Crowell Testimony

Summary

Written testimony of Erbin Crowell, Executive Director of the Neighboring Food Co-op Association, submitted to the U.S. Senate Committee on Small Business and Entrepreneurship for a hearing on January 14, 2026 titled Growing the Small Business Agricultural Economy. It describes the association, the National Cooperative Business Association and the New England Farmers Union, and the role of co-operatives in agricultural and rural economies. It states that co-operatives cannot access SBA financing because of the personal guarantee requirement, which it says remains despite legislation passed in 2018. It also discusses business succession for retiring owners through conversion to co-operatives. It recommends alternatives to the personal guarantee, outreach through Small Business Development Centers, and cross-agency support such as the USDA-SBA Memorandum of Understanding.

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Written Testimony of Erbin Crowell, Executive Director of the
            Neighboring Food Co-op Association
   Board Member of the National Cooperative Business Association (NCBA CLUSA)

                Board Member of the New England Farmers Union



                                Submitted to the

          U.S. Senate Committee on Small Business and Entrepreneurship



               “Growing the Small Business Agricultural Economy”




                                January 14, 2026

                       428A Russell Senate Office Building

                             Washington, DC 20002
Introduction
       Chair Ernst, Ranking Member Markey, and members of the committee, thank you for
the opportunity to testify on “Growing the Small Business Agricultural Economy.” We
appreciate your focus on this issue and the opportunity to discuss the role of co-operatives
and credit unions in building thriving local economies and agricultural systems.
        My name is Erbin Crowell and I serve as Executive Director of the Neighboring Food
Co-op Association, an elected board member and past Chair of the National Cooperative
Business Association, and as a board member and past President of the New England
Farmers Union. I have nearly three decades of experience in co-operative business and
food system development, beginning with Equal Exchange, a worker co-op and Fair Trade
Organization based in West Bridgewater, MA. I received my Master of Management: Co-
operatives & Credit Unions from Saint Mary's University in Nova Scotia where I serve as an
adjunct professor with the International Centre for Co-operative Management. I am happy
to call rural Western Massachusetts home.
        As the committee works to craft thoughtful policy to grow the small business
agricultural economy, co-operative businesses should continue to have a significant role in
creating thriving local economies that support their communities. To help the co-operative
ecosystem grow in support of long-term rural economic development, I want to
recommend the following improvements and key supports. First, enable co-ops to access
capital through the Small Business Administration by waiving and crafting alternatives to
the personal guarantee as intended in the Main Street Employee Ownership Act of 2018
and proposed in the Main Street Employee Ownership 2.0 Act. Second, ensure that a
generation of small businesses and family farms, and the services and jobs they provide to
their communities, are preserved through outreach and education on Co-operatives and
Employee Ownership through networks like the Small Business Development Centers. And
third, ensure that key support for cross-agency collaboration and technical assistance
providers is available for co-operative businesses, associations, entrepreneurs, and the
Cooperative Development Organizations that support them through programming like the
State Small Business Credit Initiative, Interagency Working Group on Cooperative
Development, and the USDA-SBA Memorandum of Understanding.
About the Neighboring Food Co-op Association
        The Neighboring Food Co-op Association (NFCA) was founded in 2011 to support
networking, business development and public awareness of food co-ops in the Northeast
United States. In our region of New England and New York State there are about 60 co-
operatively owned grocery stores operating 70 storefronts, locally owned by more than
290,000 people, generating an estimated annual revenue of $625 million, and employing
more than 3,300 people. These businesses range in size from large, multi-storefront
retailers with thousands of members to small rural grocery stores with less than 500. In
addition to offering healthy food and other goods, our co-ops are focused on sustaining
quality jobs, strengthening community food security, and providing markets for local
producers. On average, 30% of sales at our member co-ops are local products, making
these grocery stores engines of the agricultural economy far beyond their scale. The NFCA
also actively partners with producer and worker co-operatives to strengthen the regional
food system and economy, and with the National Cooperative Business Association and
the New England chapter of the National Farmers Union on policy advocacy related to the
agriculture, food security, and co-ops and credit unions.
About the National Cooperative Business Association
       Founded in 1916, the National Cooperative Business Association (NCBA CLUSA)
has served as the primary voice for co-operative businesses across all sectors - including
farmer co-ops, worker or employee-owned co-ops, rural electric co-ops, credit unions,
food co-ops, co-operative lenders, banks and CDFIs, and co-operative development
organizations that provide technical assistance. NCBA CLUSA’s members include not only
individual businesses, but also larger sectoral and regional associations like the NFCA,
National Rural Electric Cooperative Association, U.S. Federation of Worker Co-ops,
National Co+op Grocers, and America’s Credit Unions. With nearly 65,000 establishments
and over 150 million members, co-operatives and credit unions are found in every corner of
the United States. These enterprises range from small, neighborhood businesses to
multibillion-dollar organizations trading in international markets on behalf of their
members. Approximately one in three Americans is a member of at least one co-operative.
About the New England Farmers Union
        The New England Farmers Union (NEFU) is a grassroots organization that works to
protect the social and economic well-being of family farmers throughout the Northeast.
Our membership is as diverse as the agricultural landscape in the Northeast and includes
grain farmers, vegetable growers, fruit growers, livestock farmers, dairy farmers, and co-
operatives. NEFU is a regional chapter of the National Farmers Union (NFU), which
champions family farmers, the vitality of rural communities, and a food system that values
fairness and opportunity for all, for generations to come. Founded in 1902 in Point, TX,
NFU leverages the voices of its 220,000 members in all 50 states to advance its historic
commitment to education, advocacy, and co-operative business.
About Co-operatives in the Agricultural & Rural Economies
       In the United States, one in three Americans is a member of one or more of our
nation’s 65,000 co-operative businesses. This includes the majority of America’s 2 million
farmers and ranchers who are members of more than 1,600 Agricultural and Retail
purchasing co-operatives, 144 million members of Credit Unions, and 42 million
Americans are served by Rural Electric Co-operatives including 92% of persistent poverty
counties1. In 2024, the top 100 co-operatives generated $322 billion in revenue.2
       In the area of retail grocery, National Co+op Grocers (NCG), a business services co-
operative for retail food co-ops throughout the United States, represents 168 food co-ops
operating 234 stores in 40 states with combined annual sales over $2.8 billion and serving

1
    https://impact.coop/media/3gxmtdec/437925-3-_23_ncba-impact-report-2025_wr.pdf
2
    https://www.ncb.coop/hubfs/assets/resources/Co-op%20100%202025%20Report_Web.pdf
over 1.3 million member-owners. On average, each or these co-ops purchases products
from 169 local businesses.
        The Northeast is home to a particular concentration of these enterprises, and the
NFCA reports that there are 60 Food Co-ops across New England and New York State,
locally owned by more than 290,000 members. Together, these community-based
businesses generate an estimated revenue of $625 million and employ about 3,300 people.
In Massachusetts alone, there are 11 Food Co-ops, locally owned by more than 39,000
members, generating over $90 million in revenue, and employing about 500 people.
       Our region is also home to many farmer and fishery co-ops, worker co-ops, housing
co-ops and credit unions, and well as several utility co-operatives. Together, these locally-
rooted businesses form the backbone of our rural economies.
Co-operative Business Resilience
        Co-operative businesses are formed for many reasons — whether to access critical
products and services, address community needs, or access markets, the democratically-
owned and governed structure of a co-operative requires it to be responsive to its member-
owners and in turn the local community. Members are users or patrons of the business —
for example farmers who process and market products together, families that shop at their
local grocery co-op, or the employees of the business — or some combination of these
producers, consumers, and workers. Members directly benefit from the economic success
of business through desired products, services, or employment, as well as discounts. Net
income stays in the community as it is reinvested in the business or returned to members
as a refund, rebate, or patronage distribution.
        Co-operatives are critical to agricultural economies with more than ½ of all U.S.
farmers being members of at least one co-op that provides inputs, processes their
products, and/or supports marketing and distribution. In addition, co-ops are central to
rural infrastructure with over 42 million people in households, farms, businesses and
schools owning and controlling their local electric utility.3 Agricultural co-ops tend to be
multigenerational in their impact, maintaining crucial infrastructure and markets for our
family farmers and their communities. For example, 78 percent of agricultural co-ops are
more than 50 years old, with Iowa, Texas, and California topping the list of states with the
most agricultural co-operatives.4 Without these enterprises, rural people would not be
able to fully participate in the modern economy.
       An example of a large, long-lived co-op in the Northeast is Agri-Mark, which sells
dairy products under the Cabot and MacAdam brands, and was founded in Massachusetts
in 1916 (Now incorporated in DE with offices in MA, VT, and NY). While a large business
marketing more than 300 million gallons of milk each year, the co-operative is owned and
controlee by 700 dairy farm families in all six New England states and New York State.5

3
  https://www.electric.coop/electric-cooperative-fact-sheet
4
  https://www.rd.usda.gov/sites/default/files/SR87-AgriculturalCooperativeStatistics-2023-
UnpublishedReport.pdf
5
  https://www.agrimark.coop/our_co-op/
        There are also examples of smaller farmer co-ops such as the Greenfield Farmers
Co-operative Exchange, founded in 1918 to provide area farmers with feed, seed and other
supplies, the Pioneer Valley Growers Association (1978), which markets a broad range of
fruits and vegetables on a regional level, and Deep Root Organic Co-op (1985) which
enables family farmers to market their produce up and down the eastern seaboard.
       As user-owned enterprises with a priority of meeting member needs and goals over
the long term, co-operatives tend to be more resilient than other types of business models.
This was demonstrated in 2020 when only 20% of worker co-operatives experienced losses
of more than 50% in revenue. In comparison, nearly 30% of traditional small businesses
experienced losses greater than 50% in revenue.
       Similarly, most of the food co-ops in the Northeast U.S. are in rural and underserved
areas and have been in operation for decades, so their impact on food security, jobs, and
markets for local producers is multigenerational. For example, there are several food co-
ops founded during the Great Depression era of the 1930s and 40s, with a second wave
founded in the 1960s and 70s, and more recent start-ups opening over the past decade.
Examples in Massachusetts include Leverett Village Co-op (Opened in 1974), Franklin
Community Co-op (1977), Berkshire Co-op (1981), River Valley Co-op (2008), Old
Creamery Co-op (2012), Quabbin Harvest (2014), Dorchester Food Co-op (2023), and
Assabet Co-op Market (Opened 2023).
       In addition to being long-lived, these businesses are engines of their local
economies. For example, NFCA member co-ops report that an average of 30% of their
sales are local products, providing critical, sustainable, and reliable markets for local
producers. Most of these co-ops are also Supplemental Nutrition Assistance Program or
SNAP retailers, connecting food insecure families with local producers.
Access to Capital for Co-operatives
       Despite the demonstrated success, impact, and resilience of co-operatives and the
long-term economic benefits they provide to rural communities, an ongoing challenge
continues to be access to capital. Due to the shared ownership structure, co-operatives
across sectors are unable to access financing through the U.S. Small Business
Administration (SBA), which requires that businesses provide a personal guarantee to
properly secure the loan. This is clearly untenable for a business structure that may
include hundreds or even thousands of member-owners, often with limited individual
capital resources.
      In 2018, Congress recognized that co-operatives are a prudent investment of
taxpayer dollars with passage of the Bipartisan Main Street Employee Ownership Act,
thanks in no small part to members of this committee. The bill sought to address some of
the more burdensome requirements in SBA lending programs, including the personal
guarantee requirement, for Employee-Owned Businesses and Co-operatives. Despite
passage of the legislation, this requirement is still in place and remains a barrier to growing
co-operative businesses like our food co-ops as well as worker co-ops and small farmer
co-operatives.
       In 2020, an historic 7(a) loan was facilitated through the National Cooperative Bank
(NCB) to a consumer-owned food co-op through alternative mechanisms. However, recent
changes within the program requirements intended to address concerns that did not apply
to co-ops have removed these alternatives, again closing off SBA services to co-operative
enterprises.
Silver Tsunami & Business Succession
       Our rural communities also face a critical challenge in the form of the Silver
Tsunami and small business succession. Co-operative enterprise can be part of the
solution, but its impact is limited by access to appropriate forms of capital and technical
assistance.
       Across the country, 2.9 million small businesses are owned by individuals 55 and
older who are swiftly approaching retirement age. These businesses employ 32 million
people and $6.5 trillion in revenue. In my home state of Massachusetts, there are 69,169
businesses with 775,000,000 employees that generate $161 billion in revenue.[1] In the
Agricultural Industry, the median age of farmers is 58 years old.
        We also know that small businesses across sectors are the backbone for thriving
communities, yet we are in the middle of a watershed moment that could further devastate
Main Street America. According to the U.S. Census Bureau, over the next 10 years 40% of
the U.S. population will reach retirement age and over half of small businesses are owned
by this demographic. While some owners may choose to simply close their business, a
better option – for owners, workers, customers, and the community – is to transfer
ownership of the business to a worker, producer, or consumer co-operative. Converting to
a co-operative business ensures that the owner not only benefits financially from their
years of hard work through the sale of the business, but their legacy is preserved in the form
of its continuing operation. The community also gains through the preservation of
economic infrastructure and the availability of goods and services that would otherwise be
lost.
        For example, Old Creamery Co-op is the only full-service grocery store in the town
of Cummington in rural Western Massachusetts. Somewhat ironically, this food co-op is
housed in what had been one of the many small dairy co-operatives that were critical to the
survival of farmers in our region. It later became a small sole-proprietor grocery store and
community hub for this small town. As the owners considered retirement, they realized
that the best way to preserve their business was to sell it to the people who loved it as
much as they did — the people who shopped and worked there every day. In 2012, the
business was purchased by a co-operative with support from the NFCA and other co-
operative development organizations. Through all of the economic challenges of the past
decade, it remains the only full-service grocery store and deli in town, as well as a critical
outlet for local farmers and artisans.
      Another example from our region is Real Pickles in Greenfield, MA, a worker co-op
that makes and sells fermented foods such as pickles and sauerkraut. When the founders
made the decision to move on to new opportunities, they decided that rather than closing
the business or selling off the brand, they would instead sell it to their employees. So more
than 10 years ago, Real Pickles became a co-operative owned by its workers — the people
most invested in the continued growth and success of the enterprise.
Impacts of Tariffs, Health Insurance Costs & Cuts to Food Security Programs
        More recently, tariffs, increasing health insurance costs, and cuts to USDA services
and food security programs have introduced a high level of instability in rural communities,
contributing to stresses on the small business agricultural economy, and accelerating the
silver tsunami.
       For example, Old Creamery Co-op reports that recent unanticipated cuts to SNAP
benefits had a dramatic impact on this rural retailer, impacting its ability to provide healthy
food to the community. The short notice and subsequent notification that efforts to assist
SNAP recipients could result in permanent ejection from the SNAP vendor program served
to compound the harm and a great deal of time was required to tend to the needs of our
community as we looked for a way to assist neighbors without running afoul of the federal
government. So, beyond the loss of revenue, the negative impacts generated a pervasive
sense of concern, fear, and persecution that absorbed a good deal of bandwidth that would
otherwise have been utilized in the operation of the store.
        Similarly, Franklin Community Co-op shared that they’ve seen a significant
reduction in SNAP sales since the post-COVID reductions in the program from roughly 10%
of total sales to about 6%. This has not only impacted low-income shoppers but has also
reduced sales for local producers. At the same time, tariffs have introduced instability and
dramatic wholesale cost increases in certain categories (e.g., coffee), and employee health
insurance expenses are anticipated to increase dramatically when they renew in the
Spring. Assabet Co-op Market in Maynard, MA, reports that costs on affected products
have already risen 2-5%.
      It should be noted that while these are local examples, we are seeing similar
impacts across our region. This has added urgency to the need for solutions such as the
co-operative business model and change to policies that can support their growth.
SBA Support During the Pandemic
        Like so many small businesses, Real Pickles faced existential challenges during the
COVID-19 pandemic. Fortunately, the co-operative was the recipient of a $500,000 EIDL
loan from SBA that included deferred payments. This not only helped them weather the
economic challenges related to COVID, but enabled them to continue to grow their
business, sustain jobs in the community, and expand their purchases of locally sourced
vegetables. Since the end of the pandemic in 2023, this co-op has made consistent loan
payments while their revenue has grown 25% percent (FY2025).
      Many food co-ops in our region also benefited from this support, enabling them to
maintain jobs, rural infrastructure, and markets for local farmers. For example, Franklin
Community Co-op, a community grocery store co-op with almost 6,000 members and 90
employees operating two retail locations in rural Franklin County, MA, received a $596k PPP
loan, which was extremely helpful during the COVID pandemic. This loan was later forgiven
and business is now planning a major expansion in downtown Greenfield, MA.
        Unfortunately, the lifting of the personal guarantee requirement, which was the
result of advocacy by NCBA CLUSA and other organizations and the bipartisan, bicameral
support of Congress, was temporary, meaning that co-ops like Franklin Community Co-op
and Real Pickles can no longer access these loans without these guarantees, limiting their
potential to grow the agricultural economy in our region.
        As an example of the potential positive impact, an analysis conducted by the NCBA
of SBA data from the Paycheck Protection Program (PPP) found that co-operatives across
sectors, including Agriculture and Food Co-ops, were able to access $700 million in
financing, and 97% are still in business as of 2025 compared to large scale closures in
other sectors. In Massachusetts alone, 60 co-ops received over $10m in assistance from
these programs and 96.6% are still open with over 2,200 jobs preserved, a quarter of those
in rural areas.6
Proposed Policy Changes
         Co-operatives are a tested, impactful, and resilient tool for our rural communities.
By removing overburdensome requirements like the personal guarantee requirement, the
SBA can help ensure that small businesspeople, employees, and farmers and ranchers —
and especially young and beginning farmers — can harness the power of the co-operative
business model to address the urgent challenges that our rural economies are facing,
including inflation, economic uncertainty, increasing health insurance costs, and a wave of
retiring business owners.
       For example, public awareness continues to be a challenge for shared ownership
business models like co-operatives, and other employee-owned structures. The Improving
SBA Engagement Act (Passed out of House Small Business Committee) would require the
SBA to establish a Co-ops and Employee Ownership Promotions Program. This provision
was included in the 2018 Main Street but also not enacted. This would be beneficial both
for co-op conversions as well as start-ups.
       The Neighboring Food Co-op Association and our member co-ops also supported
the Main Street 2.0 Act, introduced in the 118th Congress, which would allow co-ops to
access SBA financing. The first time co-operative businesses were able to access the
services of the SBA in the way programs were intended was during the pandemic era
assistance (PPP and EIDL) and, as mentioned above, the positive outcome for agricultural
economies was clear.
        There’s also an opportunity to provide greater cross-agency collaboration between
USDA Rural Development’s Rural Business Cooperative Service (RBCS) and SBA to
facilitate the exploration of alternative lending requirements for co-operatives that do not
require a personal guarantee as outlined in the Memorandum of Understanding Currently

6
    https://project-equity.org/impact/silver-tsunami/
in place between the USDA RBCS and SBA and included in the bipartisan Coordinated
Support for Rural Small Business Act (cosponsored by Senators Shaheen and Kennedy).7
       In summary, the co-operative business model offers a time-tested, successful, and
impactful tool for addressing the challenges and opportunities of economic change and
instability. There is potential to leverage the proven track record of this business model
through policy improvements made by this committee. By providing appropriate technical
assistance and removing overburdensome requirements like the personal guarantee
requirement, the SBA can help unleash the potential of co-operative enterprise, enabling
people in rural communities to improve access to goods and services, create good local
jobs, and grow the small business agricultural economy.
          Thank you for the opportunity to testify and I look forward to your questions.




7
    https://www.sba.gov/sites/default/files/2023-11/USDA-SBA_MOU_FINAL_Signed-R.pdf#page=2


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