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Cooperative Basics

What is a Cooperative?

A cooperative is a business organization that is owned and governed by members who use its products, supplies, or services, rathan than by stockholders. Although cooperatives vary in type, membership size, and services, all were formed to meet the specific objectives of members, and are structured to adapt to member's changing needs. Cooperatives adhere to a set of seven cooperative principles that guide how the business is run and how decisions are made.

Although people have been working together for their mutual benefit throughout human history, the cooperative form of business organization began during the Industrial Revolution. Cooperatives were useful for promoting the interests of the less powerful members of society. Farmers, producers, workers, and consumers found that they could accomplish more collectively than they could individually.

Today, there are nearly 30,000 cooperatives in the United States, with more than 100 million members. In nearly every part of the economy, people have joined together to do business more effectively or to get the products and services they need —from food to agriculture services and equipment to childcare — through cooperatives.

Agriculture Cooperatives

An agriculture cooperative, sometimes refered to as farmer's cooperative, is a cooperative where farmer owners pool their resources to provide other owners with inputs like seed, fertilizers, fuel, and machinery services.

According to the United States Department of Agriculture, the top five agriculture cooperatives in 2016 were:

  1. CHS Inc.
  2. Dairy Farmers of America
  3. Land O' Lakes, Inc.
  4. GROWNMARK, Inc.
  5. Ag Processing, Inc.


The Seven Cooperative Business Principles

Cooperatives around the world operate according to the same core principles and values, adopted by the International Co-operative Alliance (ICA).

Cooperatives are formed based on the cooperative business model that has at the foundation these seven cooperative principles:

  1. Voluntary and Open Membership
  2. Democratic Owner Control
  3. Member Economic Participation
  4. Autonomy and Independence
  5. Education, Training, and Information
  6. Cooperation Among Cooperatives
  7. Concern for Community
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