Cooperatives in a
This study examines how U.S. agricultural cooperatives are responding to current
trends toward the globalization of the agricultural and food sector. Information from
three case studies illustrates the extent to which cooperatives’ organizational structure
may limit or enhance their ability to compete with investor-owned firms (IOFs) on a
global scale. Concentration levels in key agricultural production, processing, and distri-
bution markets are reviewed.
Next, the report examines new global strategies being employed by IOFs and their
impact on farmer-owned cooperatives. The international activities of three regional
cooperatives are examined in detail and data are used to highlight advantages and dis-
advantages that cooperatives may experience in global competition with IOFs.
Factors limiting international involvement by cooperatives include the diverse interests
of their members, ties to domestic resource bases and social groups, the high risk lev-
els and long-term nature of international investment, and symbolic barriers, including
language barriers and the different connotations of the term “cooperative” in other
Potential advantages for cooperatives include their reputation as reliable, high-quality
suppliers and ethical business partners and their ability to meet specialty, niche
demand created within a global food system. Cooperatives must seek opportunities in
the new global system that their organizational structure makes them uniquely quali-
fied to fill. They must also seek member response to questions of international involve-
ment and encourage a spirit of “permanent innovation” among cooperative members
and staff. Finally, cooperatives must enhance the potential social, cultural and econom-
ic benefits from international cooperation for their membership.
Key words: agricultural cooperatives, concentration, globalization, agency theory