Forestry cooperatives are experiencing a revival in the United States, and Wisconsin is leading the way. As of April 2002, the nation had nine fully established forestry co-ops, six of them in the state of Wisconsin. Can Wisconsin”s new forestry cooperatives learn from those that came before them?

A team of University of Wisconsin-Madison researchers says “yes.”

Emily Sturgess, a former graduate research assistant at the Departments of Forest Ecology and Management and Geography, and Kim Zeuli and Mark Rickenbach, assistant professors at the College of Agricultural and Life Sciences, recently wrote a bulletin published by the University of Wisconsin Center for Cooperatives analyzing the rise and fall of North American forestry cooperatives.

Forestry co-ops are groups of forest landowners that join together to cooperatively manage private forest lands. Although the goals of each cooperative are set locally, most provide landowner education and share the costs of forest management, timber processing, and product marketing.

Wisconsin”s forestry cooperatives play an important role in ensuring responsible, sustainable woodland management that protects soil, watersheds, and wildlife habitat. More than half of Wisconsin”s forestland is owned by private individuals, and most own relatively small parcels. Sustainable production on these lands depends in part on the ability of these landowners to join together to actively manage their properties.

Early forestry cooperatives were formed during the depression years of the late 1930s and 1940s. According to Sturgess, Zeuli and Rickenbach, they went out of business due to inadequate capital, lack of business, insufficient interest by members, and/or inadequate management. Today”s organizations face identical issues.

Finding sufficient working capital is a challenge for all new businesses, but is especially difficult for new cooperatives. Co-ops are constrained by state and federal regulations that limit returns on equity investments. It often takes a long time for financial returns to be significant, making potential members reluctant to invest. Forestry cooperatives compete in markets dominated by large, established timber companies. And operating loans are often difficult to secure.

Effective management also plays a critical role in determining the failure or success of a forestry co-op. Sturgess, Zeuli and Rickenbach note that successful co-op managers must be effective decision makers and planners, and excellent communicators.

Forestry cooperatives can also fail for non-business reasons. They are owned and controlled by members, who elect a board of directors. The board hires a general manager who is responsible for carrying out activities set by the membership. Co-ops can be harmed when management disagrees with objectives set by the board, or when cooperative membership lacks a general consensus on important operating issues.

Wisconsin”s modern forestry cooperatives face many challenges. Their chances for success can be improved by learning from the experiences of their predecessors. And that success is good news for Wisconsin”s forests.
For more information on Wisconsin”s forestry cooperatives, contact Mark Rickenbach.

A complete copy of the UWCC bulletin can be found at http://www.wisc.edu/uwcc/info/uwcc_bulletins/bulletin_03_04.pdf