Chris Aarhus on Co-op History, Challenges, and the Shift from Landlines to Broadband: In a recent interview, Farm Director KC Sheperd sat down with Chris Aarhus to discuss the rich history of cooperatives in the United States and the critical role they continue to play in rural communities. From their tumultuous beginnings in the 19th century to their modern adaptation into broadband and finance, Aarhus highlighted how the “co-op mindset” remains essential for farmer control and community survival.
Born Out of Necessity According to Aarhus, the cooperative movement in the Midwest and Plains states was born from frustration. In the 1800s, farmers often felt exploited by large private businesses and sought a way to level the playing field.
“Farmers are looking for a way to stop these bad business practices and how can they take control for themselves,” Aarhus explained.
He noted that early attempts were difficult, with many struggles occurring until around 1890. The turning point came when farmers adopted a specific business philosophy: the cooperative had to be community-minded and focused on business profitability first to ensure longevity.
“Farmers adapt those practices and cooperatives really flourish,” Aarhus said. “And today we see them everywhere from elevators to grocery stores, credit unions, mutual insurance companies.”
The Oklahoma Connection Aarhus pointed out that the history of co-ops in Oklahoma is unique, deeply influenced by the movement’s rise out of Texas. Early Oklahoma co-ops often centered around cotton gins, but they faced challenges with business structures that allowed private investors to push farmers out. This led to the adoption of the “one person, one vote” principle in early Oklahoma law to protect member control.
“It was just a fascinating story there with farmers trying to figure out what is the perfect business model for Oklahoma farmers to be able to really take control,” Aarhus noted.
Adapting to Modern Needs Cooperatives have survived for over a century by evolving. Aarhus cited telephone cooperatives as a prime example of this adaptability. As landlines became less relevant, these organizations pivoted to become essential providers of high-speed internet in rural areas.
“Today we see telephone co-ops exist largely as broadband providers,” Aarhus said. “That’s a great example of how co-ops are able to change their business model to serve their members and their members’ needs.”
He also highlighted the expansion of agricultural co-ops into agronomy—selling seed and chemicals—to stay competitive and keep business local.
The Challenge of Governance Despite their success, modern cooperatives face a significant hurdle: board engagement. Aarhus emphasized that for a co-op to survive, it needs active, educated board members who perform their due diligence. He warned that complacency can be fatal for these organizations.
“If a co-op board doesn’t survive and something happens to the co-op and it’s gone, it’s not coming back. And then that philosophy is gone from that community,” Aarhus warned.
The Future of Cooperatives Looking ahead, Aarhus sees the cooperative model expanding into new sectors where consumers feel underserved, such as consumer finance. He believes the core driver of cooperatives remains the same today as it was in the 1890s: filling a void where people are not being treated fairly.
“Where is the next place that people are going to feel like they’re not being treated properly?” Aarhus asked. “That is always a great place for the co-op model.”
