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Cooperatives: What are they? 
Where are they? Who cares?
Women Managing the Farm Conference
Manhattan, KS
February 5th, 2015
Brian C. Briggeman
Associate Professor and 
Director of the Arthur Capper Cooperative Center
Arthur Capper Cooperative Center
Our purpose is to determine, develop and deliver research 
and education for the cooperative community.
Cooperative 
Scholarships
Cooperative 
Research
Cooperative Education 
Programs
And, so much more…
www.accc.ksu.edu
What is a cooperative?
• A type of corporation. A business!
• A cooperative is a business owned and 
democratically controlled by the people who use 
its services and whose benefits are derived and 
distributed equitably on the basis of use.
Co‐op
1. Maximize Member 
Benefits
2. Users can own and 
control
3. Patronage
4. ROI (high or low?)
Cooperative vs. Investor Owned Firm (IOF)
IOF
1. Maximize Profit or 
Shareholder Wealth
2. Users typically don’t 
own and control
3. Dividend
4. ROI (high or low?)
Co‐op Speak
Patrons
Members
Roles
1. Customer
2. Patron
3. Owners
4. Control
Function
1. Profit generation
2. Profit distribution 
(patronage)
3. Investment (stock)
4. Vote
Unique Advantages but also some Unique Challenges
Cooperative members are…
Cooperative Principles
Benefits
are derived and distributed
on the basis of use.
Principle #1: User‐benefit
• Distribution of profits 
called patronage
• Better prices
• Access to markets
• Access to services
Cooperatives provide benefits through…
The users of the co-op
own it.
Principle #2: User‐owner
• Members are ‘active’ because they provide the 
funds for labor, materials and investment.
• By being active, members hope to get more 
benefits because they both patronize and invest
in the co‐op business.
Cooperative members are ‘active’ owners
The users of the co-op
democratically control it.
Principle #3: User‐control
• By working together, active members exchange 
information to enhance benefits.
• Some members are more ‘active’ because they 
serve on the board of directors.
– Strategic direction of the co‐op and CEO’s supervisor
Cooperative members are ‘active’ in control
Value 
proposition of 
cooperatives
Three broad categories of the value proposition.
1. The co‐op is an extension of the farm
2. Investment in rural America
3. The Power of Patronage
The co‐op is an extension of the farm…up and down 
the supply chain.
Input 
Producer
Retailer
Output 
Producer 
(Farmer)
Elevator Processor End User
Co‐op
Co‐op
What do farmers gain?
Cooperatives provide a large investment in rural 
America.
The Power of Patronage
Patronage is an 
investment. That is, a 
grower gets equity in an 
agribusiness just by doing 
business with the co‐op.
• Cooperatives are a prominent part of the U.S. 
economy, especially in rural America
• 3 principles define cooperatives
– User‐benefit
– User‐owner
– User‐control
• Cooperatives are very important agribusinesses!
– Benefit to ‘active’ members
– An investment in rural America
Cooperatives are important to agriculture
Thank you.
Women Managing the Farm Conference
Manhattan, KS
February 5th, 2015
Brian C. Briggeman
Associate Professor and 
Director of the Arthur Capper Cooperative Center

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Cooperatives: Who are they? What are they? Why are they important to my farming operation?