Understanding Cooperatives

The cooperative corporation is becoming a popular method of organizing business in the '90s. Days of the basic agricultural cooperative have given way to the more nontraditional agricultural and nonagricultural cooperatives. Today, one in every four individuals is involved in some form of cooperative business-HMOs, credit unions, insurance, baby sitting, etc.1 Sadly, many people don't understand the basic principles on which cooperative business organizations are based.

"Understanding Cooperatives" is a new instructor's curriculum guide. It's designed to be used with 4-H youth as well as adults interested in the cooperative form of doing business. The 10-unit curriculum guide covers all aspects of the cooperative business.

The first five units include basic elements pertaining to cooperatives:

• Unit I: "The American Business Enterprise System." Focuses on how businesses are organized in America.
• Unit II: "What Is a Cooperative?" Explains the functions, service types, and advantages of rural cooperatives.
• Unit III: "Cooperative Business History." Emphasizes the historical background of cooperatives.
• Unit IV: "Cooperative Business Principles." Identifies basic concepts that make cooperatives different from other business forms.
• Unit V: "The Scope of Cooperatives." Explores the variety of agricultural and nonagricultural cooperatives, the service and value to communities.

Units six through 10 are directed toward the advanced 4-H member, cooperative employee, or adult participants who might be interested in forming a cooperative corporation. These units include:

• Unit VI: "The Structure of Cooperatives." Teaches the classification of cooperatives by financial, membership, geographic, and function structures.
• Unit VII: "Economic Justification, Financing, and Taxation for Cooperatives." Special emphasis placed on how cash flows through a business, different financing methods, and taxation.
• Unit VIII: "Responsibilities, Management, and Control in the Cooperative." Details the rights and responsibilities of cooperative members as a member/patron or elected official.
• Unit IX: "Careers in Cooperatives." Provides the opportunity to explore job types available with cooperatives beyond current knowledge.
• Unit X: "Mini Cooperative Business Experience." Applying knowledge from the nine previous units, members will organize, operate, and close out a cooperative.
• Independent Study: "CO-OP ED" and "CO-OP ED FINANCIAL." For gaining additional individual expertise in the area of farmer cooperatives, including financial business decisions.

This new curriculum can be an effective tool for Extension personnel to use with many ages and levels of individuals. The lesson plan format and content are developed with the Extension professional and 4-H volunteer in mind. Each unit can be altered to fit the various time allotment for meetings within the Extension education format.

CO-OP ED is a self-study program for the individual who wants to go beyond the prepared units for even more indepth information about cooperatives. CO-OP ED FINANCIAL is designed for the member who wants to establish a set of criteria, then experiment with the decisions necessary to minimize costs and maximize returns in the cooperative business environment. A complete set of five videotapes and many referenced circular materials are also available to enhance the basic educational curriculum.

To obtain more information on the instructor's guide package, "Understanding Cooperatives," contact Galen W. Rapp, Agricultural Cooperative Service, USDA, P. O. Box 96576, Washington, D.C. 20090-6576.

1. David W. Cobia, ed., Cooperatives in Agriculture (Englewood Cliffs, New Jersey: Prentice Hall, Inc., 1989).

This article is online at http://www.joe.org/joe/1991spring/tt2.html.

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