Co-op 101
What is exactly is a cooperative?
Learn more about the unique benefits of being a farmer-owned business.
What is a cooperative?
MFA Incorporated is organized as a cooperative, a business owned and controlled by the members who use its products and services. Cooperatives differ from other businesses because they operate for the mutual benefit of member-owners rather than corporate boards and shareholders.
More than 40,000 cooperatives exist in the United States. Their member/owners include more than 100 million Americans — nearly one out of three. These include agriculture, child care, credit, health care, housing, insurance, telephone and electric cooperatives, just to name a few. Among other benefits, cooperatives help members strengthen bargaining power, maintain access to markets, obtain needed products and services on a competitive basis, reduce costs and manage risk.
In agriculture, there are nearly 2,000 farmer cooperatives whose members include a majority of our nation’s 2 million farmers and ranchers. Farmer cooperatives exist for the mutual benefit of their farmer members with earnings returned on a patronage basis. Such patronage dividends help boost the income of farmers directly or by reducing the effective cost of the goods and services provided. Farmer cooperatives also provide over 250,000 jobs, with a total payroll in excess of $8 billion, and contribute significantly to the economic well-being of rural America.
Farmer cooperatives are governed by a board of directors elected by their members — generally based on one member, one vote rather than on the basis of shares or percent ownership as in other types of businesses. This provides for a unique accountability.
All cooperatives — including MFA — operate on a shared set of guiding principles that can be traced to the first modern cooperative founded in Rochdale, England, in 1844. These principles are a key reason that MFA and other farmer-owned cooperatives operate differently, by putting the needs of their members first.
The Seven Cooperative Principles
Cooperative membership is open to all who are able to use its products/ services and willing to accept the responsibility of membership.
Cooperatives are founded on the ideals of democracy. Cooperatives are controlled by their members who actively participate in setting policies and making decisions.
Members contribute equally to the capital of the cooperative. This benefits members in proportion to the business they conduct with the cooperative.
Each cooperative is managed by an independent board elected from its membership, and decisions are made that democratically benefit its members.
Cooperatives provide education and training for members, managers, and employees, as well as information to the general public about the benefits of cooperatives and the products and services they provide.
Cooperatives serve their members by working together through local, national, regional and international structures, providing a larger network of resources, efforts and support.
While focusing on member needs, cooperatives work for the sustainable development of the communities they serve through policies and programs accepted by the members.
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