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July 10, 2006
Missouri Farmers Union Credit Union Supports Sustainability in Low-Income Rural Areas
    by Bill Baue

The new credit union supports cooperative entrepreneurial models that advance social responsibility and environmental sustainability in low-income agricultural regions.

A May New York Times article highlighting the commitment to sustainability of the Missouri Farmers Union Credit Union (MFUCU) caught the eye of Wendy Holding, an assistant portfolio manager at Loring, Wolcott & Coolidge, a Boston-based socially responsible investing (SRI) firm. She exchanged emails with Bryce Oates, MFUCU's fundraising coordinator, and before long the fledgling credit union (which launched only a year before) had become a member of the Social Investment Forum (SIF), the SRI trade organization.

"From a social impact and environmental sustainability perspective, investing with the MFUCU provides not only the opportunity to support the production of sustainable food products but it simultaneously engenders economic opportunities for underserved rural independent farming communities," Ms. Holding told

Mr. Oates sees two key reasons why MFUCU falls squarely under the SRI umbrella. First, while MFUCU is still awaiting official designation as a community development credit union (CDCU), it clearly practices community investment by supporting its 900 members from low-income rural agricultural communities typically underserved by traditional financial institutions. Second, it advances social, environmental, and economic sustainability in a region where such considerations are often overlooked.

MFUCU's support of cooperative entrepreneurial models offer some typical examples of its commitment to social responsibility and environmental sustainability. Consider the Ozark Quality Hardwood Cooperative in the southern Missouri Ozarks, the second poorest county in the state. The coop, a producer-owned, kiln-dried wood facility using only sustainably harvested timber, is currently seeking Forest Stewardship Council (FSC) certification, the gold standard in environmental management for the timber industry. Membership in the coop is beyond the means of many timber producers in the region, so MFUCU is helping capitalize the co-op by providing $5,000 to $15,000 loans to allow those who cannot afford it otherwise to join.

In the southeastern corner of the state, the boot heel of Missouri, MFUCU is providing a package of loans to small-scale vegetable producers that do not use chemical pesticides or herbicides (though they are not certified organic.)

"Many of these vegetable growers are African American farmers who have absolutely no money--this is part of Missouri's portion of the Mississippi River delta, and there are very few jobs, it's a very impoverished area," Mr. Oates told "And so a lot of these African American farmers have been very limited in the amount of produce they can produce because they don't have the capital to expand to where it becomes financially feasible to continue--that's the lending niche we want to fill."

Mr. Oates explains several ways in which this project advances social and environmental sustainability.

"First, the production practices that we're promoting with the marketing cooperative are very environmentally sustainable," he said. "Second, it would sustain the producers themselves and provide them with a profit to keep going."

MFUCU also supports renewable energy, for example by promoting an alternative to large-scale ethanol and biodiesel plants that have several problems associated with them, according to Mr. Oates. First, purchasing ownership rights in such plants runs upwards of $50,000 to $100,000, exceeding the means of small and medium scale farmers.

"These huge plants generate an awful lot of feed that people who support industrial agriculture are trying to use as a backdoor method to expand confined-animal feeding operations, which are very harmful to the environment," said Mr. Oates. "The costs associated with building big facilities and purchasing ownership rights in them is tremendous--upwards of $50,000 to $100,000--the type of farmer we're interested in supporting as members are not able to commit that kind of capital."

MFUCU advances a model that favors wide dispersion over concentration and confinement. Smaller facilities spread out across regions would disperse the creation of feed byproducts to support sustainable livestock enterprises instead of large operations that depend on the confinement model. Furthermore, family farmers could afford to buy ownership rights in smaller ethanol and biodiesel plants, dispersing the economic benefits of renewable energy production more widely than the large-scale model of concentrating the wealth in a few hands.

"We're totally against confinement in all its forms--what we want to accomplish is a very democratic control over the economy," Mr. Oates said. "We want to see the benefits of renewable energy and agriculture to be shared by as many communities and rural farmers as possible, instead of being locked under one corporate umbrella like we've seen in commodity agriculture."

For socially responsible investors seeking to support this "reinvestment in rural America" program, MFUCU is currently offering certificates of deposit at below-market rates (three to four percent interest) for one- to three-year terms for investments between $10,000 and $100,000. MFUCU is also in the process of capitalizing a cooperative loan fund that will serve as a sister organization to the credit union.


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