A cooperative federation or secondary cooperative is a cooperative in which all members are, in turn, cooperatives. [1] Historically, cooperative federations have predominantly come in the form of cooperative wholesale societies and cooperative unions. [2] Cooperative federations are a means through which cooperatives can fulfill the sixth Cooperative Principle, cooperation among cooperatives. The International Cooperative Alliance notes that “Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures.” [3]
According to cooperative economist Charles Gide, the aim of a cooperative wholesale society, which is owned by retail consumer cooperatives, is to arrange "bulk purchases, and, if possible, organise production". [2] The best historical examples of this were the English and Scottish Cooperative Wholesale Societies, which were the forerunners to the modern Cooperative Group.
A second common form of cooperative federation is a cooperative union, whose objective (according to Gide) is “to develop the spirit of solidarity among societies and... in a word, to exercise the functions of a government whose authority, it is needless to say, is purely moral.” [2] Cooperatives UK and the International Cooperative Alliance are examples of such arrangements.
Regional agricultural cooperatives, such as Land O'Lakes and the former Farmland Industries, are cooperative federations owned by local farmers' cooperatives. Like the Cooperative Group (above), Land O'Lakes is actually a hybrid of a primary and secondary cooperative. [4]
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In some countries with strong cooperative sectors, such as the UK, cooperatives have organized parliamentary political parties to represent their interests. The British Cooperative Party is an example of such an arrangement.
Cooperatives whose member owners are businesses, such as retailers' cooperatives, are sometimes called secondary cooperatives, even when their members are not themselves cooperatives. [5]
A secondary cooperative is a cooperative business democratically controlled by its members, all of whom are themselves cooperatives and share certain aims or values in common. The secondary cooperative can be a way for these cooperatives to do things that help achieve their aims that they would not be able to do by themselves. Secondary cooperatives have been used in a number of sectors already – Credit Unions, Housing Cooperatives and Social Change Cooperatives for example.