Agricultural co-operatives in the United States: Origin and current status

Abstract

Agricultural co-operatives are a unique form of enterprise which has been very successful in the United States. They are farmer owned organisations that provide services and products for members on a cost basis. These organisations emerged from early co-operative efforts of pioneers and settlers and eventually evolved into modern business associations. The number of co-operatives expanded rapidly from 1890 into the 1930s as the co-operative movement became popular and received the support of large farm organisations and other agrarian interests. The Capper-Volstead Act of 1922 and other legislation provided additional support for co-operatives. Many associations were formed during the 1920s and 1930s as farmers attempted to counteract the effects of the great depression. After World War II co-operatives began to expand the size and scope of their operations through economic integration, mergers and consolidations. They adopted improved business practices and became more efficient. The number of co-operatives began to decline in the 1960s, but business volume continued to increase. In the late 1970s, agricultural related co-operatives generated a total business volume of over US$100 billion which represented about 30% of cash farm receipts, 20% of farm supplies and 34% of the farm real estate debt outstanding in the United States. In the last two decades co-operatives have been faced with a number of emerging issues and problems: a renewal of antitrust issues, the growth of bargaining associations, the development of export markets, new methods of financing larger capital investment requirements, the adoption of new technology and the modernisation of facilities, the need for a broader service mix and improved member relations. These issues provide both problems and challenges for agricultural co-operatives in the years ahead.