What is a cooperative?
Cooperatives — and Calcot is a cooperative — are a type of business organization.
Calcot is a producer-owned cooperative, organized under the Capper-Volstead Act of 1922, which made farmer-owned cooperatives legal in the U.S.
Until the passage of the act, many business people feared cooperatives would allow monopolies to form, but in reality, cooperatives were and are an important part of the financial structure for many of America’s family-owned farms.
Cooperatives differ from corporations in intent and structure: whereas a corporation is set up to make a profit to return to shareholders—who may or may not have a vested interest in the success of the business, other than being an investor in the stock—a cooperative is set up to benefit only those who use its products and services, and is therefore owned by those who invest in it.
In other words, a cooperative is a business that spreads financial risk and rewards amongst its owners.
Cooperatives operate under seven principles:
- Voluntary and open membership
- Democratic member control
- Members’ economic participation
- Autonomy and independence
- Education, training
- Cooperation among cooperatives
- Concern for community
Voluntary and open membership
Cooperatives are voluntary organizations, open to all able to use their services, and willing to accept membership responsibilities, without gender, social, racial, political or religious discrimination
Democratic member control
Cooperatives are democratic organizations, controlled by their members, who actively participate in setting policies and making decisions. Elected representatives are fully accountable to the membership. In primary cooperatives (such as Calcot), members have equal voting rights (one member, one vote).
Members’ economic participation
Members contribute equitably to, and democratically control the capital of the cooperative. At least part of that capital is the common property of the cooperative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all
Autonomy and independence
Cooperatives are autonomous, self-help organizations controlled by their members. If the cooperative enters into agreements with other organizations, including governments, or raise capital from external sources, it is done so on terms that ensure democratic control by the members to maintain their cooperative autonomy.
Cooperatives provide education and training for members, elected representatives, managers
Cooperation among cooperatives
Cooperatives serve members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures.
Concern for community
While focusing on members needs, cooperatives work for the sustainable development of their
For complete information on cooperative business types, principles and values, check out the National Cooperative Business Association website, www.ncba.coop
Information on farmer-owned cooperatives can be found at the National Council of Farmer Cooperatives website, www.ncfc.org
Visit the voice of California’s agricultural cooperatives, the Ag Council of California, at www.agcouncil.org.