U.S. and Canada : cooperative potato members

"Potato growers were growing themselves out of a job," Wada said. Eight out of the last 10 years, Wada said, growers flooded the market and brought prices down. Between September 2004 and June 2005 the glut in potatoes brought prices down to $2.69 for every 100 pounds.

At the same time growers were spending an average of $6 per 100 pounds to grow potatoes. Since the cooperative formed in March 2005, Wada said, it has started long-range forecasting of the potato market and worked with members to eliminate the potato glut by things like reducing the amount of potatoes planted and pledging not to send potatoes to market in the event of an oversupply.

That strategy appears to be working. Between September 2005 and June 2006, potato growers received an average of $6.67 for every 100 pounds of potatoes � a nearly a $4 increase from the the previous year. "It's Economics 101," said Wada, a second-generation Idaho potato farmer from the small southeastern Idaho town of Pingree.

"The only effective method to influence price is to manage the supply." Cooperatives aren't a new concept. They've been used in other agricultural industries since the passage of the Capper-Volstead Act of 1922, which exempted agricultural cooperatives from federal antitrust laws.

Steve Rowe, vice president of legal and public affairs for Darigold Inc., the marketing and processing arm of the Northwest Dairy Association, a cooperative of more than 600 dairy producers in in Washington, Oregon, Idaho, Northern California, and Utah, said the dairy industry formed cooperatives as a necessity to help guarantee a fair price.

Before cooperatives, it wasn't uncommon for buyers to undercut prices to producers because they knew milk was perishable and producers had to find buyers quickly. If a farmer didn't sell, a buyer could go down the road to another producer. Rowe said for the dairy industry cooperatives have made it possible for smaller operations to have the same clout as larger operators because every member has one vote.

"Cooperatives have allowed smaller farmers to survive longer than they would have otherwise," Rowe said. Wada said the idea for a potato cooperative began with the meeting of a small group of Idaho farmers in the summer of 2004.

That fall a meeting about the cooperative drew 600 growers from throughout the Northwest. In November 2004, United Potato Growers of Idaho was formed, followed by the United Potato Growers of America in March 2005. Canada followed suit in February 2006 with the formation of the United Potato Growers of Canada.

Wada said the goal of the cooperative is to maintain prices so growers can reduce debt and start reinvesting in efforts to improve efficiency of their operations to better compete on a global scale.