Ag Cooperatives Basis

What is a Cooperative?

• A person, partnership, or corporation engaged in commerce, manufacturing, or a service; profit seeking enterprise or concern.

• A farm, business, or other organization that is owned and run jointly by its members, who share the profits or benefits.

• A form of business organization in which the owners have shares in a separate legal entity that itself can own assets and borrow money.

• A form of business organization similar to a partnership but offering its owners the advantage of limited financial liability.

Which three are included in the seven guiding principles of a cooperative?

• State Government Regulation

• Democratic Member Control

• Education, Training and Information

• Open and Voluntary Membership

• Cooperation Along Partnerships

Why do farmers join cooperatives?

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What is a Limited liability company (LLC)?

• Cooperative structured to maximize the return members receive for the goods they produce.

• A form of business organization similar to a partnership but offering its owners the advantage of limited financial liability.

• A form of business organization in which the owners have shares in a separate legal entity that itself can own assets and borrow money.

• Cooperatives structured for members to gain access to affordable, quality goods.

What does the cooperative principle: Voluntary and open membership mean?

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What is an example of a utility?

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Two students in your class rent five acres of land for the upcoming growing season. They work together, make joint decisions, contribute equal payments for inputs, and work an equal number of hours for the enterprise. What type of business model is this?

• Corporation

• Sole Proprietorships

• Partnership

• limited liability company (LLC)

Four neighbors own dairy farms of their own. They decided to build a dairy processing facility to process and sell milk and other dairy products. Each neighbor invested a different amount of money to pay for the facility. To protect their farms from financial risks in the dairy processing business, they set up a legal agreement according to state laws. What type of business model is this?

• Corporation

• Sole Proprietorships

• Partnership

• limited liability company (LLC)

Livestock farmers in your community need feed for their animals. Three farmers decide to purchase feed in bulk amounts and resell it to other farmers at higher prices. Over time, the small feed store grows into a complex web of buying and selling feed and other animal equipment for profit. The business becomes more than the three farmers can handle alone. The farmers organize and sell shares in the business. Shareholders elect a board of directors, organize the business to protect the personal assets, and hire additional employees who do not own any shares in the business. Profits are distributed among shareholders based upon the number of shares. What type of business model is this?

• Corporation

• Sole Proprietorships

• Partnership

• limited liability company (LLC)

Purchasing cooperatives provide ag producers inputs, such as:

• Services

• Communication, Water and Electricity

• Chemicals, Fertilizer and Seeds

• Loans, Insurance and Financial Support