The Economic Culture of U.S. Agricultural Cooperatives

Abstract

Two contesting philosophies that shaped cooperative culture during the past 70 years are explored, Edwin Nourse's populist concept of cooperatives as a "competitive yardstick" restoring competition to the marketplace on behalf of farmers and Aaron Sapiro's philosophy that cooperatives should be businesslike, purely economic and preferably large‐scale organizations for maximum effectiveness bargaining with processors. As cooperatives expanded over the 20th century, the tension between these two philosophies set into motion cultural constraints on cooperative growth that came to a crisis point with the industrialization of the pork industry. This brought rapprochement with businesses cooperatives had formerly defined themselves in opposition to, resulting in a new phase of cooperative identity, the "valueadded" cooperative.

Trust, Social Capital, and the Coordination of Relationships Between the Members of Cooperatives: A Comparison Between Member-Focused Cooperatives and Third-Party-Focused Cooperatives

“…With greater size, cooperatives are threatened by "degeneration" towards either hierarchical organizations or corporate enterprises (Purtschert 20 1990;Valentinov 2004), implying changes in the organizational culture as outlined by Hogeland (2006) for US agricultural cooperatives. Specifically, due to the increasing difficulties regarding democratic decision making and the generation of returns on investment in social capital, members rather confine themselves to acting as investors or customers (Somerville 2007).…”

Money and Mission: Moving Food with Value and Values

“…Our research also shows that informal farmer networks seem to be particularly appropriate for marketing a range of diverse products, like fruits and vegetables, and that the more formal cooperative structures may be more appropriate when dealing with single uniform products (Hogeland, 2006). When a diverse range of commodities is marketed through a cooperative, each with different costs of production, processing requirements, and prices, it is difficult to fairly allocate costs across commodities, and hence across producers (Sexton, 1986).…”

“…Historically, agricultural cooperatives as formalized membership structures have played a major role in coordinating the production, aggregation, and marketing of their members' products (Gray, 2009). While many agricultural cooperatives continue to function successfully in this capacity, new models of producer coordination are emerging that offer alternatives to the more formalized and restrictive structure of cooperatives (Hogeland, 2006). Several of the distribution models in our study have shown how establishing informal farmer networks can be an effective strategy for meeting the rapidly changing demands of the local food market.…”

Governance costs and the problems of large traditional co-operatives

“…Holmström (1999) presents a corporate governance explanation, claiming that capital market mechanisms are distorted in traditional co-operatives. Hogeland (2006Hogeland ( , 2015 suggests that cultural changes have taken place, creating a chasm between farmers and agro-food processing firms, including co-operatives. Nilsson et al (2012) claim that the amount of social capital perceived by farmer-members shrinks as co-operatives expand.…”