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| No other organizations reflect the American ideals
of democracy and self-help as do cooperatives. Their success,
importance, and beneficial impact on the American economy testify to the
role they play in all of our lives.
Cooperatives incorporate the ideals which drive the most successful
economy in history. Over 100 million Americans own and control more than
47,000 cooperative businesses that provide goods and services in every
economic sector.
Cooperatives provide essential services to the American economy with
benefits for consumers, producers, and small businesses in urban and
rural America. They range in size from small buying clubs to
Fortune 500 companies.
Cooperatives are member owned and democratically controlled
enterprises created and used by their member-owners to provide goods and
services. Members unite in a cooperative to get services otherwise not
available, to get quality supplies at the right time, to have access to
markets, or for other mutually beneficial reasons.
Cooperatives exist not to generate a profit for themselves or outside
investors, as do other businesses, but rather to provide goods and
services at competitive prices. Profits--or net income--is distributed
to members (patrons, as they are called) in the form of patronage
refunds.
Cooperative Principles and Business
Characteristics
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A
cooperative is a user owned and controlled business in which
benefits are distributed according to a member’s use of it. Three
principles distinguish cooperatives from general corporations:
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user-owner |
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user-control |
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user-benefits |
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|
The
user-owner principle means the people who use the cooperative own
and finance the business. Cooperatives are financed by members
purchasing stock, paying membership fees, or accepting self-imposed
assessment on products purchased and/or sold or fees for services.
In some cooperatives, members reinvest their earnings (profits) to
capitalize the business.
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User-control
stems from the majority of the customers being members who are also
responsible for selecting the members of the board of directors. As
representatives of the members, the directors are responsible for
setting policy and providing oversight on all the cooperative’s
business practices.
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User-benefits
provide that the cooperative’s primary purpose is to distribute
benefits to members. Distribution of these benefits is based on
members’ use of the cooperative, not on the amount of capital they
have invested.
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Cooperatives:
an Integral Part of the American Economy
[based on
the 2005 Cooperative Business Survey Summary]
|
There
are 21,367 cooperatives in the six sectors--agriculture, credit
unions, farm credit, electric utilities, grocery, and housing.
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|
These
cooperatives have more than 127.5 million members.
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Cooperatives
in these six sectors employ more than 500,000 Americans with
aggregate payrolls of more than $15 billion annually.
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The
3,140 agriculture co-ops have a gross business volume of more than
$111 billion per year and 2.8 million members. These
cooperatives employ 220,000 people and have assets of $47.5 billion.
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The Farm
Credit System has approximately $125 billion in assets and $96
billion in loans outstanding.
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Credit
unions have $668 billion in assets and more than 86 million members,
who receive billions of dollars in benefits annually from lower loan
rates and higher savings rates. Credit unions have $443.5
billion in loans outstanding.
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Electric
utility co-ops serve 37 million people and their lines cover more
than three-quarters of the U.S. land mass.
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Food and
grocery co-ops generate $33 billion in annual revenues while retail
food co-ops alone pay back an estimate $4 million a year to their
members.
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Housing
cooperatives have combined budgets in excess of $11 billion and make
an estimated $1.2 billion in property improvements each year.
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Nebraska Cooperatives
 Cooperative
businesses in Nebraska operate in marketing, farm supply, and service
areas. The most common types are agricultural marketing and supply
cooperatives.
Marketing cooperatives
engage in a broad range of activities for farmer members including:
bargaining, grading, transporting, processing, distribution, research,
and product development. Marketing cooperatives derive at least half
their business volume from the sale or processing of farm products.
Supply cooperatives provide farmers with production supplies and
products such as fertilizer, agricultural chemicals, fuels and propane,
seeds, feed, and others. Supply cooperatives also provide building
supplies, packaging supplies, farm machinery and equipment, animal
health products, automotive supplies, food, and hardware.
Service cooperatives provide specialized business services related to
agricultural business operations of farmers, ranchers, or cooperatives
such as trucking, storing, drying, artificial insemination, financing,
electric and telephone services, communications, insurance, livestock
marketing, and others.
In addition to the local cooperatives in many Nebraska communities,
regional cooperatives also operate in Nebraska. They provide farm
supplies at wholesale to local cooperatives, marketing and processing
opportunities for crop and livestock production, services to local
cooperatives and direct to owner-users, and other functions. Federated
regional cooperatives are owned by the local cooperatives to which they
provide services and/or farm supplies and marketing opportunities.
Centralized regional cooperatives are owned directly by producers or
their customers, while still other regionals are owned by a combination
of individual customers and local cooperatives.
Regional cooperative members operating in Nebraska include:
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Ag
Processing Inc. |
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Associated
Milk Producers, Inc. |
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CHS
Inc. |
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CoBank |
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Cooperative
Mutual Insurance Company |
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Dairy
Farmers of America, Inc. |
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Farm
Credit Services of America |
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Four
Points Federal Credit Union |
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Growmark,
Inc. |
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Land
O'Lakes |
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Producers
Livestock Marketing Association |
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Nebraska
Rural Radio Association [KRVN/KNEB/KTIC] |
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Facts of Interest
Nebraska cooperatives are a significant factor in the agricultural industry and
the economy of the state. Examples of their impact are as follows:
| As of September 2008, cooperatives are operating 397 branch locations
across the state providing much needed jobs and services in our most rural
communities. |
| As of September 2008, cooperatives employ over 5,000 individuals across
the state. |
| As of September 2008, over 67,000 farmers and ranchers are voting members
of Nebraska cooperatives |
| In 2007, ag supply and marketing cooperatives paid out a collective total
of $44 million in patronage refunds to members. In addition, over
$11 million was paid out in members equity/estate redemption. |
| Nebraska ag supply and marketing cooperatives invested over $97 million in
new facilities and equipment in 2007. |
| These cooperatives paid over $7 million in property taxes and $21 million
in income taxes in 2007. |
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