Abstract
HE cooperative form of business organization has deep historical roots in the economy. The cooperative dairy association movement began in New York in the mid-1800s as a response to the monopsony power of privately held milk-processing plants.1 It was perceived that a producer cooperative had the ability to produce processed cheese from its members' raw milk at a lower per-unit cost than would have been possible by contracting with a geographically isolated, private, for-profit firm. Modern refrigerated transportation has diminished monopsony power. In modern times, the cooperative form of business has been consciously nurtured as a matter of public policy. The tax laws of the United States exempt cooperatives that meet certain requirements from payment of income taxes.2 Certain other pecuniary advantages are available to agricultural cooperatives. Loans are available to cooperatives at a belowmarket rate of interest. The collective knowledge of the Department of
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