What is an agricultural cooperative? It is a company with a surprisingly modern business model in line with today’s key economic, social and environmental questions. This business model, based on “cooperative capitalism” combines freedom of enterprise, economic solidarity and a strong bond to a local region by putting the farmers at the heart of their company’s governance and growth strategy.
1. Cooperatives are sustainable – unique governance and structure.
An agricultural cooperative is a company created by and for farmers, who also run it. They both own it and supply it with the animal or plant products that they produce and which will be collected and processed by their cooperative, which often produces the product for the end-consumer.
Behind this definition of an agricultural cooperative lies a robust structure, which guarantees the long-term future of sustainable agriculture.
Le modèle coopératif affiche une conviction : il n’y a pas de victoire individuelle ! Fondé sur la solidarité et la compétitivité, il prône une action collective tournée vers un but commun.
3/4 OF FARMERS ARE MEMBERS OF AT LEAST ONE AGRICULTURAL COOPERATIVE.
2. Cooperative companies with people at their heart
According to their statutes, cooperatives are partnerships, not limited liability companies. The cooperative model is entirely based on democracy, with people at their heart. Thus, each farmer, no matter what the size of their farm, has a vote at General Assemblies to give their opinion on the main plans proposed by their cooperative. The cooperative model also promotes self-determination and a sense of responsibility – essential qualities that allow cooperative members to play their role as entrepreneurs!
Within a cooperative, each member, no matter the size of their share capital, has the same decision-making power. This is very different from limited liability companies whose largest shareholders have the greatest decision-making power.
THE COOPERATIVE MODEL PRACTICES DEMOCRATIC GOVERNANCE, BASED ON THE PRINCIPLE OF “ONE PERSON, ONE VOTE”.
The humanistic nature of cooperatives also comes through in their members open and determined. All farmers can join a cooperative if, of course, they are prepared to take their responsibilities as a member.
“Cooperative capitalism”: capitalism with a human face
The cooperative model takes a long-term view! The mission of an agricultural cooperative is not to remunerate financial investor shareholders, but to ensure the long-term professional future of its members. Its entire organisation is based on the participation of its farmer-members. Encouraging the principle of equity, the distribution of profits also involves retention of profits to ensure the long-term financial solidity of the company. Because the true purpose of an agricultural cooperative is to be handed down from one generation of farmers to the next.
DID YOU KNOW? SOME FRENCH COOPERATIVE COMPANIES WERE CREATED OVER A CENTURY AGO!
Logically enough, therefore, agricultural cooperatives cannot be bought out our relocated. Because the share capital is jointly held only by the farmer-members, cooperatives cannot be sold and their shares cannot be purchased externally. They cannot be relocated because they are owned by French farmers who, by nature, are permanently linked to their farms.
They can, however, sell their products abroad, via subsidiaries, for example. The profits from these commercial activities come back to the cooperative, in France!
Watch this animation to learn more about the agricultural cooperative model:
3. Diverse regions and companies, a rich variety of products: agricultural cooperatives are committed to meeting all demands
Whether they produce specific highly local products or large volumes of raw materials, cooperatives cover all of consumers’ needs:
- products that are typical of specific regions which usually carry official quality labels;
- regional products that consumers look for because they are seasonal or local;
- mass market products (processed or not) to meet European and international demand for food.
Agricultural cooperatives work in 18 farming sectors: milk, honey, wine, tobacco, animal insemination, poultry farming, linen, agricultural equipment, forestry, alcohol and distillation, herbs and plants for perfume and medicines, cattle and meat, fruits and vegetables, sugar beet and sugar, electricity, alfalfa, cereals-supply, animal feed.
Whether they are micro-companies, SMES or international groups, cooperative companies have developed many brands which have built their identity based on the rich diversity of their agricultural and agri-food products, land, sectors and expertise.
550 cooperatives, partnerships and subsidiaries are committed to organic farming and agri-food.
AGRICULTURAL COOPERATIVES COLLECT 70% OF ORGANIC FIELD CROP CEREALS AND 40% OF ORGANIC MILK.
4. Cooperative companies take action on quality and traceability
French agricultural cooperatives are closely involved in promoting food quality and traceability!
While international markets speculate on agricultural raw materials, cooperatives stand for respect for the land and closeness between producers and consumers and give food its true meaning and value.
They pioneered in introducing quality and origin labels (Red Label, AOC/PDO, IGP/PGI) and have the organisation to meet today’s consumer challenges. Through the Agri Confiance® approach, they have become the standard-bearers of sustainable food!