Volume Pricing,Coop Marketing May Reduce Waste

Ann Lucius

For communities interested in achieving waste reduction through recycling, a cooperative marketing (CM) and volume-based pricing system may be a viable option, according to the Public Recycling Officials of Pennsylvania (PROP), Kittanning, Pa. In a recently conducted survey of 35 municipalities and 23 counties, PROP discovered that only eight were participating in CM programs in Pennsylvania.

Of the remaining 50, only one was considering the option. Officials' apparent lack of interest stems from the fact that recyclables generally are collected by the private sector, said the organization.

The respondents see no advantages and, therefore, have no incentive to develop CM programs. On the other hand, volume-based pricing is more popular, with 25 respondents operating such a program.

Considering that 32 are not, however, PROP believes there is a need for more education. "Education may be the key component, since [it] ... will help municipal officials realize that cooperative marketing may benefit them," a representative of the organization said. In fact, 85 percent of the respondents believe they will benefit from a coop training program, even if they decide not to implement one.

To meet this need, PROP began training programs throughout Pennsylvania in April 1996. Six workshops deal with volumebased pricing, another three with estab-lishing efficient recycling programs.

Although both are aimed at municipal officials, Sandra Strauss-Moore, PROP's executive director, encourages haulers to attend the variable rates sessions. The goal is to get people to reduce waste. "If [your fees are assessed based on] how much [trash] you generate, maybe you [will] generate less," she said.

The workshops demonstrate the most efficient ways to collect, process and market recyclables. Comingled collection versus separation is another topic PROP examines. Strauss-Moore said the organization suggests participants choose options based on their communities' needs.

Volume-based pricing is one option PROP encourages municipalities to consider. The goal, Strauss-Moore said, is to decrease waste by 25 percent.

CM programs also are recommended. "A number of municipalities have gotten together and contracted services and saved money," Strauss-Moore said. Money was saved through cooperative marketing because everyone agreed on a consistent market price for the contract's length, typically one year.

Strauss-Moore has seen a fair amount of interest in CM and volume-based pricing systems but suspects that many officials don't know how to plan or budget for them.

"We need to do proper education or people won't understand the reason [for starting these programs]," Strauss-Moore stated. However, she added, "Education is dependent on the individual situation. What works in one [area] doesn't necessarily work in another." And, because the Keystone State is made up of diverse areas, "You have to do what works [best] for you," she said.

"Cooperative marketing is going to grow in the future," according to Kay Stevens, a member of the National Cooperative Marketing Network's steering committee and executive director of the Nebraska State Recycling Association, Omaha, Neb.

What keeps it from being a runaway success, Stevens believes, is the politics. Garbage haulers and manufacturers see cooperative marketing as a threat. "They see it as a shift in the power base, and that's what it is." But what cooperative marketing does, she contends, is "professionalize recycling by leveling the playing field."

"When the market is hot, everyone wants in. When it's cold, no one does," Stevens explained. While cooperative marketing may not yield the highest prices, it guarantees that products will move when the market gets cold. By providing written specifications, tracking, reporting and prices, "[cooperative marketing] introduces management procedures," she said. "It creates discipline in a field that has little."

Lack of discipline is a benefit for big processors, Stevens said. Cooperative marketing, on the other hand, allows services to be bid, creates standards and gives haulers and generators more control. The network, said Stevens, recommends that coops form a board to manage the business.

Stevens agrees with Strauss-Moore that those who aren't interested in coops don't quite have a handle on what they are and what they can do, especially small rural communities. "It is absolutely impossible to recycle economically in a rural community without cooping," she stated. "It's too hard and too expensive to run in a spindly town." Although some communities try to make it work on their own, "those that [band] together get the best deal."