About Cooperatives
What is a Cooperative?
A cooperative is a member-owned and member controlled business that operates for the benefit of its members. Unlike traditional businesses, cooperatives prioritize shared ownership, equitable decision-making, and community well-being. They exist in various industries, including agriculture, finance, utilities, and retail, following the seven cooperative principles.
Missouri's Cooperative Landscape
Missouri's cooperative landscape is diverse and influential, spanning multiple sectors that play a vital role in the state's economy and communities. Agriculture, a cornerstone of Missouri’s economy, has long benefited from cooperatives that support farmers and agribusinesses by providing access to supplies, marketing services, and shared resources—fostering stability and growth in the industry. Additionally, Missouri is home to numerous electric cooperatives that deliver essential services to rural areas, ensuring reliable and affordable electricity for communities across the state. These member-owned organizations exemplify the principles of mutual benefit, strengthening both the economy and the well-being of Missouri residents.
Who Owns a Cooperative?
A cooperative is owned by its members—the people who use its products or services. These members can be individuals, businesses, or organizations, depending on the type of co-op.
Unlike other businesses that are owned by outside investors or shareholders, a cooperative is owned and controlled by the people it serves. Each member typically has one vote, regardless of how much they use the co-op, making ownership equal and member-focused rather than profit-driven.
How do Cooperatives Make Money?
Cooperatives earn money by selling goods or services, just like any other business. The key difference lies in how the profits are used. After covering operating expenses, any remaining earnings—known as net margins—are either reinvested in the cooperative to improve services or returned to members based on their level of participation. These member payouts are called patronage refunds or dividends.
Who Makes Decisions in a Cooperative?
In a cooperative, decisions are made by the members who own and use the co-op. Each member typically has one vote, regardless of how much they use the cooperative or invest in it. Members elect a board of directors from within the membership to provide oversight and make key policy and strategic decisions. The board then hires and works with a manager or CEO to handle day-to-day operations. This democratic structure ensures that the cooperative is guided by the needs and interests of its members—not outside investors.
What are the Benefits of a Cooperative?
Cooperatives offer a range of benefits that set them apart from traditional businesses. Because they are owned and controlled by their members, co-ops prioritize service over profit, often resulting in better prices, higher quality service, and a stronger local focus. Members may receive patronage refunds—a share of the co-op’s profits—based on how much they use the co-op. Cooperatives also support local economies, create jobs, and reinvest in their communities. Additionally, because members have a voice in decision-making, co-ops foster greater transparency, accountability, and trust among those they serve.
Can Anyone Join a Cooperative?
Whether anyone can join a cooperative depends on the type of co-op and its membership requirements. Many cooperatives are open to anyone who uses their services, such as electric co-ops, while others—like producer, supply, or financial cooperatives—may have more specific eligibility criteria (e.g., being a farmer, employee, or living in a certain area). In general, cooperatives are inclusive and community-oriented, welcoming members who support their mission and are willing to participate in ownership and decision-making. Each co-op sets its own rules for membership, which are usually outlined in its bylaws.
Where Can I Find More About Cooperatives?
For a deeper understanding of the cooperative business model, including resources, news, and industry insights, we recommend visiting the National Council of Farmer Cooperatives at ncfc.org and America’s Electric Cooperatives at electric.coop. Both sites offer valuable information about the role and impact of cooperatives across the U.S.
