On 20 January 2025, the Trump administration imposed a 90-day freeze on all US foreign development assistance; the following month, secretary of state Marco Rubio announced the dismantling of the United States Agency for International Development (USAID), leading to the termination of thousands of aid delivery contracts. The repercussions of this are far-reaching – with its full effect yet to be felt – with severe implications for 65 years’ worth of collaboration between the co-op movement and the US federal government.
Co-ops have been a part of USAID’s work since it was created in 1961 by president Kennedy. The sector’s involvement is down to senator Hubert Humphrey (later vice president to Lyndon B. Johnson), who introduced an amendment to Kennedy’s Foreign Assistance Act focusing economic development on co-operatives. Humphrey and other Midwesterners in Congress had seen what agriculture, utilities and finance co-ops had done for their states and wondered if this could work in the development sphere.
The newly created USAID called the co-op movement in as a delivery partner, creating the Co-operative Development Program (CDP). The Overseas Cooperative Development Council (OCDC), was established in 1969 as a federation to co-ordinate its implementation.
OCDC, whose members include co-op apex NCBA Clusa, the World Council of Credit Unions (Woccu) and other sector representatives, was hit hard by the 2025 USAID cuts, losing most of its funding streams overnight. It closed its office and laid off its 11 staff, with only CEO Paul Hazen remaining in post.
The future looked bleak, but Hazen – and the wider US co-op movement – kept up their lobbying and last month it was announced the CDP would be included in the Fiscal 2026 Appropriations Bill to the tune of $13,875,000.
This is a 20% cut, but still a win when many other programmes received a larger cut or were eliminated. For Hazen, this speaks to the longstanding bipartisan appeal of co-ops.
“Over the years it’s been difficult to work with different administrations, where Democrats and Republicans will have different priorities,” he says, “but we’ve been successful in navigating those various priorities.
“I like to say that we can make an argument for both groups. For conservative Republicans, co-operatives are businesses that allow people to pull themselves up by the bootstraps. And for progressive Democrats, we’re about businesses that are inclusive, that make sure everybody has an opportunity. That has worked well until this last year [as] the Trump administration is not listening to any argument about the value of economic development.”
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What they do listen to is arguments about business, trade and national security – and OCDC has the data to back these up.
“During the first Obama administration, we were meeting with one of the political appointees at USAID, and we were telling her how great co-operatives are,” says Hazen. “She stopped us, and said, ‘I don’t disbelieve you, but where’s your data?’ We didn’t have that, so we created the international co-operative research group at OCDC to do research on the impacts that our co-operatives have had in the countries we’ve worked in.
This research found that in countries that had received US co-op development assistance, co-op members were better off financially, less likely to be poor, had a better sense of community, and were less likely to migrate.
“That resonated,” says Hazen, “and I think that’s why we were successful in restoring the funding for the CDP.”
But he warns there is still a lot of work to do in getting the funds released – and then finding a way to spend them, with much of the infrastructure already dismantled.
“Woccu did some fundraising with their members, and they’ve been able to continue their programmes,” says Hazen, “but most of the others have been completely shut down, and several of the organisations have decided that, even if funding is returned, they’re not going to be implementing the programme any longer, because the US government is just not a reliable partner.
“Our personnel have lost their jobs, and many had to change careers. Even if funding is fully restored, it’ll take us years to rebuild.”
This situation with USAID has repercussions beyond the co-op movement – reaching into every corner of development.
“Most of the infrastructure around the world that is used to distribute food – like warehouses, transportation, shipping – has been funded and maintained by USAID,” says Hazen. “So if another country wants to donate food to a third country, they would use USAID infrastructure. That’s all going to go away, and so it’s going to severely impact the ability of the global community to provide assistance in a variety of ways. We’ve started to see this in healthcare already, where people can’t get the medicines they need.”
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Meanwhile, he says, the Trump administration is choosing countries for support based on its other foreign policy objectives. “We work in any country, because every country has co-operatives. The only thing that we don’t do, and this will be a challenge for us, is engage with the country’s government. Co-operatives get a bad reputation when they’re seen as a tool in the government.”
Hazen says the trick is to work with the administration on its own terms. “I like to give examples, especially to younger staffers in Congress, telling them most of the coffee they drink comes from co-operatives around the world. So here’s a programme that is facilitating coffee production around the world, that benefits the US. So we’ll be talking a lot about trade, a lot about national security. We’ll position it as around trade, around security issues, around migration, things like that.”
Before joining the OCDC, Hazen was CEO of NCBA Clusa, and sat on the board of the International Cooperative Alliance.
“ICA board meetings are hosted in different countries,” he says, “and I would often be invited to visit with a government official and explain the balance that we have in the USA between government support and government involvement in co-operatives. You want good laws that allow co-operatives to be independent and viable businesses. You want to make sure there’s education and training available. You want to make sure that there’s finance and credit available. So those are things that the government can do to enable co-operatives to succeed, versus controlling co-operatives.”
This is a challenge at home too, adds Hazen, pointing to Obamacare, which created consumer-owned health co-ops but included a provision barring them from using any of their government funding for marketing. “That’s an example of bad regulation. Around 20 large consumer owned healthcare co-operatives were organised. They all failed, because that provision did not allow them to go out and market their services.”
Hazen’s focus now is to re-engage with the State Department to start finding a way to implement the CDP. “It’s clear we have support in Congress. The president signed this funding bill, so now they own it, and we will be working to try to get them to actually implement the programme. If that happens, then it’s rebuilding our capacity for development, and it’s going to be different.
“I think everybody understands that we’re going to have to work smarter and better, probably not going to have as many organisations implementing programmes, and try to be more efficient.”
In terms of future administrations, Hazen thinks there will be a refocus on international development. “As I said, it’ll be different. But I think there’s a real realisation that this diminished role for the US is not good for our own country.
“It’s fine to take a step back and say, you know, what’s working, what’s not working, and let’s focus on those things that are working. And so I’m hopeful that in the next administration, that the US will step up and retake a place of leadership in the world, but one from a standpoint of mutual respect for others around the world.”
More pressing is the need to lobby on the 2027 budget. “We had bipartisan support in the Congress for co-operatives,” says Hazen, “so I have faith that we can revive the United States’ long commitment to international co-operative development.”
