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Cooperative Development

Cooperative History

Although people have been working together for their mutual benefit throughout human history, the cooperative form of business organization began during the Industrial Revolution. Cooperatives were useful for promoting the interests of the less powerful members of society. Farmers, producers, workers and consumers found that they could accomplish more collectively than they could individually.

Cooperative History At A Glance

• First recognized cooperative business was formed in 1752 – a mutual fire insurance company.
• First organized cooperative development effort: The Grange, founded in 1867, had 858,000 members by 1875. Endorsed Rochdale Principles in 1875, exposing farmers to principles.
• Other farm organizations followed as leaders in cooperative development, including Farm Bureau and the National Farmers Union. The number of agricultural cooperatives peaked in 1930 at 12,000.
• First housing cooperative was established in New York City in 1927.
• The Federal Credit Union Act was passed in 1934. Most credit unions were established in the 1930s.
• The Rural Electrification Act was passed in 1936, which made loans to rural electric cooperatives and rural telephone cooperatives. 

Major cooperative sectors include:

• Agriculture
• Credit unions
• Grocery
• Housing
• Rural Electric Cooperatives

Current (2007) statistics for agricultural cooperatives:

• Number of cooperatives: 2,594
• Membership: 181,000 full-, part-time and seasonal workers
• Net business volume: $127.8 billion
• USDA Cooperative Statistics 2007 (PDF)
• Statistics for All U.S. Cooperatives 2009

Legal History Of Cooperatives

• Capper Volstead – National law passed in 1922 that allows farmers to unite for marketing purposes without breaking anti-trust laws. Exemption is only valid when:
  • Association operates for mutual benefit of producer members.
  • One-member one-vote rule followed or dividends on stock or membership capital limited to 8 percent.
  • Non-member business must be less than 50 percent of total business.
• By 1911, 12 states had enacted special cooperative laws.  Current cooperative statutes are remarkably uniform.

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