Why cooperatives are important to agriculture


Cooperatives enable farmers to own and control, on a democratic basis, business enterprises for procuring their supplies and services (inputs), and marketing their products (outputs).


Why are cooperatives important in agriculture?

  • Farm Forestry and Climate Change.
  • Watershed Development and Climate Change (Ecological Resilience).
  • Nutritional and Economic Security for Tribal and Marginalised Communities (NEST).
  • Sustainable Rural Livelihood Development.
  • Consultancy Programme.
  • Cross Cutting Interventions (Community Institutions, Gender Mainstreaming & Women

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Why are cooperatives important?

What Are Cooperatives Core Principles?

  • Education, training and information
  • Cooperation among cooperative
  • Concern for community

Who played a significant role in agriculture?

The report highlights significant factors that are constantly determining the growth of the Agricultural Lubricant market, untapped opportunities for manufacturers, trends and developments, and other insights across various key segments. Macroeconomic …

What are examples of cooperative businesses?

United States

  • 21st Street Co-op, student housing co-operative in Austin, Texas
  • Ace Hardware, Oak Brook, Illinois
  • Affiliated Foods Inc.
  • Affiliated Foods Midwest Co-op Inc.
  • Affiliated Foods Southwest
  • AgFirst Farm Credit Bank
  • Agribank, FCB
  • Ant Hill Cooperative
  • Arizmendi Bakery, San Francisco, California
  • Associated Food Stores

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What is the importance of cooperatives?

1) They aim to provide goods and services. 2) They aim to eliminate the unnecessary profits of middlemen in trade and commerce. 3) They seek to prevent the exploitation of the weaker members of society. 4) They aim to protect the rights of people both as producers and consumers.

What was the purpose of the farmers cooperatives?

A farmer cooperative can serve one or more functions including but not limited to providing loans to farmers, supplying information pertinent to agricultural production, selling inputs necessary to agricultural production, bargaining on behalf of its members, providing transportation services, and marketing …

How do agricultural cooperatives work?

Agricultural cooperatives, such as Organic Valley, are groups of individual farms that have come together to meet common needs, from inputs like seeds and fertilizer to services like distribution and marketing. Then there’s the consumer cooperative, in which customers (such as CSA members) own and govern the farm.

What are the benefits of belonging to an agricultural cooperative for a farmer?

In modern agriculture, cooperatives provide farmers with a dependable source of reasonably priced supplies, reliable services, and a heightened income. Most benefits experienced by a member of a cooperative are evident from an economic standpoint, but some may also be social depending on the cooperative.

Why does the cooperative form of business make sense for many farmers?

In an agricultural co-op, farmers pool their resources, like money, labor and knowledge, and have greater access to markets, training and financial tools like loans. Working together also reduces their operational costs by buying livestock feed or seeds in bulk at reduced prices.

What are the two most important types of agricultural cooperatives?

There are two primary types of agricultural service cooperatives: supply cooperatives and marketing cooperatives. Supply cooperatives supply their members with inputs for agricultural production, including seeds, fertilizers, fuel, and machinery services.

Why are agricultural cooperatives important?

The role of agricultural cooperatives is shown to help overcome these limitations in order to take advantage of the transaction-cost economizing properties of family farms. This explanation of agricultural cooperatives is sector-specific in the sense that it traces the benefits of cooperative organization back to the organizational attributes …

What is the relationship between social capital and cooperatives?

Purpose Most research into the relationship between social capital and cooperatives takes social capital as the independent variable and the cooperative as the dependent variable, but as yet the authors know little about causality in the other direction. The purpose of this paper is to examine whether the cooperative structure helps to maintain organizational social capital. Design/methodology/approach Semi-structured interviews were conducted with 46 participants from local banks (chairpersons, directors, managers, team leaders and human resources managers). Findings Although the cooperative structure formally remained in place, integration into financial markets and digitalization effectively disembedded the organization from its original social context. The cooperative model can only remain distinctive, in terms of how it relates to its clients, under certain institutional conditions. Practical implications The findings suggest that scaling, in response to changes in the institutional environment, was an important factor in changing the nature of the organization. Originality/value The paper contributes to the understanding of the social dynamics of cooperatives in the field of financial services.

Do worker cooperatives protect employment?

The theoretical and empirical literature reports that worker cooperatives protect employment better than investor-owned firms (IOFs) do , especially during economic downturns. This paper introduces the new hypothesis that not only worker cooperatives but all cooperative types (e.g. worker, producer, consumer, credit) protect employment better than IOFs do because they all satisfy their members’ needs-instead of maximizing shareholder value-by delivering a stable stream of goods and services. A long-standing pattern in needs satisfaction implies constant activity and employment. To substantiate our hypothesis theoretically, we resort to the evolutionary interpretation of the firm as a problem solver and to the literature on organizational resilience. We test the hypothesis using the data released by the Italian Institute of Statistics for all Italian enterprises in the 1996-2008 pre-crisis and 2008-15 crisis periods. Dynamic multifactor partitioning confirms that in Italy, all typologies of cooperatives withstood the crisis better than other business forms did and that cooperatives were affected the least by economic cyclicality and employment loss.

Why do small agro businesses form cooperatives?

The main motivation for small agro-businesses to form or join cooperatives is to combine their efforts and resources, while reducing the costs. In the United States, agricultural cooperatives specialize in marketing, supply, and providing services.

What is the primary goal of a coop?

All members of such a coop are policyholders, and their primary goal is to provide insurance services . Their secondary goal is to generate revenues that will reduce cost of providing the services. As usual, members receive the patronage dividends from the available profit and have an owner-control over the coop.

Why are childcare cooperatives so attractive?

What makes them so attractive is that parents can be members as well, and, consequently, have a say in many decisions . The childcare cooperatives often provide high quality preschool programmes and services.

What are the principles of cooperatives?

According to the US Department of Agriculture, four general traditional principles distinguish cooperatives from any other type of business: 1 Service at cost; 2 Financial obligation and benefits proportional to use; 3 Limited return on equity capital; 4 Democratic control

What is a worker cooperative?

Worker Coops. Members are the workers of their own business. They take part in management, allocate income and net losses, spread risks among each other, and share profit according to their contributions. All around the world, workers form cooperatives to ensure steady income and employment for themselves.

Why is precision important in agriculture?

Precision allows for a more rational use of resources, time, and budget, leading to both higher crop productivity and increased profitability. Agricultural producers have to manage their fields on a regular basis, relying on traditional scouting, conventional weather forecasts, and historical harvest data records.

Why do students form cooperatives?

Students form cooperatives to reduce the cost for basic needs such as food and housing. In fact there are many types of student coops, ranging from housing to childcare, and even bookstores. The additional benefit is experience that the students gain from cooperation.

What is the second challenge of cooperatives?

The second challenge is the need to communicate the value of the cooperative to members and potential members. Cooperative managers and directors appreciate the unique cooperative business model but tend to do a poor job of communicating that message to others who are less familiar with it.

What would happen if there was no coop?

Moreover, without the coop, farmers would engage in expensive activities such as marketing transactions, which are not easily accessible to isolated individuals. As agriculture at the epicentre of U.S. economy, cooperatives play a crucial role for the stability of the industry.

Why is it important to educate members?

First is the need to educate members so that they understand and are involved in decisions on retaining funds, managing equity, distributing profits and rationalizing business operations. This challenge has grown as cooperative memberships have become more diverse and geographically dispersed.

What is the USDA agency that helps cooperatives?

Some other USDA agencies also have programs that help cooperatives, including the Agricultural Marketing Service (AMS ) and the Cooperative State Research, Education and Extension Service which is now known as the National Institute of Food and Agriculture (NIFA).

What is a farmer owned co-op?

Farmer-owned co-ops help producer-members market and process their crops and livestock, and secure needed production supplies and services. Consumer-owned rural utility co-ops provide electrical power and telecommunications services. Financial co-ops provide credit and financial services.

What is a co-op business?

Co-ops are producer- and user-owned businesses that are controlled by — and operate for the benefit of — their members, rather than outside investors. The co-op business model is highly flexible and can address a wide variety of needs.

What is the purpose of USDA Rural Development?

The goal of the Cooperative Programs of USDA Rural Development is to promote understanding and use of the cooperative form of business. This is accomplished through education (including a large library of co-op publications), research and statistics, and technical assistance.

What can farmers do through cooperatives?

Through cooperatives, farmers can own and operate a user- or service-oriented enterprise as contrasted to an investor- or dividend-oriented enterprise.

How do cooperatives encourage production oriented to market requirements?

Basically, cooperatives encourage production oriented to market requirements by developing producer payment plans based upon meeting grade, size, time, and other market specifications . Marketing cooperatives have led in demanding industry grade standards, then using them in offering top quality products to buyers.

What do cooperatives spend their money on?

The cooperatives also spend money for supplies, utilities, insurance, and local taxes. As an example, a cooperative in the Midwest for many years provided grain storage and marketing; petroleum, feed, and fertilizer distribution; and the handling of general supplies.

Why do cooperatives use state experiment stations?

Cooperatives long have relied heavily on State experiment stations for advice as to variety of seed, analysis of fertilizer, and formulation of feed that would best meet the needs of their farmer-members. In marketing farm products, cooperatives’ pricing practices have been based on differentials for quality.

What are some examples of cooperatives?

Department of Agriculture on grading and standardization programs that help assure quality products. For example, Norbest Turkey Growers, Salt Lake City, Utah, was the first commercial firm to adopt U.S. grades and standards for turkeys.

Why are assured sources of supplies important?

Assured Sources of Supplies Cooperatives provide members with a dependable source of reasonably priced supplies, especially during shortages or emergencies.

How much did farm credit cooperatives make in 1978?

Farm credit cooperatives,including Federal Land Bank Associations, Production Credit Associations, and the Federal Land Banks, Intermediate Credit Banks, and Banks for Cooper- atives serving them, had net income of about $369 million in fiscal 1978 and $334 million in fiscal 1977.

Why do developed countries need cooperatives?

Both developing and developed countries depend on cooperatives because they are an empowering model that promotes collaborative social change. While foreign aid and investments drastically help impoverished communities, external remedies are only half the battle. Co-ops provide a grassroots initiative and social structure to address all symptoms …

Why are cooperative structures important?

In developing and transitioning countries that lack access to capital, education, and training, cooperative structures allow communities to pool together their resources to solve problems, identify common goals and target the causes and symptoms of poverty.

What is cooperative organization?

What Are Cooperatives? Cooperatives, or co-ops, are organizations of all types that address a wide range of issues — from food producers and consumers in sub-Saharan Africa, to credit and hybrid cooperatives all around the globe.

What is a co-op?

Co-ops enable farmers to obtain higher returns. Agricultural and fishing cooperatives support its members by providing training, credit and resources. Rural cooperatives, dependant on agriculture, don’t have to look to international companies to grow.

How many co-op businesses fail?

Only 10 percent of co-ops fail while 60 to 80 percent of businesses fail; in fact, cooperatives can revive communities by allocating funds to rising workers with vested interests. Credit co-ops also supply money to start a new business or repair current ones.

What is worker co-op?

Worker co-ops promote collaborative entrepreneurship and economic growth. Cooperatives reduce individual risk in much-needed business ventures and create a culture of shared productivity, decision-making and creative problem-solving.

What is purchasing cooperative?

Purchasing cooperatives, in particular, help businesses compete with large, national retailers. Co-ops not only provide positive outcomes for its members, but also excite local markets as a whole. Multi-purpose and credit co-ops provide small loans to their members.


Types of Cooperative Organizations

Agricultural Cooperatives in The United States

  • According to the University of Californiathere are over 3000 agricultural co-ops in the United States today, with 2.8 million members. They operate according to the principles based on the modified traditional Rochdale Society concepts of 1844, such as “one member, one vote,” and “service at cost”. Out of these principles come all the benefits associated with being a member o…

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How Do Co-Ops Work? Principles of Cooperatives

  • Traditionally, what makes cooperatives so different from any other business enterprise is the principles they are founded on. These principles define and guide the co-ops, ensuring, among other things, democratic self-ownership, tolerance (lack of discrimination), open membership, independence from the government, and equal economic responsibilities distributed among the …

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Advantages of Cooperatives

  • All of the pros and cons of agricultural cooperatives stem directly from these four principles. No benefit or risk should come as a surprise to the co-op members: what you see is what you get. Thanks to the principles of democratic control and proportional use, members of a farming cooperative get access to services, products, materials, and market…

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Disadvantages of Cooperatives

  • The flip side of the independence and democratic control is the equally distributed economic responsibilities of the co-op members. Since no investment can enter the cooperative by outsourcing, loss of profit impacts every member. Every individual patronage has to be reduced to compensate for the loss. Still, members’ support for each other is always a consolation. No one …

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Farming Co-Ops and Eos Crop Monitoring

  • There are many ways how producer cooperatives can benefit from using EOS Crop Monitoring. Our digital agro-platformintegrates satellite imagery, vegetation indices, and weather data, to provide precision-driven agricultural solutions to farmers, traders, insurers, and advisors. Precision allows for a more rational use of resources, time, and budget, leading to both higher cr…

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