A co-operative federation or secondary co-operative is a co-operative in which all members are, in turn, co-operatives. [1] Historically, co-operative federations have predominantly come in the form of co-operative wholesale societies and co-operative unions. [2] Co-operative federations are a means through which co-operatives can fulfill the sixth Co-operative Principle, co-operation among co-operatives. The International Co-operative Alliance notes that “Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures.” [3]
According to co-operative economist Charles Gide, the aim of a co-operative wholesale society, which is owned by retail consumer co-operatives, is to arrange "bulk purchases, and, if possible, organise production". [2] The best historical examples of this were the English and Scottish Co-operative Wholesale Societies, which were the forerunners to the modern Co-operative Group.
A second common form of co-operative federation is a co-operative 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] Co-operatives UK and the International Co-operative Alliance are examples of such arrangements.
Regional agricultural co-operatives, such as Land O'Lakes and the former Farmland Industries, are co-operative federations owned by local farmers' co-operatives. Like the Co-operative Group (above), Land O'Lakes is actually a hybrid of a primary and secondary co-operative. [4]
 | This section needs expansion. You can help by adding to it. (June 2008) |
In some countries with strong co-operative sectors, such as the UK, co-operatives have organized parliamentary political parties to represent their interests. The British Co-operative Party is an example of such an arrangement.
Co-operatives whose member owners are businesses, such as retailers' co-operatives, are sometimes called secondary co-operatives, even when their members are not themselves co-operatives. [5]
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". Cooperatives are democratically controlled by their members, with each member having one vote in electing the board of directors. Cooperatives may include:
Demutualization is the process by which a customer-owned mutual organization (mutual) or co-operative changes legal form to a joint stock company. It is sometimes called stocking or privatization. As part of the demutualization process, members of a mutual usually receive a "windfall" payout, in the form of shares in the successor company, a cash payment, or a mixture of both. Mutualization or mutualisation is the opposite process, wherein a shareholder-owned company is converted into a mutual organization, typically through takeover by an existing mutual organization. Furthermore, re-mutualization depicts the process of aligning or refreshing the interest and objectives of the members of the mutual society.
A co-operative wholesale society, or CWS, is a form of co-operative federation, in this case, the members are usually consumer cooperatives. According to co-operative economist Charles Gide, the aim of a co-operative wholesale society is to arrange “bulk purchases, and, if possible, organise production.” In other words, a co-operative wholesale society is a form of federal co-operative through which consumers co-operatives can collectively purchase goods at wholesale prices, and in some cases collectively own factories or farms.
The social economy is formed by a rich diversity of enterprises and organisations, such as cooperatives, mutuals, associations, foundations, social enterprises and paritarian institutions, sharing common values and features:
An agricultural cooperative, also known as a farmers' co-op, is a producer cooperative in which farmers pool their resources in certain areas of activity.
The International Cooperative Alliance (ICA) is a non-governmental cooperative organization founded in 1895 to unite, represent and serve cooperatives worldwide. The ICA is the custodian of the internationally recognised definition, values and principles of a cooperative in the ICA Statement on the Cooperative Identity. The ICA represents 315 co-operative federation and organisations in 107 countries.
The United Kingdom is home to a widespread and diverse co-operative movement, with over 7,000 registered co-operatives owned by 17 million individual members and which contribute £34bn a year to the British economy. Modern co-operation started with the Rochdale Pioneers' shop in the northern English town of Rochdale in 1844, though the history of co-operation in Britain can be traced back to before 1800. The British co-operative movement is most commonly associated with The Co-operative brand which has been adopted by several large consumers' co-operative societies; however, there are many thousands of registered co-operative businesses operating in the UK. Alongside these consumers' co-operatives, there exist many prominent agricultural co-operatives (621), co-operative housing providers (619), health and social care cooperatives (111), cooperative schools (834), retail co-operatives, co-operatively run community energy projects, football supporters' trusts, credit unions, and worker-owned businesses.
A consumers' co-operative is an enterprise owned by consumers and managed democratically and that aims at fulfilling the needs and aspirations of its members. Such co-operatives operate within the market system, independently of the state, as a form of mutual aid, oriented toward service rather than pecuniary profit. Many cooperatives, however, do have a degree of profit orientation. Just like other corporations, some cooperatives issue dividends to owners based on a share of total net profit or earnings ; or based on a percentage of the total amount of purchases made by the owner. Regardless of whether they issue a dividend or not, most consumers’ cooperatives will offer owners discounts and preferential access to good and services.
Cooperative banking is retail and commercial banking organized on a cooperative basis. Cooperative banking institutions take deposits and lend money in most parts of the world.
Cooperative economics is a field of economics that incorporates cooperative studies and political economy toward the study and management of cooperatives.
Cooperative federalism is a school of thought in the field of cooperative economics. Historically, its proponents have included J.T.W. Mitchell, Charles Gide, Paul Lambert, and Beatrice Webb.
The history of the cooperative movement concerns the origins and history of cooperatives across the world. Although cooperative arrangements, such as mutual insurance, and principles of cooperation existed long before, the cooperative movement began with the application of cooperative principles to business organization.
The Deutsche Genossenschafts- und Raiffeisenverband e.V. (DGRV) is the Co-operative federation for German Co-operatives.
Credit unions are not-for-profit financial cooperatives. In the early stages of development of a nation's financial system, unserved and underserved populations had to rely on risky and expensive informal financial services from sources like money lenders, ROSCAs and saving at home. Credit unions proved they could meet demand for financial services that banks could not: from professional, middle class and poorer people. Those that served poorer urban and rural communities became an important source of microfinance.
The South Korean National Agricultural Cooperative Federation was established in 1961 to enhance the social and economic status of its membership and to promote a balanced development of the national economy. Its role is divided into three areas: marketing and supply, banking and insurance, and extension services.
Buldana Urban Cooperative Credit Society was formed on 15 August 1986. Chairman (Mr.) Radheshyamji Chandak started it with capital of 210 USD and 72 members. In a span of 27 years and mainly in last decade under managing director Dr Sukesh Zamwar, the Credit Society has grown to size of 1.1 billion dollar business with more than half a million (700,000) membership. The area of operation is mainly in central and western India in four states of India. Now the society has 333 branches and 5000 employee and 300 warehouses. Total built up area for Warehouse is 5,000,000 sq feet and capacity of 435,000 metric tons. It maintains a presence in most of the metro cities of India and also in rural areas.
The Irish Agricultural Organisation Society (IAOS) was an agricultural association in Ireland which advocated, and helped to organise, agricultural cooperativism, including mutual credit facilities. From its establishment by Sir Horace Plunkett in 1894, it quickly became an important element of the Irish economy and laid the foundations of the successful Irish dairy industry.
Co-operative Central Exchange, founded in 1917 and known from the spring of 1931 as Central Co-operative Wholesale, was the coordinating entity of a network of consumers' co-operatives located primarily in the states of the American Upper Midwest. Based in the Great Lakes port city of Superior, Wisconsin, located adjacent to the Finnish enclave of Duluth, Minnesota, the Co-operative Central Exchange produced an array of its own branded products under the "Red Star" and "Co-operators' Best" brand names and did annual volume well in excess of $1 million from 1928 on.
A secondary co-operative is a co-operative business democratically controlled by its members, all of whom are themselves co-operatives and share certain aims or values in common. The secondary co-operative can be a way for these co-operatives to do things that help achieve their aims that they would not be able to do by themselves. Secondary co-operatives have been used in a number of sectors already – Credit Unions, Housing Co-operatives and Social Change Co-operatives for example.