Question 1

WHO CAN BECOME AN OWNER?

Accepted Answer

Only individuals (not businesses, organizations, or groups of people) can own shares, and each individual is limited to a total of 10 shares, regardless of the class of share. However, members of the same household are eligible to own 10 shares each. For example, a married couple could each purchase 10 shares, for a total of 20 shares/votes for their household. An individual can also invest in different classes of shares, but the total number of shares owned cannot exceed 10. This ensures that no one individual controls the business, keeping it a truly cooperative enterprise. Also note that any adult in the United States can become an owner of the cooperative.

Question 2

WHAT ARE THE RIGHTS AND RESPONSIBILITIES OF OWNERSHIP IN THE COOPERATIVE?

Accepted Answer

Every share purchased is associated with one vote, and all shareholders have the opportunity to be elected to our Board of Directors at our annual Meeting of Owners. All shareholders will be included in all shareholder communications and invited to all owner meetings. However, shareholders have the right but not the obligation to participate in the cooperative's decision making. This means they can take on as much responsibility as being a board member (which does bear specific obligations) or as little as never voting or attending meetings. You, as an owner of the cooperative, can make of it what you wish.

Question 3

WHAT IS THE DIFFERENCE BETWEEN PREFERRED AND COMMON STOCK?

Accepted Answer

The main difference between preferred and common stock is that preferred stock is associated with an interest rate of 4% payable annually until repayment of principal, while common stock is associated only with consideration for dividend payments when available. All decisions regarding payment of dividends to shareholders are at the discretion of the Board of Directors. There is no principal repayment of common stock.

Question 4

HOW DOES INTEREST PAYMENT AND PRINCIPAL PAY-OFF OF PREFERRED STOCK WORK?

Accepted Answer

Interest on preferred stock will begin to accrue when the co-op commences business operations (i.e., has its grand opening; likely summer/fall 2022) and will be paid annually as long as the co-op is financially capable of doing so. Principal payoffs are at the Board’s discretion (and with the intention of paying off within 5–10 years). After repayment of principal and accumulated interest, each share is converted to Common A stock.

Question 5

WILL THIS COOPERATIVE COMPETE WITH THE NEW COOPERATIVE STORE IN MT. PULASKI?

Accepted Answer

The short answer is: Absolutely not. Our cooperative will not have a retail store at all. FarmFED Co-op is designed to partner with and support Market on the Hill (MOTH) in Mt. Pulaski in several concrete ways:

1) MOTH and FarmFED have a current lease arrangement that allows it to use our new commercial kitchen - to expand its baking and food prep capacity. That means more delicious local jams, sauces, baking mixes, breads and baked goods, dried herbs and spices...almost anything imaginable. By design, our licensed commercial kitchen will be made available for rent to other local food entrepreneurs, meaning more local food products will be available in Mt. Pulaski than ever before.

2) When we are operational and begin processing and freezing local produce, we can pack not only larger units for big buyers like schools and hospitals but also smaller retail packs suitable for the freezer section at your favorite grocery store. This service can help MOTH fulfill its mission to offer nutritious, local staple foods to its customers.

Beyond what is described above, the opportunities to collaborate and grow together are endless. MOTH was just the beginning. Then comes the FarmFED Co-op. What do you imagine will be next?

Question 6

IS THIS A FOOD HUB?

Accepted Answer

The USDA defines a food hub as “a centrally located facility with a business management structure facilitating the aggregation, storage, processing, distribution, and/or marketing of locally/regionally produced food products.” 
With this broad definition, FarmFED Co-op is indeed a food hub. Food hubs take a variety of forms and exist across the country, sometimes as cooperatives, sometimes as non-profits, sometimes as links in a chain of multiple food hubs or as part of a larger entity such as a grocery store or a community organization. After looking at many models, both successful and not, of food hubs across the country, and looking at our needs and resources as a community, we identified a fresh food processing facility as the specific kind of food hub we would develop. In time, we could grow to serve other purposes in our food system, or other food hubs could also emerge nearby to fill those roles.

Question 7

WILL FarmFED WORK WITH CONVENTIONAL GROWERS? ORGANIC GROWERS?

Accepted Answer

FarmFED Co-op plans to work with both conventional and certified organic growers. This of course becomes complicated when organic produce comes in contact with non-organic produce, threatening the growers’ certification and market premium that goes with it. This can be addressed by either offering satisfactory prices to all types of growers, or by creating clear protocol for differentiating produce within the facility. This protocol may wind up making it easier for organic growers to use the custom processing services of our facility rather than its bulk buying program (learn more below) to maintain their farm's values identity. Regardless, our cooperative has both organic and conventional growers as owners, and their voices are being heard as we continue to develop our standard operating procedures.

Question 8

HOW WILL GROWERS INTERACT WITH FarmFED’S OPERATIONS?

Accepted Answer

Growers can interact with FarmFED’s operations in four distinct ways:
 • Bulk buying: Growers sell produce to the cooperative in bulk through arranged contracts.
 • Custom processing: Growers arrange to have their produce processed at the cooperative for a fee.
 • Cold storage: Growers rent refrigerated or frozen storage space in the facility.
 • Commercial kitchen: Growers rent the licensed commercial kitchen to add value to their farm’s products and be able to sell to more markets.

Question 9

WHAT KINDS OF PRODUCTS WILL COME OUT OF THE COOPERATIVE?

Accepted Answer

We will be lightly processing (e.g., chopping carrots into matchsticks, slicing and deseeding peppers, processing tomatoes) and freezing local produce, then packaging it for sale to larger buyers like schools and hospitals or smaller retail packs (e.g., 12-oz or 2-lb units) for sale to retail outlets such as grocery stores.

We are researching potential products to focus on, including key staple vegetables such as tomatoes, broccoli, bell peppers, carrots, and green beans. We want to accommodate other produce, such as potatoes or squashes, at a future date. Some of that will depend on our growers' ability to scale up their production of those crops, and some will rely on our ability to be prepared to process them.

Question 10

WHAT KIND OF GROWERS AND BUYERS WILL WE BE WORKING WITH?

Accepted Answer

Over the past years, we have actively included several local growers to inform our decision-making and are seeking more. We anticipate all those growers will be willing and able to work with us once we are operational. We hope other growers will also see FarmFED as an opportunity to scale up and reach new markets.

We are also including several local buyers in our planning, including local area schools in Lincoln, Springfield, Pawnee, PORTA/Petersburg, and New Berlin - as well as several regional healthcare institutions and grocery outlets.

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