What is cooperative farming?

Question

What is cooperative farming?

Answer 1

A cooperative farming effort is defined as a system in which individual farmers pool their resources (excluding land) to buy commodities such as seeds and fertilizers, and services such as marketing. It is a system of farming found throughout the world and is particularly widespread in Denmark and the ex-Soviet republics. In a collective farm, land is also held in common.

The Israeli farmers have nearly perfected cooperative farming. Moshavim are types of cooperative agricultural communities of individual farms pioneered by the Jewish immigration during the early 20th Century.

The moshavim are similar to kibbutzim with an emphasis on community labor,  But contrary to the collective kibbutzim, farms in a moshav tended to be individually owned but of fixed and equal size. Workers produced crops and goods on their properties through individual and/or pooled labour and resources and used profit and foodstuffs to provide for themselves, thus creating a system where good farmers were better off than bad ones, unlike in the communal kibbutzim where all members enjoyed the same living standard.

Answer 2

Cooperative farming may be set up almost as a single corporation at the operational level, where the cooperative compensates its members for their contributions, be they land, equipment, labour expertise,  operating capital, anything the organization want to buy/rent from the individual member.

Cooperative boards may choose to buy or rent land not owned by individual members, from profits of the operation or from liquid assets and with debt.

The products of the cooperative operation will typically be marketed in common, but not necessarily all products.

The members of the cooperative normally enter into a long term contract to supply what it is they contribute. They may hold out of the operation certain lands, certain business functions that do not meet the needs of the cooperative. So that a member may remain in private practice while cooperating. The member may or may not be providing any work, subject to negotiation.

A characteristic of the cooperative is that profits over and above payments for member contributions, are distributed to members in proportion to their  contributions. Losses are shared the same way. Many cooperative organizations do consider need in distributing profits and losses.

If a member wishes to or must leave a cooperative operation, longer term contracts may make this cumbersome, and liquidity may be a problem as other members have no obligation to ante up money to buy any member's interests.