Introduction to Co-operatives

A co-operative is a member-owned business (at least five shareholders) and a separate legal identity. Participants are expected to share responsibility in running the co-operative and the concepts of sharing, community and democracy are central.

This section of the toolkit introduces you to the co-operative structures and principles, how to register a co-operative, sample documents and policies, a co-operative manual, case studies and the different forms a co-operative can take.

As noted by Farming Together, On the surface, co-operatives might appear like any other business – commercially successful, productive and profitable. What sets them apart and makes them a better way to do business for farmers?

Here are six important differences.

1. 1. Co-operatives bring together indiv
   2. iduals, or businesses, for economic gain. Family farmers can increase their market power by working together and pooling resources for marketing, processing or other activities. Co-operatives can aggregate purchasing power, capital and other resources of their members.
   3. Co-operatives are owned and run by members. The people who benefit from the services of the co-operative are also its owners. As member-owners, they democratically control the enterprise; each member has one vote.

Co-operatives are focused on member benefit, not external shareholder returns. They are able to focus on sustaining their members’ farm businesses in the long term through lower prices, better-quality services and a share in profits.

1. Co-operatives develop their members. Co-operatives don’t just pool capital for marketing or other operations but also provide non-financial benefits to their members, including education and leadership opportunities. Co-operatives can pool information relevant to production and help members learn about other parts of the supply chain they work in.
2. Co-operatives are a self-help solution to remaining co
   mpetitive. Co-operatives allow their members to keep their individual businesses competitive without relying on government or other stakeholders.
3. Co-operatives are an internationally recognised business model. There are agricultural and other co-operatives all around the world that adhere to the International Co-operative Alliance’s Values and Principles.