How Does a Farm Co-operative Work?

If you have ever lived in or driven through one of Canada’s many rural, agriculturally supported towns, it is likely that you have come across the manifestation of a co-operative in some form. The most visible signs of a co-operative, particularly to the traveler, are stores (often including gas stations) that are simply called “Co-op”. If you have ever wondered what this means, read on!

The idea of the Co-operative

You have probably heard the old axiom “the rich get richer and the poor get poorer”. People tend to throw ideas like that around as if it were something new, but in fact the tendency for wealth to become concentrated in the hands of a few has always been around. When people insist on working as individuals, they cannot help but water down their potential earning power.

The idea of any co-operative is to start an organization whereby individuals retain power and an equal share of the proceeds of their labour, without the intervention of costly middlemen. There are several different types of co-operatives, but all have the same basic structure.

All are based on democracy and equality; all participating members have the right to a vote and an opinion.

They are legal entities (registered and recognized by governments, with charters much like a business).

Members do not receive dividends on co-operative stock, but rather receive profits (patronage).

The farm co-operative

A farm co-operative is a co-op that is owned by farmers. Usually these farmers produce certain type of product in common (they may farm chickens, grow fruit or wheat, and so on). The different families involved will agree to a certain type of crop and then the co-operative will use its number power to find a market for the goods and sell them.

Often, farm co-operatives find that the ability to work together greatly increases their buying power. Thus, new land acquisitions and mergers are made. One of the most important aspects of the farm co-op is the local store, in which not only is produce sold, but also the co-operative may expand to include the sale of farming necessities with the profit returning to the co-operative.

The idea of the co-operative has allowed many individuals, and farmers in particular, to overcome the specific burdens when it comes to turning a profit on an individual farm. Farm co-operatives have allowed individual farmers to grow and even thrive when more independently minded peers have been forced to shut down.

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