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Understanding the Role of Farmer-Controlled Cooperatives in the Food System, Slides of Biology

The concept of cooperatives in the us food system, discussing their definition, importance, and performance compared to investor-owned firms. Theoretical and empirical perspectives are provided, along with challenges and responses. Quotes from h.e. Babcock and linda kravitz add context.

Typology: Slides

2012/2013

Uploaded on 01/29/2013

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Cooperatives in the Food System
What is a cooperative?
How important are co-ops in the US food
system?
Do co-ops perform differently than investor-
owned firms?
Theoretical perspectives
Empirical perspectives
Challenges facing cooperatives and their
responses
Perspectives on Cooperatives
"I regard a farmer-owned, farmer-controlled cooperative as a
legal, practical means by which a group of self-selected, selfish
capitalists seek to improve their individual economic positions in
a competitive society." -- H.E. Babcock, "Cooperatives as the
Pacesetters in Agriculture." Journal of Farm Economics 17, no.
1 (1935): 153-56.
"The process of cooperation is as important as the result of
cooperation, and to strip farmers of the former will ultimately
strip them of the latter." -- Linda Kravitz. Who's Minding the
Co-op? A Report on Farmer Control of Farmer Cooperatives.
Washington: Agribusiness Accountability Project, 1974.
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Cooperatives in the Food System

„ What is a cooperative? „ How important are co-ops in the US food system? „ Do co-ops perform differently than investor- owned firms? „ Theoretical perspectives „ Empirical perspectives „ Challenges facing cooperatives and their responses

Perspectives on Cooperatives

„ "I regard a farmer-owned, farmer-controlled cooperative as alegal, practical means by which a group of self-selected, selfish capitalists seek to improve their individual economic positions in a competitive society." -- H.E. Babcock, "Cooperatives as thePacesetters in Agriculture." Journal of Farm Economics 17, no. 1 (1935): 153-56.

„ "The process of cooperation is as important as the result of cooperation, and to strip farmers of the former will ultimatelystrip them of the latter." -- Linda Kravitz. Who's Minding the Co-op? A Report on Farmer Control of Farmer Cooperatives. Washington: Agribusiness Accountability Project, 1974.

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Key Characteristics of Cooperatives

„ A form of horizontal integration to get

benefits of vertical coordination

„ Patrons as residual claimants

„ Service at cost

„ Returns in proportion to patronage

„ Democratic control

Data on US Agricultural Cooperatives

Source: USDA, Rural

Development, Cooperative

Services

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Do co-ops perform differently

than investor-owned firms?

„ Theoretical perspectives

„ Residual claimancy and: „ Pro-competitive effects „ Management control „ Raising capital and the “horizon problem” „ Can cooperatives “unduly enhance” prices?

„ Empirical perspectives

New Generation Cooperatives

  1. Focus on value-added marketing
  2. Appreciable and transferable delivery rights
  3. Up-front equity capital investment requirement
  4. Defined (closed) memberships
  5. Pooling and marketing agreements with strong penalties for non-compliance.