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 SocialFunds.com.
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.
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 SocialFunds.com. "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
Mr. Oates explains several ways in which this project advances social and
"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."
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
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.