Author: Hannah Scott

2nd Bi-Annual Cooperative Law Conference Will Offer Professionals Opportunity to Learn About the Co-op Economy

Conference registration table.

The 2nd Bi-Annual Cooperative Law Conference convened by Advocates for Basic Legal Equity and co-sponsored by the CFAES Center for Cooperatives will be held online on June 5, 2020.

The CFAES Center for Cooperatives is pleased to be co-sponsoring the 2nd Bi-Annual Cooperative Law Conference in our region on June 5, 2020. The virtual conference will be organized around the theme, “The Legal Life of a Cooperative,” and will feature attorneys and developers sharing their expertise on worker co-op start-ups and transitions, cooperative financing, and regional cooperative development strategies. Attorneys, aspiring-attorneys, and others who are interested in learning more about cooperatives and collaborative enterprises will surely find value in the conference’s eight sessions featuring twelve speakers.

The CFAES Center for Cooperatives, along with the Sustainable Economies Law Center, Alliance of Ohio Legal Aids, and Legal Aid of Western Ohio, are sponsoring the event, which will focus on regional efforts in southwest Ohio, but will be applicable across geographies. Attorneys in Ohio will be able to receive up to five hours of CLE credit for the conference (application pending). Registration for the event is $60.

Co-sponsoring the event is another way the Center is helping to build the community of professionals who support cooperatives in our region. In 2019, the Center surveyed attorneys, accountants, and tax professionals who work with cooperative and collaborative enterprises, building a directory to help the cooperative community locate such expertise. Visit the Center’s Cooperative and Collaborative Enterprises Legal and Accounting Directory.

Broad Thinking: Why the co-op model could be a key to closing the broadband gap

An individual working at a computer.

The current public health crisis has moved many of life’s daily tasks online. Without reliable internet, some rural communities are at risk of being left behind.

The impacts of the COVID-19 public health emergency are vast and varied. While we recognize and thank the many people who continue to do the essential jobs of feeding, moving, and caring for America in person, many Americans are now working, learning, and connecting online. Everyday tasks like work meetings, classes, grocery shopping, religious services, doctor’s appointments, hangouts with friends, and more, have moved online. But what happens when you don’t have reliable internet access at home? Millions of rural Americans faced this question long before the current public health crisis and in our current context, the broadband divide between urban and rural America has become more pronounced than ever.

Connected Nation Ohio, an organization that studies and provides resources for rural broadband connection, estimates that approximately 710,000 Ohioans do not have internet access at home. That doesn’t include people who have internet access that is unreliable or prohibitively slow. The Federal Communications Commission estimates that almost 30 million Americans are “unable to reap the benefits of the digital age.” In 2017, the Interagency Task Force on Agriculture and Rural Prosperity recognized the expansion of high-speed, high-capacity internet as a key infrastructure priority in rural America. Beth Ford, Chief Executive Officer of Land O’ Lakes, one of the nation’s largest farmer-owned cooperatives, has highlighted the far-reaching effects of the problem and called for significant infrastructure investments in broadband, reminding people that, “there is a shared destiny between urban and rural America.”

Cooperatives are not new to problem-solving on behalf of rural Americans. According to the National Rural Electric Cooperative Association, in the mid-1930’s as many as 90% of rural homes lacked electricity. By 1953, more than 90% of America’s farms had electricity. This transformation was the result of the rapid growth of rural electric cooperatives, which currently provide electricity to 56% of the nation’s landmass and over 20 million member-owners. Co-ops are owned and controlled by their users and provide services to member-owners at cost. Today, nearly 100 rural electric cooperatives are investing in infrastructure to bring high speed internet to their member-owners.

In some communities, the cooperative model is being explored anew to determine whether a community-owned enterprise can help close the broadband gap. Groups are coming together to assess whether they can form cooperatives to invest in the infrastructure to connect their homes and businesses to broadband service providers. The enterprises would be controlled by community members through an elected board of directors.

Community members in Washington County, Ohio have begun exploring options for a community-owned broadband enterprise. David Brown, who is leading the Southeast Ohio Broadband Cooperative Exploratory along with additional volunteers from the community, explains, “Most areas have no broadband access at all and rely on slow, expensive and unreliable technologies like cellular hotspots and satellite internet.” After conversations with elected leaders, local economic developers, and others, the group surveyed the community about their current broadband access and interest in joining a broadband co-op. They started engaging with community members via a Facebook group where they share updates and information. The group has over 925 members after just three weeks. While they have a lot of work ahead to develop their co-op, David Brown shares that the group’s vision is to, “bring affordable, reliable broadband access to rural areas in SE Ohio that will create economic opportunities, connect communities and encourage members to be a part of the solution to a problem that has long plagued the area.”

When exploring a cooperative model in any industry, it is vital to explore the feasibility of an enterprise and to develop robust business plans. At the same time, organizers should educate their potential members on the co-op model and help them understand their role in a newly formed business. The College of Food, Agricultural, and Environmental Sciences Center for Cooperatives at Ohio State has been assisting new and emerging cooperatives since 2001, helping groups understand the co-op model, explore the feasibility of a new co-op, develop the business plans and structure for a new enterprise, and more.

If you would like to learn more about broadband cooperatives or to explore an opportunity for community-owned enterprises in your community, contact the CFAES Center for Cooperatives!

Cooperatives Eligible to Receive COVID-19 Assistance

 

Cooperative businesses experiencing financial issues due to the COVID-19 pandemic are eligible to receive assistance through two major programs of the U.S. Small Business Administration, the Payroll Protection Program and the Economic Injury Disaster Loan program.

Payroll Protection Program

The Coronavirus Aid, Relief, and Economic Security (CARES) Act created the Payroll Protection Program (PPP), providing $349 billion for small business loans for qualified payroll costs, rent, utilities, and interest on mortgages and other debt obligations. PPP loan amounts are forgivable as long as:

  • Loan proceeds are used to cover payroll costs and most mortgage interest, rent, and utility costs over the 8-week period after the loan is made; and
  • Employee and compensation levels are maintained.

The National Council of Farmer Cooperatives (NCFC) and National Cooperative Business Association (NCBA CLUSA) have shared that cooperative businesses in agriculture, purchasing, consumer food, and worker cooperatives that meet the size criteria, generally with fewer than 500 employees, are eligible for this program based on the interim rule and Department guidance.

Applicants can apply to the PPP through eligible Small Business Administration lenders beginning Friday, April 3, 2020. Applicants will be required to submit an application and payroll documentation. To find an eligible SBA lending institution, tap or click here.

For a factsheet about the PPP, including information about loan terms, interest rates, and repayment periods, tap or click here.

Economic Injury Disaster Loans

The Small Business Administration’s Economic Injury Disaster Loan (EIDL) program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing due to COVID-19.

In response to the COVID-19 pandemic, small businesses in all 50 states and Washington, D.C. are eligible to apply for an EIDL advance of up to $10,000 for businesses that are currently experiencing a temporary loss of revenue. This loan advance does not have to be repaid and will be made available within three days of a successful application, even if the loan is not approved or if it is approved and not taken.

Cooperative businesses with fewer than 500 employees are eligible for the EIDL program.

To learn more about the EIDL program, including information about interest rates, loan terms, use of loan funds, and the application process tap or click here. Applicants to the EIDL program can apply directly to the SBA.

To learn more about applying to the EIDL program as a cooperative business, watch this webinar, “Demystifying SBA’s Economic Injury Disaster Loans,” hosted by the National Cooperative Business Association (NCBA CLUSA).

Cooperate with the CFAES Center for Cooperatives

  • Visit us online at go.osu.edu/cooperatives
  • Follow us on Twitter @OSUCooperatives
  • Like us on Facebook @OhioStateCooperatives

Learn more about the Mid America Cooperative Council

Grant Resources for Food Enterprises

A basket of vegetables, including carrots, onions, and beets. Food enterprises and organizations,

The U.S. Department of Agriculture has multiple grant funding opportunities to develop or expand food system enterprises with the goals of increasing access to local or regionally produced foods and enhancing marketing opportunities for agricultural producers.

If you are interested in learning more or in developing an application, the CFAES Center for Cooperatives can assist with grant development and review. Please note that our staff do not write grants on behalf of projects. Contact us at scott.1220@osu.edu bauman.67@osu.edu.

Farmers Market Promotion Program

“FMPP funds projects that develop, coordinate, and expand direct producer-to-consumer markets to help increase access to and availability of locally and regionally produced agricultural products.”

Eligible entities:  Agricultural businesses and cooperatives; Community Supported Agriculture (CSA) networks and associations; food councils; economic development corporations; local governments; nonprofit and public benefit corporations; producer networks or associations; regional farmers’ market authorities; tribal governments.

Deadline to apply: May 26, 2020 at 11:59 p.m. Eastern time

For more information, click here. For the Request for Applications, click here. Learn more in this short video from USDA.

Local Food Promotion Program

“LFPP funds projects that develop, coordinate, and expand local and regional food business enterprises that engage as intermediaries in indirect producer to consumer marketing to help increase access to and availability of locally and regionally produced agricultural products.”

Eligible entities:  Agricultural businesses and cooperatives; Community Supported Agriculture (CSA) networks and associations; food councils; economic development corporations; local governments; nonprofit and public benefit corporations; producer networks or associations; regional farmers’ market authorities; tribal governments.

Deadline to apply: May 26, 2020 at 11:59 p.m. Eastern time

For more information, click here. For the Request for Applications, click here. Learn more in this short video from USDA.

Regional Food System Partnerships

“The RFSP supports partnerships that connect public and private resources to plan and develop local or regional food systems. The RFSP focuses on building and strengthening local or regional food economy viability and resilience by alleviating unnecessary administrative and technical barriers for participating partners.”

Eligible partnerships must include at least one eligible entity and at least one eligible partner.

Eligible entities include: producers; producer networks or associations; farmers or rancher cooperatives; majority controlled producer-based business ventures; food councils; local or tribal governments; nonprofit corporations; economic development corporations; public benefit corporations; community supported agriculture networks or associations; regional farmers’ market authorities.

Eligible partners include: state agencies or regional authorities; philanthropic organizations; private corporations; institutions of higher education; Commercial, Federal, or Farm Credit System lending institutions.

Deadline to apply: May 26, 2020 at 11:59 p.m. Eastern time

For more information, click here. For the Request for Applications, click here.

You can explore additional grant opportunities from the U.S. Department of Agriculture’s Agricultural Marketing Service here and the National Institute of Food and Agriculture here.

COVID-19 Resources for Small Businesses

OSU South Centers located in Piketon, Ohio.

The OSU South Centers’ Business Development Network is prepared to help small businesses virtually.

Remember We’re Here to Help

The OSU South Centers Business Development Network continues to be available to help your small business. Our development specialists are working remotely and are available to meet virtually to assist your business.

Small Business Development Center (SBDC)

Manufacturing Extension Partnership (MEP)

CFAES Center for Cooperatives

Stay in Touch with Customers Remotely Using Online Tools

Businesses of all shapes and sizes can use technology to inform and stay in touch with customers. If you have had changes to your hours, location, contact information, or you simply want to communicate with your customers, consider updating your Google My Business profile or sharing updates or hosting events for your customer community online using Facebook, Instagram, or other online tools.

Utilize Free or Enhanced Capability Tech for Remote Working

If you or members of your team are shifting to remote work, a number of technology providers are expanding capabilities for their current customers for free or are making their platforms available at no cost for a limited time. GoToMeeting has released Emergency Remote Work Kits for current LogMeIn customers and other eligible institutions and organizations,  Google is granting free access to expanded capabilities for G Suite customers, Microsoft offers a free version of their Teams collaboration platform and is expanding free access to Teams, and Cisco has expanded the capabilities on their free Webex offer and is providing free 90-day licenses to businesses who are not Webex customers.

Get some tips on ensuring a successful transition to remote work:

For more information about collaboration tools offered in response to the public health situation, check out this article from ZDNet.

Small Business Administration (SBA) Economic Injury Disaster Loans (EIDL)

The SBA EIDL program can provide loans of up to $2 million to small businesses, small agricultural cooperatives, and most private nonprofits that are unable to meet obligations and pay ordinary and necessary operating expenses due to a recognized economic disaster. Loan amounts are based on actual economic injury and financial need. Please note that EIDLs require repayment and that EIDL is not a grant program. Terms will be determined on a case by case basis.

Ohio was declared a disaster zone under the EIDL program on Thursday, March 19, 2020 effective beginning January 31, 2020.  Businesses can learn about the process for applying for EIDL assistance, gather loan application materials, and apply online if they think they will qualify for and require EIDL assistance. Required application materials will include:

  • Completed SBA Business Loan Application
  • Tax information authorization form for the applicant, principals, and affiliates
  • Copies of the most recently filed federal income tax return, including all schedules
  • Personal financial statements for the applicant, each principal, or general partner
  • Schedule of liabilities listing all fixed debt

Assistance for Exporters

The Small Business Administration (SBA) Export Express loan program is available for U.S. small businesses that export directly overseas or indirectly by selling to a customer that then exports their product. The Export Express loan program can provide up to $500,000 of financing for businesses prior to finalizing an export sale or while pursuing opportunities overseas, such as identifying a new overseas customer if an export sale is lost due to the coronavirus pandemic. Explore information on SBA’s COVID-19 small business loan resources.

IRS Federal Income Tax Payment Relief

The IRS has announced payment relief measures for individuals and businesses that owe federal income tax. Note that this payment relief applies only to federal income tax payments and does not apply to payments of state taxes or other federal taxes.

The income tax payment deadline for individuals, including self-employed income, is being automatically extended to July 15, 2020 for up to $1 million of a taxpayer’s 2019 tax due.

The income tax payment deadline for C Corporations is being automatically extended until July 15, 2020 for up to $10 million of the corporation’s 2019 tax due.

Also, note that recent reports indicate that Treasury Secretary Steven Mnuchin has announced that the federal income tax filing deadline will be delayed to July 15, 2020.

Unemployment Benefits and Employee Leave

An executive order issued by Ohio Governor Mike DeWine has expanded flexibility for Ohioans to receive unemployment benefits during the state’s emergency declaration period. Learn more about coronavirus and unemployment insurance benefits from the Ohio Department of Jobs and Family Services.

On March 18, 2020, the Families First Coronavirus Response Act (H.R. 6201) became law with provisions for paid sick leave for employees affected by COVID-19, expanded coverage of the Family and Medical Leave Act for absences related to COVID-19, and certain tax credits to help offset the costs of paid leave requirements, among other provisions. Learn more about the Families First Coronavirus Response Act in, “Time to Hit Pause: What Employers Need to Know About Yesterday’s Families First Coronavirus Response Act,” from Forbes.

Please note that if you have questions about your legal requirements as an employer, you should consult a human resources or legal professional.

Keeping Your Workplace Safe

The U.S. Occupational Safety and Health Administration (OSHA) has information to help employers address the coronavirus pandemic, including guidance on preparing various workplaces for COVID-19, preventing worker exposure to the virus, and more. To see all of the COVID-19 information from OSHA, click here.

Guidance for Businesses and Employers from the CDC

In response to COVID-19, the U.S. Centers for Disease Control and Prevention recommends that employers and businesses:

  • Actively encourage sick employees to stay home
  • Separate and send home sick employees
  • Emphasize staying home when sick, respiratory etiquette and hand hygiene by all employees
  • Perform routine environmental cleaning
  • Advise employees before traveling to take certain steps

Note that if an employee is confirmed to have COVID-19, employers should inform fellow employees of their possible exposure to COVID-19 in the workplace, but maintain confidentiality as required by the Americans with Disabilities Act (ADA).

Ohio Governor Mike DeWine has requested that Ohio employers ask their employees to check their temperature before coming to work. Stay up to date on Ohio’s Public Health Orders and COVID-19 response at coronavirus.ohio.gov.

Other Helpful Resources for Small Businesses

Ready to Grow your Food & Farm Business?

The CFAES Center for Cooperatives, OSU Extension Direct Food & Agricultural Marketing Team, and Ohio Farm Bureau are teaming up to host an interactive experience for small-to-medium food entrepreneurs who are poised to grow their businesses. Foodpreneurs will engage with experts in branding, sales, marketing, and more to learn strategies to meet their growth goals.

Date: Two-part workshop on September 23rd and 30th, 2019

Time: 2 p.m. – 6:30 p.m.

Location: Keller Market House, 134 S. Columbus Street, Lancaster, Ohio 43130

Participation is limited to 30 foodpreneurs. Interested foodpreneurs must apply by 5 p.m. on August 20, 2019. Foodpreneurs will be notified of their selection and scholarship availability by August 22, 2019.

Apply to participate in Foodpreneur School!

 

The cost to participate in Foodpreneur School is $125 per person due by September 9, 2019. Ohio Farm Bureau member price is $75. A limited number of full scholarships are also available.

Questions about Foodpreneur School? Reach out to the CFAES Center for Cooperatives at osucooperatives@osu.edu or 740-289-2071 ext. 111.

OSU Professional Services for Collaborative Enterprises Survey

The Center for Cooperatives in the College of Food, Agricultural, and Environmental Sciences at The Ohio State University is working on a project to assess the professional legal, accounting, and tax services available to cooperative and collaborative businesses in Ohio and West Virginia.

The goals of the project are twofold.

  • First, using information collected from an online survey, the Center will create a directory of professionals who provide services to cooperatives and collaborative enterprises.
  • Second, the Center will use online survey responses to better understand professionals’ experience levels, continuing education practices, and interests in network building to help develop programming and resources for professionals in our region’s cooperative community.

How can you help with this project?

If you are an attorney, accountant, or tax professional who works with cooperatives and collaborative enterprises, we invite you to take the short survey at the link below. The survey will gather information for a directory of professionals and ask about your experience with cooperatives as well as continuing education and networking interests. We anticipate that the survey will take approximately 5-10 minutes of your time.

If you know legal, financial, or tax professionals working with cooperatives, please forward this invitation to participate to them! Gathering robust information will help us create valuable resources for the cooperative community.

Professional Services for Collaborative Enterprises Survey

If you have questions about his project, please contact Hannah Scott at scott.1220@osu.edu or 740-289-2071 ext. 227. This survey is for a study being conducted by The Ohio State University.

Contribute to Food Hub Knowledge, Participate in 2018 Food Hub Benchmarking Study

Did you know that the average gross revenue of a food hub in 2017 was $2.4 million? Or that the most common types of customers for food hubs are restaurants and direct consumers? Or that the average number of vendor selling to a food hub was 55 in 2013?

 

“Findings of the 2017 National Food Hub Survey,” published in March 2018, details these and many more findings from a comprehensive review of the maturing food hub sector in the United States. The report reviews many aspects of a food hub business from finances to food safety, giving food hub stakeholders access to information that can help inform their decisions, based on a national survey of existing food hubs. You can learn more about the study’s results in a webinar hosted by the National Good Food Network at 3:30pm EST on Thursday, April 19, 2018.

“Counting Values: Food Hub Financial Benchmarking Study,” released in 2014 by the Wallace Center at Winrock International, Farm Credit East, and other partners, details financial and operational characteristics for food hubs in a way that can serve as performance indicators for other businesses in the sector.

Food hub stakeholders have an opportunity now to contribute to an update of research like this through the 2018 Food Hub Benchmarking Study. The study, according to the Wallace Center at Winrock International will collect financial and operational data from food hub businesses, standardizing and aggregating the data to develop sector insights and performance indicators. Hubs that participate in the study will receive and individualized benchmark report and technical assistance on using the report as a business tool. Learn more about how to participate in the study here.

According to the “Findings of the 2017 National Food Hub Survey,” fresh produce and herbs are the most common products sold by food hubs in the U.S.

 

Changes to Tax Law: Section 199A Deductions

The cooperative world has seen a lot of discussion this month about the potential consequences of the new Tax Cuts and Jobs Act of 2017 for agricultural cooperatives and their members. Explore these resources from Iowa State University’s Dr. Keri Jacobs and Dr. Brian Briggeman of Kansas State University with Dr. Philip Kenkel of Oklahoma State University to learn more.

“A Discussion of the Sec 199A Deduction and its Potential Impacts on Producers and Grain Marketing Firms” by Dr. Keri Jacobs in farmdoc daily.

“Impact of Tax Reform on Agricultural Cooperatives: Special Edition ACCC Fact Sheet Series Collaborative Research KSU/OSU” by Dr. Brian Briggeman and Dr. Philip Kenkel.