Cooperative

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  • An enterprise or organization owned by and operated for the benefit of those using its services. In agriculture, such an organization is owned and used by farmers mainly to handle the off-farm part of their businesses: buying farm supplies, marketing their products, furnishing electric and telephone service, and providing business services —at cost. Essential features are democratic control, limited return on capital, and operation at cost, with distribution of financial benefits to individuals in proportion to their use of the services made available by the cooperative (called patronage refunds). In 1997, there were 3,884 farmer cooperatives in the United States. As a variation from the traditional design, so-called "new generation cooperatives" are characterized by limited membership, require substantial investment, and include delivery contracts. Producers are increasingly using this model to create their own value-added business enterprises. The Rural Business-Cooperative Service (RBS) assists in forming new cooperative businesses and improving the operations of existing cooperatives through technical assistance, research, information products. Cooperatives are afforded certain antitrust exemptions by the Capper-Volstead Act.
  • A group of organized consumers or producers that jointly own and operate the means of production or distribution of goods or services for the mutual benefit of its members. Examples include cooperative student-owned and operated bookstores, food stores (health food stores), health cooperatives, housing cooperatives, etc.


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