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14-September-2008 18:38:38 - Agricultural cooperative An agicultural cooperative, also known as a farmers' co-op, is a cooperative where farmers pool their resources in certain areas of activity. A broad typology of agricultural cooperatives distinguishes between agricultural service cooperatives, which provide various services to their individually farming members, and agricultural production cooperatives, where production resources land, machinery are pooled and members farm jointly.1 Agricultural production cooperatives are relatively rare in the world, and known examples are limited to collective farms in former socialist countries and the kibbutzim in Israel. Worker coperatives provide an example of production cooperatives outside agriculture. The default meaning of agricultural cooperative in English is usually an agricultural service cooperative, which is the numerically dominant form in the world. There are two primary types of agricultural service cooperatives, supply cooperative and marketing cooperative. Supply cooperatives supply their members with inputs for agricultural production, including seeds, fertilizers, fuel, and machinery services. Marketing cooperatives are established by farmers to undertake transformation, packaging, distribution, and marketing of farm products both crop and livestock. Farmers also widely rely on cr cooperatives as a source of financing for both working capital and investments. Contents 1 Why farmers form cooperatives 2 Supply cooperatives 3 Marketing cooperatives 3.1 Examples 3.1.1 Canada 3.1.2 United States 4 Origins 5 References 6 See also Why farmers form cooperatives Cooperatives as a form of business organization are distinct from the more common investor-owned firms IOFs.12 Both are organized as corporations, but IOFs pursue profit maximization objectives, whereas cooperatives strive to maximize the benefits they generate for their members which usually involves zero-profit operation. Agricultural cooperatives are therefore created in situations where farmers cannot obtain essential services from IOFs because the provision of these services is judged to be unprofitable by the IOFs, or when IOFs provide the services at disadvantageous terms to the farmers i.e., the services are available, but the profit-motivated prices are too high for the farmers. The former situations are characterized in economic theory as market failure or missing services motive. The latter drive the creation of cooperatives as a competitive yardstick or as a means of allowing farmers to build countervailing market power to oppose the IOFs.1 The concept of competitive yardstick implies that farmers, faced with unsatisfactory performance by IOFs, may form a cooperative firm whose purpose is to force the IOFs, through competition, to improve their service to farmers.2 A practical motivation for the creation of agricultural cooperatives is sometimes described as overcoming the curse of smallness. A cooperative, being an association of a large number of small farmers, acts as a large business entity in the market, reaping the significant advantages of economies of scale that are not available to its members individually. Three typical examples are a machinery pool, a marketing cooperative, and a cr union. A family farm may be too small to justify the purchase of a tractor or another piece of farm machinery for its own use; a machinery pool is a cooperative that purchases the necessary equipment for the joint use of all its members as needed. A small farm does not always have the means of transportation necessary for delivering its produce to the market, or else the small volume of its production may put it in an unfavorable negotiating position with respect to intermediaries and wholesalers; a cooperative will act as an integrator, collecting the output of its small members and delivering it in large aggregated quantities downstream through the marketing channels. A small farmer may be charged relatively high interest rates by commercial banks, which are mindful of high transaction costs on small loans, or may be refused cr altogether due to lack of collateral; a farmers' cr union will be able to raise loan funds at advantageous rates from commercial banks because of its large associative size and will then distribute loans to its members on the strength of mutual or peer-pressure guarantees for repayment. Supply cooperatives Agricultural supply cooperatives are cooperatives that supply farmers with required inputs for agricultural production including seeds, fertilizers, fuel, and services. Please help improve this section by expanding it. Further information might be found on the talk page or at requests for expansion. June 2008 Marketing cooperatives Agricultural marketing cooperatives are cooperative businesses owned by farmers, to undertake transformation, packaging, distribution, and marketing of farm products both crop and livestock. Examples Canada In Canada, the most important cooperatives of this kind were the wheat pools. These farmer-owned cooperatives bought and transported grain throughout Western Canada. They replaced the earlier privately and often foreign-owned grain buyers and came to dominate the market in the post-war period. By the 1990s, most had demutualized privatized, and several mergers occurred. Now all the former wheat pools are part of the Viterra corporation. Former wheat pools include: Alberta Wheat Pool Manitoba Pool Elevators Saskatchewan Wheat Pool United Grain Growers United States American Legend Cooperative mink fur Blackglama brand Blue Diamond Growers almonds Cabot Creamery dairy Cotton Incorporated cotton Diamond of California nuts, formerly a cooperative Dairylea Cooperative Inc. Dairy, formerly Dairymen's League Florida's Natural Growers citrus fruit Gay Lea Foods Co-operative Limited dairy Land O'Lakes dairy and farm supply Ocean Spray cranberries and citrus fruit Riceland Foods rice, soybeans, and wheat Sunkist Growers, Incorporated citrus fruit Sun-Maid raisins Sunsweet Growers Incorporated dried fruit, especially prunes Tillamook County Creamery Association dairy Lone Star Milk Producers dairy Origins The first agricultural cooperatives were created in Europe in the second half of the nineteenth century. They spread later to North America and the other continents. They have become one of the tools of agricultural development in emerging countries. Also related are farmer's cr unions and mutual farm insurance societies. They were created in the same periods, with the initial purpose to offer farm loans. Some became universal banks such as Crédit Agricole or Rabobank. References ^ a b c Cobia, David, or, Cooperatives in Agriculture, Prentice-Hall, Englewood Cliffs, NJ 1989, p. 50. ^ a b John M. Staatz, Farmers' incentives to take collective action via cooperatives: A transaction-cost approach, in: Cooperative Theory: New Approaches, ed. J.S. Royer, Washington, DC: USDA ACS Service Report 18 July 1987, pp. 87-107. See also Winemaking cooperative v d e Cooperatives Types of Cooperatives Agricultural cooperative · Building cooperative · Cr union · Consumers' cooperative · Cooperative banking · Cooperative federation · Cooperative union · Cooperative wholesale society · Food cooperative · Housing cooperative · Mutual insurance · Retailers' cooperative · Social cooperative · Utility cooperative · Worker cooperative Identity The Rochdale Principles · ICA Statement on the Cooperative Identity Political and Economic Theories Cooperative federalism · Distributism · Owenism · Mutualism · Socialism · Social enterprise · Socially responsible investing Key Theorists Robert Owen · William King · The Rochdale Pioneers · G. D. H. Cole · Charles Gide · Beatrice Webb · Friedrich Raiffeisen · David Griffiths Organizations List of cooperatives · List of cooperative federations · List of worker cooperatives · International Co-operative Alliance · Co-operativesUK · Co-operative Party Retrieved from http://en..org/wiki/Agricultural_cooperative Categories: Agricultural labor | Production and manufacturing | Agricultural cooperatives | Rural community development | Agricultural marketing organizations | Agricultural economics | Agriculture in societyHidden categories: Articles to be expanded since June 2008 | All articles to be expanded Views Article Discussion this page History Personal tools Log in / create account Navigation Main page Contents Featured content Current events Random article Search Go Search Interaction Community portal Recent changes Contact Donate to Help Toolbox What links here Related changes Upload file Special pages Printable version Permanent link Cite this page Languages Français This page was last modified on 6 September 2008, at 14:0
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