TYPES OF CO-OPS
Cooperatives are diverse in the services that they provide based on the needs of their members. Members can be farmers, consumers, businesses or organizations. Services can include banking, marketing, housing, childcare, electricity, broadband, and telephone service.
Consumer cooperatives are owned by members who use the co-op to purchase the goods that they need or prefer. By merging member demand, the co-op can achieve economies of scale in pricing and selection of products desired by members. Food cooperatives are an example of a consumer co-op. They can be a solution to communities experiencing access to nutritious food and a solution to food deserts.
Learn more about consumer cooperatives.
Agricultural marketing cooperatives are owned by persons who produce products such as milk, grain, fruit, and vegetables. Cooperatives bargain for price and sell the products on behalf of their members.
Agricultural supply and service cooperatives provide crop inputs (fertilizer, crop protectants, seed) and services (data collection, artificial insemination).
The Farm Credit System is a significant lender to farmers and the cooperatives with which they are members. The Farm Credit System also provides capital for rural infrastructure and rural landowners.
Learn more about agricultural cooperatives.
Marketing Operations of Dairy Cooperatives 2017 (USDA, Research Report 234, 2019)
Agricultural Cooperative Statistics Report 2019, (USDA Service Report 83, 2021)
National Council of Farmer Cooperatives (trade association)
National Milk Producers Federation (trade association)
Businesses or organizations operating in the same sector form a cooperative to secure goods and services needed to run their individual businesses. Joint purchases allow small businesses to purchase merchandise in bulk at price points similar to other big box retailers, resulting in greater market power.
Purchasing or shared services cooperative examples include hospitals, independent retail stores, funeral homes, equipment repair, and educational institutions. Examples include Ace Hardware, Carpet One, National Service Cooperative, and Boards of Cooperative Education Services (BOCES).
Information about purchasing cooperatives:
Worker cooperatives are businesses owned by employees. Ownership allows the worker-members to control the tactical direction of the enterprise and directly benefit from its success. Profit distribution is based on a combination of job title, hours worked, seniority and salary. Worker co-ops provide a means to retain businesses and jobs in local communities.
Organizations and trade associations affiliated with worker cooperatives include the following.
Utility cooperatives were formed in the early 1900s. Corporate electric and telephone companies were installing the infrastructure in densely populated cities. Rural communities were unable to attract such businesses. Local residents banded together to form rural electric and telephone cooperatives. Today these cooperatives provide broadband to further connect rural communities to the larger world. Further, local cooperatives can be member-owners of a cooperative from which they procure energy needs.
Following are additional links to information and trade associations about rural electric and telephone cooperatives.
Persons benefit in similar ways when forming a cooperative to overcome a problem or need shared by all. Multi-stakeholder co-ops are formed by persons who by working together will form a business by which they mutually benefit but in different ways. For example, a co-op could be formed by farmers who are looking for a guaranteed market for their produce, consumers desire to purchase locally produced farm products, and community members desire to support the formation of a local business.
For more information:
A housing cooperative can be any residential type, high rise apartment, single-family home, student housing, senior housing, or manufactured home park. A housing cooperative is formed when people pool resources to own and control the buildings where they live. Members pay a monthly fee to cover operating expenses. The co-op owns the land, the buildings, and any common areas. Each co-op member purchases a share of stock in the cooperative that entitles them to an exclusive right to occupy a specific unit. Examples include: Prospect by Whitby (student housing, Cooperative Village (residential housing), and Lakes Region Manufactured Housing Cooperative (resident-owned community).
For more information:
Credit unions and commercial banks are similar in that they provide a broad range of financial services. Credit unions are created to provide member-owners a place to manage their finances and provide needed services on the best possible terms while banks provide similar services for customers and to generate profits for their shareholders.
The first credit union was established in 1864 in Germany by Friedrich Raiffeisen with the believe that neighbors and friends could achieve a higher standard of living if they had access to common funds. Raiffeisen suggested that all community members pool their capital so that individuals in need of loans could easily access necessary funds. Credit unions began to form in the U.S. in the early 1900s, championed by Edward Filene. Today credit unions have more than 103 million members in the U.S with a culture of putting members’ needs first and helping them achieve personal goals through sound financial practices and advice.