What exactly is a cooperative?
An autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.
What do Cooperatives Provide?
- Recreational Equipment
- Wholesale goods and supplies
- Telephone and telecom services
- Farm production supplies and services
- Farm marketing
Many of the biggest American cooperatives are agricultural enterprises, what is the history of U.S. Agricultural co-ops?
- 1752: Benjamin Franklin forms first successful U.S. co-op
- 1800s: Basis of co-op governance takes shape
- 1810: First formal farmer co-op forms in the U.S.
- 1900: 1,223 farmer co-ops active in the U.S.
- 1922: Congress passes Capper-Volstead Act, which gives limited antitrust immunity to farmer co-ops
What is the state of Agricultural Co-ops Today?
- 2.2 million farmers own the nearly 2,300 farmer cooperatives in the nation.
- $213 billion annually in economic activity and
- Generate 184,000 full-time, part-time and seasonal jobs.
- Total payroll in excess of $8 billion
- A majority of the nation’s farmers belong to one or more cooperative.
Are there any high-profile nonagricultural co-ops?
TrueValue, Ace Hardware, REI, and Best Western are all co-ops.
What are the different types of cooperatives?
1) Marketing Cooperative
- Assist members in maximizing returns from goods they produce
- Handle, process and sell
- Grade, transport, bargain
- Add value
- Research new product development
- Ag, Forestry, Horticulture, Crafts
- Takes members products
- Runs the products through a function of some sort:
- Provides a member benefit – added value by controlling product delivery to market
2) Purchasing Cooperative
- Allow members to gain access to affordable production supplies and goods
- Purchase in bulk to reduce costs and increase purchasing power
- Provide direct ownership of refineries, plants, retail facilities, research facilities
- Hardware, independent grocery stores, restaurants (fast food)
- Allows members to reduce costs of producing products by collecting functions
- Functions include:
- Bulk purchasing
- Delivery systems
- Members benefit from reduced costs, quality control, increased access
3) Service Cooperatives
- Provide needed services:
- Meet many needs
- Custom application of purchased supplies, transport of products, etc.
- Provides utilities, credit, housing, health care, technology, etc.
This article was written by attorney Kim Lowe.