed to purchase goods. Beyond retail, co-ops can center on housing, child- and health-care, insurance, banking, utilities, manufacturing and services.

They also come in a variety of sizes. Mondragon, a workers' cooperative in Spain's Basque region, is the country's 10th largest business. Founded in 1956, Mondragon employs more than 92,000 people, of which about a third has ownership stake in the company. Its operations include manufacturing, retail sales, education and finance.

In the United Kingdom, The Co-operative, an 8 million-member consumer co-op, owns 4,500 stores across the nation and employs nearly 90,000 people. Its 2012 sales were roughly $22.5 billion.

Ninety-one percent of Japanese farmers are members of agricultural co-ops, and in Kenya, 63 percent of its citizens derive their income from cooperatives.

'Owned by Those We Serve'

The United States has the largest number of people in the world claiming co-op membership: 256 million. Across the nation, some 30,000 businesses are co-ops. In 2007, Mississippi had almost 900 co-ops, with more than 2.3 million members and revenues of about $4.6 billion.

Next door to Rainbow, Montgomery Ace Hardware is part of a retailer-owned cooperative. Ace has nine stores in the Jackson area, and internationally, 4,600 Ace stores employ about 80,000 people. The co-op's Oak Brook, Ill., headquarters and its regional distribution centers boast another 5,900 "team members."

In Mississippi, one cooperative was responsible for bringing electricity to the nation's farmers.

"By 1930 ... 84.8 percent of all U.S. homes in large urban areas and small towns had electrical service, but only 10.4 percent of rural homes had this luxury," states the Mississippi Department of History and Archives website. "In that same year, only 1.5 percent of Mississippi farm homes had electrical lights, the least of any state in the country."

The "Corinth Experiment" became the nation's first rural electric cooperative, the Alcorn County Electric Power Association, courtesy of a $114,632 federal loan in 1934, during the Great Depression.

"People wanting electricity paid a membership fee to the cooperative and committed to using a minimum amount of kilowatt-hours per month," the MDHA website continues. "Individuals were responsible for wiring their homes and barns."

The success of ACEPA convinced President Franklin Roosevelt to establish the Rural Electrification Administration in 1935. Based on the Corinth model, the REA made low-interest loans to rural co-ops. Four years later, 417 rural electric co-ops served 288,000 households across the nation. By 1940, 27,670 Mississippi farm families had electricity, six times as many as 10 years earlier.

Twenty five power co-operatives still operate in Mississippi under the umbrella of the Electric Power Associations of Mississippi. The co-ops employ nearly 3,000 people, and they deliver electricity to more than 762,000 meters. Among them is the nonprofit Coast Electric Power Association in Bay St. Louis.

"As a cooperative, we are owned by those we serve, and we take our fiscal responsibility seriously," said CEPA President and CEO Bob Occhi in a November 2013 release announcing distribution of more than $3 million in earnings to 61,253 eligible members. "Coast Electric will continue to do everything we can to control costs, and we ask members to educate themselves about what they can do to save and let our elected officials know how important reliable, affordable electricity is to them."

Economic Justice

One of the issues for Jackson Rising is to assuage the fears cooperatives can engender. Some believe this is a "Trojan horse" for trade unions, Akuno said. Union co-ops do exist, as do companies with employee stock-ownership plans that bridge the worlds of unions and cooperatives.

"Some of those operate democratically, like a co-op, and some don't," Akuno said, but there are fundamental differences.

Trade unions represent workers within traditional corporate structures.

"Where the union comes in is to protect those who are not the owners," Akuno said.

In contrast, workers, producers or buyers are owners of cooperatives.

"There is no external board or external bond-holders or share-holders," Akuno said. "Those don't exist. In a co-op, everyone is there as an equal partner, an equal player and has (an) equal stake."

Jackson Rising seeks to familiarize Jacksonians with what is possible to do for themselves.

"The goal is to see more economic development, but we want that development to happen in a fair and equitable way, to see economic justice as well as economic development," Parsons said. "We want to see people empowered. We want to see people rise up to their potential."

Akuno doesn't dismiss large corporations and the government in providing jobs, but he questions whether people can wait for those entities to return to supporting low- and middle-class people well.

"There are certain basic needs that we can take care of ourselves. How do we do that? How do we organize ourselves to do that in a sustainable way? That's the thing that's new in this particular time and in this particular context," he said. "... We're going to have to fight from below for this to emerge. That's the reality."

"It doesn't matter who you are, what you do for a living or how much money you make," Parsons said. "This is relevant to you."

"Jackson Rising: New Economies Conference" is May 2-4 at Jackson State University. The conference is $25 for Jackson residents ($30 on site). For information, visit jacksonrising.wordpress.com or the conference Facebook page.