Benefits of a Cooperative

What is a Cooperative?


Cooperatives are businesses owned and controlled by the people who use them. Cooperatives differ from other businesses because they are member owned and operate for the mutual benefit of members. Like other businesses, most cooperatives are incorporated under State law.

Why Are Cooperatives Organized?

What Are Farmer Cooperatives?

In agriculture, there are nearly 3,000 farmer cooperatives whose members include a majority of our nation's 2 million farmers and ranchers. These include:

Farmer cooperatives exist for the mutual benefit of their farmer members with earnings returned on a patronage basis. For example (these are not valid figures for Valley Wide Cooperative ), a farmer member who accounts for 10 percent of the volume of corn delivered to the cooperative would receive 10 percent of the net earnings derived from the handling, processing, marketing and sale of that corn or related products. Such patronage dividends help boost the income of farmers directly or by reducing the effective cost of the goods and services provided.

Farmer cooperatives also help contribute in another way to the economic well being of local communities, particularly in rural areas where they are an important source of jobs and payrolls - accounting for as many as 300,000 jobs and a total payroll of over $8 billion.

Being farmer-owned and controlled, farmer cooperatives are governed by a board of directors elected by their farmer members - generally based on one member one vote rather than on the basis of shares or percent ownership as in other types of businesses. This provides for a unique accountability.

Farmer cooperatives are farmers.