Cooperative

A cooperative (also co-operative or co-op) is an association of persons who join together to carry on an economic activity of mutual benefit, in an egalitarian fashion.

Types of cooperatives

Housing cooperative

A housing cooperative is a legal mechanism for ownership of housing where residents either own shares (share capital co-op) or have membership and occupancy rights in a not-for-profit continuing co-operative (non-share capital co-op).

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Retailers' cooperative

A retailers' cooperative (often known as a secondary or marketing co-operative in the UK) is an organization which employs economies of scale on behalf of its members to get discounts from manufacturers and to pool marketing. It is common for locally-owned grocery stores, hardware stores and pharmacies. In this case the members of the cooperative are businesses rather than individuals.

Related Topics:
Retailers' cooperative - Economies of scale - Grocery store - Hardware store - Pharmacies

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The well-known Best Western hotel chain is actually a giant cooperative, although it now prefers to call itself a "nonprofit membership association." It gave up on the "cooperative" label after the courts kept insisting on calling it a franchisor despite its nonprofit status.

Related Topics:
Best Western - Franchisor

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Utility cooperative

A utility cooperative is a public utility that is owned by its customers (an arrangement also known as a consumer cooperative). In the US, many such cooperatives were formed to provide rural electrical and telephone service as part of the New Deal. See Rural Utilities Service.

Related Topics:
Utility cooperative - Public utility - Consumer cooperative - New Deal - Rural Utilities Service

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Worker cooperative

A worker cooperative is a cooperative that is wholly owned and democratically controlled by its "worker-owners". There are no outside, or consumer owners, in a worker's cooperative - only the workers own shares of the business. Membership is not compulsory for employees, and only employees can become members. Probably the best known example of worker co-operation is the Mondragón Cooperative Corporation (MCC) in the Basque Country.

Related Topics:
Worker cooperative - Mondragón Cooperative Corporation

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Unions are often unnecessary in worker cooperatives because the workers have direct control over the management and ownership of the business - they are negotiating with themselves. Some worker cooperatives still choose to become members of local unions to demonstrate their support for the labor movement and to working conditions that have resulted from years of struggle. Worker cooperatives that join unions often benefit from the trade that comes their way from the community of union members and those who support unions for political reasons.

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The United States Federation of Worker Cooperatives is the organization in the US representing worker cooperative interests nationally. There are local networks and federations throughout the US in the San Fransisco Bay area, the Twin Cities, Portland Oregon, and Boston.

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The 'new wave' of worker cooperatives that took off in Britain in the mid-70s created the Industrial Common Ownership Movement (ICOM) as their federation. The sector peaked at around 2,000 enterprises, and in 2001 ICOM merged with the Co-operative Union (which was the federal body for consumer cooperatives) to create Co-operatives UK, thus reunifying the cooperative sector.

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There are examples of "hybrid" co-ops in which workers and consumers both have membership in a co-op, but the types of membership are differentiated, sometimes into districts of the cooperative, often each district having a set amount of decision making power and profit distribution. Hybrid co-ops are also referred to as multi-stakeholder cooperatives.

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Social cooperative

A particularly successful form of multi-stakeholder cooperative is the Italian "social cooperative", of which some 7,000 exist. A "type A" social cooperative brings together providers and beneficiaries of a social service as members. A "type B" social cooperative brings together permanent workers and previously unemployed people who wish to integrate into the labour market.

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Social co-operatives are legally defined as follows:

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• the objective is the general benefit of the community and the social integration of citizens
• type A co-operatives provide health, social or educational services
• those of type B integrate disadvantaged people into the labour market. The categories of disadvantage they target may include physical and mental disability, drug and alcohol addiction, developmental disorders and problems with the law. They do not include other factors of disadvantage such as race, sexual orientation or abuse
• various categories of stakeholder may become members, including paid employees, beneficiaries, volunteers (up to 50% of members), financial investors and public institutions. In type B co-operatives at least 30% of the members must be from the disadvantaged target groups
• the co-operative has legal personality and limited liability
• voting is one person one vote
• no more than 80% of profits may be distributed, interest is limited to the bond rate and dissolution is altruistic (assets may not be distributed)

A good estimate of the current size of the social co-operative sector in Italy is given by updating the official ISTAT figures from the end of 2001 by an annual growth rate of 10% (assumed by the Direzione Generale per gli Ente Cooperativi). This gives totals of 7,100 social co-operatives, with 267,000 members, 223,000 paid employees, 31,000 volunteers and 24,000 disadvantaged people undergoing integration. Combined turnover is around 5 billion euro. The co-operatives break into three types: 59% type A (social and health services), 33% type B (work integration) and 8% mixed. The average size is 30 workers.

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Consumers' cooperative

The term cooperative also applies to businesses owned by their customers. Employees can also generally become members. Members vote on major decisions, and elect the board of directors from amongst their own number.

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A well known example in the US is the REI (Recreational Equipment Incorporated) co-op.

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One of the world's largest consumer co-operatives is the Co-operative Group in the United Kingdom, which has a variety of retail and financial services. In reality the Co-operative Group is actually something of a hybrid, having both corporate (other cooperative businesses) and individual members.

Related Topics:
Co-operative Group - United Kingdom

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Japan has a very large and well developed consumer co-operative movement with over 14 million members; retail co-ops alone had a combined turnover of 2,519 billion yen (24,189 thousand US Dollars) in 2003/4. (Japanese Consumers' Co-operative Union., 2003). As well as retail co-ops there are medical, housing, insurance co-ops alongside institutional (workplace based) co-ops, co-ops for school teachers and university based co-ops.

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Around 1 in 5 of all Japanese households belongs to a local retail co-op and 90% of all co-op members are women. (Takamura, 1995). Nearly 6 million households belong to one of the 1,788,000 Han groups (Japanese Consumers' Co-operative Union., 2003). These consist of a group five to ten members in a neighbourhood who place a combined weekly order which is then delivered by truck the following week. A particular stength of Japanese consumer co-ops in recent years has been the growth of community supported agriculture where fresh produce is sent direct to consumers from producers without going through the market.

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Agricultural cooperative

In the US

Farmers often maintain marketing cooperatives, some of which are government-sponsored, which promote and may actually distribute specific commodities. Examples include:

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• Cotton Incorporated (cotton),
• Farmland Originally a full-service cooperative, filed for Chapter 11 bankruptcy in 2002. (Processed meat division most well-known to consumers.)
• Florida's Natural Growers (citrus)
• Land O'Lakes (dairy and farm supply).
• Ocean Spray (cranberries and citrus),
• Sunkist Growers, Incorporated (citrus fruit),
• Sun-Maid (raisins),
• Tillamook County Creamery Association (dairy)
• Nebraska Rural Radio Association A group of farmer/rancher owned radio stations in Nebraska

In California and other states where it is legal, medical marijuana is generally produced by cooperatives.

Related Topics:
California - Medical marijuana

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In other parts of the world

There are strong agricultural / agribusiness cooperatives, and agricultural cooperative banks, in most European countries.

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Most emerging countries are experiencing a significant development of agricultural cooperatives, an economic sector prone to cooperation either for export or for local needs. Ex. Bolivarian Republic of Venezuela.

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Cooperative banking (Credit unions and Cooperative savings banks)

Credit Unions provide a form of cooperative banking. In North America, the caisse populaire movement started by Alphonse Desjardins in

Related Topics:
Credit Unions - North America - Alphonse Desjardins

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Quebec, Canada pioneered credit unions.

Related Topics:
Quebec - Canada

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Desjardins wanted to bring desperately needed financial protection to

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working people. In 1900, from his home in Lévis, Quebec, he opened North

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America's first credit union, marking the beginning of the Mouvement Desjardins.

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While they have not taken root so deeply as in Ireland, credit unions are also established in the UK. The largest are work-based, but many are now offering services in the wider community. The Association of British Credit Unions Ltd - ABCUL - represents the majority of British Credit Unions.

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Important European banking cooperatives include the Crédit Agricole in France, Migros and Coop Bank in Switzerland and the Raiffeisen system in Austria, Germany, Switzerland, the Netherlands, and Belgium. Spain, Italy and various European countries also have strong cooperative banks. They play an important part in mortgage credit and professional (i.e. farming) credit. Cooperative banking networks, which were nationalized in Eastern Europe, work now as real cooperative institutions. A remarkable development has taken place in Poland, where the SKOK (spóldzielcze kasy oszczednosciowo-kredytowe) network has grown to serve over 1 million members via 13,000 branches, and is larger than the country?s largest conventional bank.

Related Topics:
Crédit Agricole - Migros - Raiffeisen

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Car sharing

Car sharing is a process by which multiple households share vehicles, which are stored in convenient common locations. It may be thought of as a very short-term, locally-based car hire. It is most prevalent in Switzerland (where the Mobility Car-Sharing cooperative has some 50,000 clients), but is also common in Germany, Austria, and the Netherlands, and is growing in popularity in other European countries. Car sharing operations may be for-profit or non-profit organizations. Zipcar and Flexcar are examples.

Related Topics:
Car sharing - Zipcar - Flexcar

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To reduce confusion with ride-sharing, some Britons prefer the term 'car clubs'.

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