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Cooperatives: What are they? 
Where are they? Who cares?
Women Managing the Farm Conference
Manhattan, KS
February 5th, 20...
Arthur Capper Cooperative Center
Our purpose is to determine, develop and deliver research 
and education for the cooperat...
What is a cooperative?
• A type of corporation. A business!
• A cooperative is a business owned and 
democratically contro...
Co‐op
1. Maximize Member 
Benefits
2. Users can own and 
control
3. Patronage
4. ROI (high or low?)
Cooperative vs. Invest...
Co‐op Speak
Patrons
Members
Roles
1. Customer
2. Patron
3. Owners
4. Control
Function
1. Profit generation
2. Profit distribution 
(patronage)
3. Inve...
Cooperative Principles
Benefits
are derived and distributed
on the basis of use.
Principle #1: User‐benefit
• Distribution of profits 
called patronage
• Better prices
• Access to markets
• Access to services
Cooperatives provide ...
The users of the co-op
own it.
Principle #2: User‐owner
• Members are ‘active’ because they provide the 
funds for labor, materials and investment.
• By being active, members hop...
The users of the co-op
democratically control it.
Principle #3: User‐control
• By working together, active members exchange 
information to enhance benefits.
• Some members are more ‘active’ because ...
Value 
proposition of 
cooperatives
Three broad categories of the value proposition.
1. The co‐op is an extension of the farm
2. Investment in rural America
3...
The co‐op is an extension of the farm…up and down 
the supply chain.
Input 
Producer
Retailer
Output 
Producer 
(Farmer)
E...
Cooperatives provide a large investment in rural 
America.
The Power of Patronage
Patronage is an 
investment. That is, a 
grower gets equity in an 
agribusiness just by doing 
busi...
• Cooperatives are a prominent part of the U.S. 
economy, especially in rural America
• 3 principles define cooperatives
–...
Thank you.
Women Managing the Farm Conference
Manhattan, KS
February 5th, 2015
Brian C. Briggeman
Associate Professor and ...
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Cooperatives: Who are they? What are they? Why are they important to my farming operation?

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Brian Briggeman, Department of Agricultural Economics, Kansas State University - Presentation at the 2015 Women Managing the Farm Conference

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Cooperatives: Who are they? What are they? Why are they important to my farming operation?

  1. 1. Cooperatives: What are they?  Where are they? Who cares? Women Managing the Farm Conference Manhattan, KS February 5th, 2015 Brian C. Briggeman Associate Professor and  Director of the Arthur Capper Cooperative Center
  2. 2. Arthur Capper Cooperative Center Our purpose is to determine, develop and deliver research  and education for the cooperative community. Cooperative  Scholarships Cooperative  Research Cooperative Education  Programs And, so much more… www.accc.ksu.edu
  3. 3. What is a cooperative? • A type of corporation. A business! • A cooperative is a business owned and  democratically controlled by the people who use  its services and whose benefits are derived and  distributed equitably on the basis of use.
  4. 4. Co‐op 1. Maximize Member  Benefits 2. Users can own and  control 3. Patronage 4. ROI (high or low?) Cooperative vs. Investor Owned Firm (IOF) IOF 1. Maximize Profit or  Shareholder Wealth 2. Users typically don’t  own and control 3. Dividend 4. ROI (high or low?)
  5. 5. Co‐op Speak Patrons Members
  6. 6. Roles 1. Customer 2. Patron 3. Owners 4. Control Function 1. Profit generation 2. Profit distribution  (patronage) 3. Investment (stock) 4. Vote Unique Advantages but also some Unique Challenges Cooperative members are…
  7. 7. Cooperative Principles
  8. 8. Benefits are derived and distributed on the basis of use. Principle #1: User‐benefit
  9. 9. • Distribution of profits  called patronage • Better prices • Access to markets • Access to services Cooperatives provide benefits through…
  10. 10. The users of the co-op own it. Principle #2: User‐owner
  11. 11. • Members are ‘active’ because they provide the  funds for labor, materials and investment. • By being active, members hope to get more  benefits because they both patronize and invest in the co‐op business. Cooperative members are ‘active’ owners
  12. 12. The users of the co-op democratically control it. Principle #3: User‐control
  13. 13. • By working together, active members exchange  information to enhance benefits. • Some members are more ‘active’ because they  serve on the board of directors. – Strategic direction of the co‐op and CEO’s supervisor Cooperative members are ‘active’ in control
  14. 14. Value  proposition of  cooperatives
  15. 15. Three broad categories of the value proposition. 1. The co‐op is an extension of the farm 2. Investment in rural America 3. The Power of Patronage
  16. 16. The co‐op is an extension of the farm…up and down  the supply chain. Input  Producer Retailer Output  Producer  (Farmer) Elevator Processor End User Co‐op Co‐op What do farmers gain?
  17. 17. Cooperatives provide a large investment in rural  America.
  18. 18. The Power of Patronage Patronage is an  investment. That is, a  grower gets equity in an  agribusiness just by doing  business with the co‐op.
  19. 19. • Cooperatives are a prominent part of the U.S.  economy, especially in rural America • 3 principles define cooperatives – User‐benefit – User‐owner – User‐control • Cooperatives are very important agribusinesses! – Benefit to ‘active’ members – An investment in rural America Cooperatives are important to agriculture
  20. 20. Thank you. Women Managing the Farm Conference Manhattan, KS February 5th, 2015 Brian C. Briggeman Associate Professor and  Director of the Arthur Capper Cooperative Center

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