Agricultural educators play a critical role in educating the next generation of leader and entrepreneurs about the agriculture industry. Incorporating agriculture cooperatives and the cooperative business model into your lesson plans allows students to think critically, understand democracy, and build community.
The National Association of Agricultural Educators is working in partnership with the CHS Foundation to offer engaging and inquiry based instructional materials that have everything you need to deliver quality instruction on the cooperative business model, the impact of cooperatives on the community and cooperative career opportunities. In early 2020 a third module will be available that provides a real-life mock cooperative experience for your students. The modules are yours to use and come with everything you need; materials list, teacher notes, handouts, presentation tools, assessments and more.
Five basic business structures exist for organizing a business. Each structure has advantages and disadvantages regarding decision making, risk, and profit distribution. A sole proprietorship is the simplest structure allowing individual decision-making while exposing the owner to the most risk. Corporate structures lower individual risk but can reduce an individual’s voice about business operations. The cooperative structure is a type of corporation that allows individuals with similar business goals who want an equal say to form a business with democratic control.
All cooperatives follow a set of principles making them different from other types of businesses. People joining a cooperative become both members and owners of the cooperative. Each member can voice their opinion on how the cooperative should operate through an election process. The more a member patronizes the cooperative, the more they benefit in the form of business earnings returned to them. The cooperative membership principle makes it different from any other type of business. Cooperative members are committed to using the cooperative business. In return for their patronage, they receive returns based upon how much they use the cooperative. Unlike a corporation, all members have equal shares and voting rights for making decisions.
People create cooperative businesses for the purposes of buying, selling, and marketing products and services. Marketing cooperatives help producers compete with larger businesses and sell their products. People who want to lower their costs of buying products may join a purchasing cooperative to increase their buying power. Services include financial, housing, utility, and agricultural. Service cooperatives vary in size and type of services provided. Many agricultural cooperatives provide marketing, purchasing, and service benefits for members.
During this module, students identify local cooperatives in their community. Next, they compare how cooperatives follow the seven guiding cooperative principles. Then students determine how they can form a cooperative to solve a business problem. Finally, students analyze the benefits and responsibilities of cooperative membership by interviewing a local cooperative member.
Agricultural cooperatives connect farmers to international markets by providing supply chain services that include marketing, distributing, and processing. These services allow a farmer to transport products from the farm to consumers who may be local or found halfway around the world. Locally, cooperatives provide consulting services to farmers so they can better manage their crops. Other local services include storage and processing facilities for the farmer’s commodities. International services include transportation of agricultural goods connecting a farmer to new markets, increasing the demand and price a farmer receives for his or her goods.
Cooperatives found in small communities appeal to potential employees interested in living in rural areas. Cooperative businesses have career opportunities similar to corporations. Those interested in an agricultural career can find jobs in career pathways, such as plant production, animal production, natural resource conservation, and agricultural mechanics at cooperatives located in communities around the country. Beyond the wide array of careers in rural communities, cooperatives also arrange philanthropic giving and community service for quality of life improvements in the community.
Just like any other business, a cooperative needs to have a business plan. The business plan starts with an idea of what product or service the business will be selling. Founding members of a cooperative business need to determine how their cooperative will meet the seven guiding principles. In addition, a cooperative needs to analyze the market to ensure there is a demand for their business.
The financial portion of a cooperative business will include projected yearly income and expenses to operate the business. Cooperatives consider a member's financial contribution, patronage, and dividends when planning their budget. Additional expenses needed to meet the seven principles of a cooperative include member education and community contributions.
Cooperatives depend on teams of individuals with specific roles. Owner-members elect a board of directors to make the major decisions for a cooperative. A board of directors consists of officers and committees. One major responsibility of the board of directors is to hire a manager who will handle the day to day business operations.
During this module, students will compile three major components of a cooperative business plan; a business description, a financial planning sheet, and a description of personnel involved in the cooperative. Students will then present their idea for a cooperative at the end of the module.
The National Association of Agricultural Educators are working in partnership with the CHS Foundation to offer engaging and informational workshop curriculum focused on agricultural cooperative basics and careers related to agricultural cooperatives. NAAE would like to thank Mr. Wes Crawford, an agricultural educator and NAAE member at Sutherlin High School in Sutherlin, Oregon for creating these materials.
In this 60-minute workshop, participants will be able to define what a cooperative is, explain advantages to the cooperative business model, differentiate between the types of cooperatives, and be able to explain specific cooperatives and related career opportunities. A completely list of needed materials and handouts are included in the Facilitator Notes and Handouts document.
In this 60-minute workshop, participants will be able to describe their own interest in potential career fields, explain the opportunities for careers in agricultural cooperatives, and articulate the value of cooperatives in serving the agricultural industry. A complete list of needed materials and handouts are included in the Facilitator Notes and Handouts document.