Agri 2301 part I ch 3 structure of cooperatives


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Describes the cooperative structures

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Agri 2301 part I ch 3 structure of cooperatives

  1. 1. <ul><li>Chapter 3: The Structure of Cooperative s </li></ul>
  2. 2. Cooperative Structure Types <ul><li>Financial </li></ul><ul><li>Geographic area served </li></ul><ul><li>Governance or control </li></ul><ul><li>Functions performed </li></ul><ul><li>Other arrangements </li></ul>S 3.1
  3. 3. Financial Structures <ul><li>Cooperatives are incorporated as stock or nonstock organizations. </li></ul><ul><li>Stock Cooperatives </li></ul><ul><li>Issue one share of common stock (voting) as evidence of ownership interest. </li></ul>S 3.2
  4. 4. Financial Structures <ul><li>Cooperatives are incorporated as stock or nonstock organizations. </li></ul><ul><li>Nonstock Cooperatives </li></ul><ul><li>Issue membership certificates as written proof of a right to vote. Many stock and nonstock cooperatives also raise member capital by retaining earnings. </li></ul>S 3.3
  5. 5. Structures by Geographic Territory Served <ul><li>Local Cooperatives </li></ul><ul><li>Operate in relatively small geographic area, typically in a radius of 10 to 30 miles. </li></ul><ul><li>Super Locals </li></ul><ul><li>Operate in two or more counties with several branch facilities. </li></ul><ul><li>Regional Cooperatives </li></ul><ul><li>Large mixed, federated, and centralized cooperatives often serving multi-state areas. </li></ul>S 3.4
  6. 6. Structures by Geographic Territory Served <ul><li>Interregional or National Cooperatives </li></ul><ul><li>Cover two or more regions, which may serve a major portion of the U.S. </li></ul><ul><li>International Cooperatives </li></ul><ul><li>Operating on an international basis with headquarters in the U.S. or other countries. </li></ul>S 3.5
  7. 7. Centralized Structure Cooperative Member Member Member Individuals are members of a cooperative. S 3.6
  8. 8. Federated Structure Cooperative Local Cooperative Member Member Local Cooperative Member Member Individuals are members of local cooperatives which are members of the federated cooperative. RBS, USDA S 3.7
  9. 9. Mixed Structure Cooperative Member Member Local Cooperative Member Member Member Both cooperatives and individuals are members S 3.8
  10. 10. Cooperative Functions <ul><li>Three Core Functions </li></ul><ul><li>Marketing - extend control of members’ products through processing, distribution, and sale </li></ul><ul><li>Purchasing - providing affordable supplies and goods </li></ul><ul><li>Service - provide needed services </li></ul>S 3.9
  11. 11. Marketing Cooperatives <ul><li>Assist members in maximizing returns from goods they produce </li></ul><ul><li>Handle, process, assemble, and sell </li></ul><ul><li>Grade, transport, bargain </li></ul><ul><li>Add value (new generation cooperative) </li></ul><ul><li>Research-new product development </li></ul>S 3.10
  12. 12. Purchasing (Supply) Cooperatives <ul><li>Allow members to gain access to affordable production supplies and goods </li></ul><ul><li>Purchase in bulk to reduce costs and increase purchasing power </li></ul><ul><li>Provide direct ownership of refineries, plants, retail facilities, distribution chains, research facilities </li></ul>S 3.11
  13. 13. Rural Service Cooperatives <ul><li>Provide needed services </li></ul><ul><li>Meet many needs </li></ul><ul><li>Custom application of purchased supplies, transport of product, etc. </li></ul><ul><li>Provide utilities, credit, insurance, housing, health care, technology, etc. </li></ul><ul><li>Other selected services </li></ul>S 3.12
  14. 14. Other Structural Arrangements <ul><li>Subsidiary </li></ul><ul><li>A corporation organized, owned, and controlled either totally, or partially by a parent cooperative </li></ul><ul><li>Marketing Agency in Common </li></ul><ul><li>Organized by two or more marketing cooperatives to market products or provide services for member cooperatives </li></ul>S 3.13
  15. 15. Other Structural Arrangements (continued) <ul><li>Joint Venture </li></ul><ul><li>Association of two or more participants, persons, partnerships, corporations, or cooperatives to carry out a specific economic operation, enterprise, or venture </li></ul><ul><li>Holding Company </li></ul><ul><li>A corporate entity with a controlling ownership in one or more operating companies </li></ul>S 3.14
  16. 16. Other Structural Arrangements (continued) <ul><li>Contract Agent </li></ul><ul><li>A county or community cooperative may organize, owning nothing but contracts, and an agent to handle the goods and keep patronage records turned over by the agent. </li></ul><ul><li>Private Dealers </li></ul><ul><li>As a franchise, the dealer keeps records. If the franchise makes money, patronage refunds are paid to the dealer’s customers. The dealer is paid a commission on sales. </li></ul>S 3.15
  17. 17. New Generation Cooperative <ul><li>A new generation cooperative is a type of marketing cooperative that adds value (e.g., processing) to an agricultural raw product with the purpose of marketing that finished product in order to increase benefits to a finite (closed) membership. </li></ul><ul><li>Membership shares can appreciate/depreciate and can be traded. Members shares are closely associated with contracted delivery rights. </li></ul>S 3.16