Ever since the introduction of the farm tractor in the 1920’s, farmers have suffered the economic abuse of the giant oil companies. But, unlike their urban consumer counterparts, they fought back by forming farmer-owned oil cooperatives.
Starting with cooperatively owned filling stations and bulk storage plants, they gradually introduced the cooperative idea into oil-product distribution, refineries and production wells.
SELLING to their consumers (the farmer-owners) at cost, these oil cooperatives were impelled to become more self-sufficient right back to the wellhead.
This was necessary because the major oil companies too often moved either to restrict their supply, disrupt their schedule or overcharge them.
Farmers and farm movements have produced most of this country’s political and economic innovations in the past century.
But what is more remarkable is that city folk know so little about these populist innovations and, when they do, make so little effort adapt them to urban and suburban consumer problems.
For years, farmers have reduced their fuel costs by increasing the bargaining power of their cooperatives and by avoiding many middlemen. These cooperatives presently own about 2,000 oil-producing wells, eight refineries, pipelines and many wholesale and retail outlets in this country for gasoline and other oil products.
THEY PROVIDE nearly 2 percent of all refined petroleum. Overall, farm coops supply 30 percent of the oil for the nation’s farms, including about 50 percent for those in the mid-west farmbelt.
However, they are still dependent on the major oil companies for more than 60 percent of their crude oil. Oil cooperatives have felt this reliance so acutely during the energy tumult of the past two years that they have decided to strengthen their production and refining base of operations.
Led by such men as Sigved Sampson, president of Midland Cooperatives in Minneapolis, the International Energy Cooperatives was formed in March 1974 to deal directly with the oil-producing countries.
With 19 major farm supply coops as members, the IEC believes that such arrangements could expand to include refinery projects and agricultural developments.
Meanwhile, back in Washington, there is virtually no discussion of oil cooperatives, involving in addition Consumers in cities and suburbs, as one solution to enhance competition and consumer justice in the energy industry.
The 50-year record of farm-based oil coops has proven that extensive consumer savings and their recirculation in rural and small town economies is no pipe dream. Patronage refunds in many millions of dollars to some 2 million oil coop customers in this country are a fact. So is the prevention of many phony scarcities by such activities as coop-produced fertilizers from natural gas.
MEMBERS of Congress who spend endless hours participating in hearings on energy problems would benefit from finding out more about oil cooperatives and their great potential.
The legislators, along with interested readers, need only write to the Cooperative League of the USA, 1828 L St. NW, Washington, D.C. 2006, for information.