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Cooperatives & Cooperative Farming

What Is Cooperative Farming?

Introduction to Faith Gilbert’s short book Cooperative Farming: Frameworks for Working Together, NE SARE, 2014. 54pp. Full text available as a free download from SARE.

What is a “cooperative”? What is “cooperative farming”? #

The word “cooperative” has two meanings: both a type of business and an attitude that can be broadly applied. A cooperative (n) is a specific type of business that is formed expressly to provide benefit to its members, such as:

  • a producer co-op that is created to provide cost savings and or marketing services to a group of producers
  • a worker cooperative created to provide stable, fair employment for its workers.

A cooperative business is defined by three major standards:

  • It is owned by its members, those participating in the business, not by outside shareholders or investors.
  • It is governed by its members. Each member of the business has a vote in major business decisions and in electing representatives or officers.
  • It exists for member benefit, not profit for outside shareholders. Any profits are distributed equitably among members.

In addition, cooperatives operate according to internationally recognized core principles and values, which include operating as an autonomous organization, investing in the training and education of their members, and supporting other cooperatives and the community.

While cooperatives have an important role in farming, not all collaborative efforts meet those criteria. Buying a seed drill with neighboring farms, sharing a delivery van to a nearby city, or even running a farm together need not be classified or operated as a cooperative in order to provide fair and mutual benefit to those involved. Cooperative farming explores a variety of frameworks to work together as a group.

Here, we focus on the agreements and processes that make collaboration function.

Cooperative: 1. (adj) involving mutual assistance in working toward a common goal. 2. (n) a farm, business, or other organization that is owned and run jointly by its members, who share the profits or benefits.

Cooperative farming: creating shared farming ventures to address common challenges and provide mutual benefit.

Why Cooperate? #

Economy of Scale: Cooperation allows little farms to do what big farms can do, like buy inputs at bulk rates, increase volume to open new markets, and lower the per-use cost of equipment. Together, producers can lower costs, access needed services or facilities, or generate more income.

People power: Allied producers can negotiate for better prices, diffuse risk, and share knowledge, skills, and labor.

Access to Capital: Farmers can pool capital to invest in a shared business, tool or asset, and can increase their borrowing power with combined collateral and experience.

Quality of Life: Allied farmers can arrange for time off, child care, or extra hands when needed. Shared responsibilities, whether in selling, producing, or maintaining shared resources, means a lighter load for overworked operators.

Continuity: Group entities can serve as longstanding vehicles to transition land, resources, and businesses among producers. Operating under an overarching entity, an individual farmer has more flexibility to retire or relocate and transition use to the next farmer.