What is a cooperative? One definition of a cooperative is ….”An autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.”

  2. Types of Cooperatives

Types of Cooperatives

In other words, a business owned and controlled equally by the people who use its services or who work at it, and for their benefit. These are types of cooperatives:

PRODUCER COOPERATIVES
They are owned by people who produce the same types of goods. They are farms, fishing boats, forests, bakery, bookstore, artist’s studios or craft workshops. The members are independent producers and may cooperate in various ways. They may buy farm inputs, equipment and insurance, hire managers and sales people, market and advertise together or operate storage facilities, processing plants or a distribution network.

WORKER COOPERATIVES
These are businesses owned and democratically controlled by some or all of their “workers-owners.” This is one of the most versatile of cooperative forms, and can be used by a small group of business partners running a bakery or bookstore. They can also run large industrial operations including some of the largest co-oops. Membership is not compulsory for employees, but generally you have to be an employee to become a member.

Depending on the start-up capital needed, they can offer workers a chance to own their own company with very little financial investment. It is an ideal structure for people with modest or low incomes. They have become increasingly popular with small groups of attorneys, designers & engineers, fundraisers and other professionals. One of the big appeals of the co-op structure is that everyone takes a direct role in policy making and other governance functions and are seen in print shops, copy centers & bookstores, small manufacturing, construction,& engineering firms, homecare & daycare professionals, restaurants, bakeries, auto repair shops and groups of artists or artisans.

CONSUMER COOPERATIVES
This is a business owned and governed by its customers. Consumers can create a cooperative to provide pretty much anything they want to buy. Their purchases may include groceries, electricity or telephone service, housing, healthcare, or financial (credit unions). Names like Nationwide Insurance, Rural Electric Cooperative network, REI (Recreational Equipment Incorporated) co-op’s are familiar to many people.

PURCHASING COOPERATIVES
Purchasing or retail cooperatives, sometimes called shared service cooperatives, are used by independent business owners to raise their visibility and cut costs for goods and services such as advertising, payroll and insurance. Examples include ACE & True Value Hardware, Best Western Hotels, Carpet One/CCA Global Partners and fast food franchises like KFC are members of cooperatives.

CREDIT UNIONS
Consumer owned financial services cooperatives in which every depositor becomes a member-owner. Credit unions are not for profit, because there purpose is to serve their members rather than to maximize profits. Based on data from the World Council of Credit Unions, at the end of 2010 there were 52,945 credit unions world-wide in 100 countries. Collectively they serve 188 million members and oversaw $1.5 trillion in assets.

SOCIAL COOPERATIVES
This type of cooperative exists to provide social services such as care for children, elderly and for disabled people and the integration of unemployed people into the workforce. A particularly successful form of multi-stakeholder social cooperative in Italy called a Type A (7,000 exist). A Type A social cooperative brings together providers and beneficiaries of a social service as members.

HOUSING COOPERATIVES
These cooperatives are owned by the residents. This can range from a single house to multi-family complexes with thousands of units. It also included co-housing projects, in which many of homes are cooperatively owned. Condominiums are a similar to coop’s but with condos each member owns their own unit whereas in a cooperative, each member owns a share of the co-op that owns all of the property.

AGRICULTURAL COOPERATIVES
These cooperatives are widespread throughout rural areas. In the United States there are both marketing and supply cooperatives. Throughout Europe are strong agricultural agribusiness cooperatives and agricultural cooperative banks. Most emerging countries are developing agricultural cooperatives.