Cooperatives

Overview

Individual farmers cannot consistently and reliably control the price they receive for their agricultural products or the price they pay for the inputs needed to produce those goods. Thus, farmers often form cooperatives so that they can enhance their economic market power. Although there is no universally accepted definition, a cooperative can be defined as a legal business entity created under state law that is owned and operated for the purpose of benefiting those individuals who use its services. A farmer cooperative can serve one or more functions including but not limited to providing loans to farmers, supplying information pertinent to agricultural production, selling inputs necessary to agricultural production, bargaining on behalf of its members, providing transportation services, and marketing agricultural products for its members. Read the full overview.

Note: Recently added resources are posted at the top of the applicable sections.

Major Statutes

Agricultural Adjustment Act, 7 U.S.C. §§ 601-641
Agricultural Cooperatives, 15 U.S.C. § 57b-5
Agricultural Fair Practices Act, 7 U.S.C. §§ 2301-2306
Agricultural Marketing Act, 12 U.S.C. §§ 1141-1141j
Capper Volstead Act, 7 U.S.C. §§ 291-292
Clayton Act, 15 U.S.C. §§ 12-17
Robinson-Patman Price Discrimination Act, 15 U.S.C. § 13
Cooperative Marketing Act, 7 U.S.C. §§ 451-457
Cooperative association representation, 7 U.S.C. § 4508
Discrimination Against Farmers Cooperatives Associations by Boards of Trade, 15 U.S.C. §§ 431-433
Exemption of Farmers’ Cooperatives from Tax, 26 U.S.C. § 521
Farm Credit Act, 12 U.S.C. §§ 2001-2279
Sherman Act, 15 U.S.C. §§ 1-38
Taxable Income of Cooperatives, 26 U.S.C. §§ 1381-1388

Regulations

Agricultural and Horticultural Cooperatives, 26 C.F.R. §§ 1.199-6
Capper-Volstead Act Regulations, 7 C.F.R. §§ 1.160-1.175
Cooperative Reserve Supply Unit, 7 C.F.R. §§ 1124.11
Internal Revenue Service Regulations, Tax Treatment of Cooperatives, 26 C.F.R. §§ 1.1381-1.1383-1
Internal Revenue Service Regulations, Tax Treatment By Patrons of Patronage Dividends, 26 C.F.R. § 1.1385-1
Internal Revenue Service Regulations, Definitions; Special Rules, 26 C.F.R. § 1.1388
Payments to Producers and to Cooperative Associations, 7 C.F.R. § 1033.73

Case Law

Case Law Index for Cooperatives

Center Research Publications

A Snapshot of LLCs and Farming: How Farm Businesses have Implemented the Limited Liability Company Structure in the Midwestern United States (Bachelor & Hall, 2019)
An Introduction to Federal Securities Laws as They Might Apply to Agricultural Operations (Goforth, 2002)
An Overview of Organizational and Ownership Options Available to Agricultural Enterprises:  Part 1; Part 2 (Goforth, 2002)
Considerations for Operating Agreements (Ferrell, 2019)
Forms and Filing Information: Business Organizations (2019)
Legal and Policy Considerations of Investor-Friendly Cooperatives (O’Brien, 2005)
The Farmer’s Legal Guide to Producer Marketing Associations (O’Brien, Hamilton & Luedeman, 2006)

Agricultural Law Bibliography

Introduction   |   Keyword Search   |   Browse Categories

Legal publications on Cooperatives:

Agribusiness Corporations
Cooperatives
Corporate Farming (Restrictions on Corporate Farming/Family Farm Preservation)
Organizational Forms for Agriculture (Business Law and Development)

Reference Resources

Department of Justice (DOJ)

Antitrust Division Manual
Policy Guidelines Manual to Merger Remedies

Internal Revenue Service (IRS)

The Farmer’s Tax Guide, IRS Publication 225
The Agricultural Employer’s Tax Guide, IRS Publication 51
Corporations, IRS Publication 542

USDA Rural Development

Rural Cooperative Development Grant Program
Rural Business-Cooperative Service 
Rural Cooperatives Magazine (Archive)
Publications for Cooperatives
Rural Development

Congressional Resources

Dairy Cooperatives: Potential Implications of Consolidation and Investments in Dairy Processing for Farmers (Government Accountability Office, 2019)

Other Federal Resources

Export Trading Company Act of 1982

Publications

A Brief Introduction to Agricultural Cooperatives (OR St. Ext., 2004; revised 2016)
Agricultural Cooperatives (Tortia, Valentinov, Iliopoulos, 2013)
Agricultural Cooperatives Around the World (Mercier via AgWeb, 2017)
Agricultural Cooperatives I: History, Theory and Problems (King, Ortmann, 2007)
Agricultural Cooperatives: A Guide to Complying with Missouri Securities Laws
Agricultural Cooperatives: Opportunities and Challenges for African American Women in the South (Paarlberg, 2018)
Agricultural Cooperatives: paving the way for food security and rural development (FAO, 2012)
Antitrust Status of Farmer Cooperatives: The Story of the Capper-Volstead Act (Frederick, 2002)
Co-ops 101: An Introduction to Cooperatives (Frederick, 1997)
Cooperatives and Contracting in Agriculture: The Case of West Liberty Foods (IA St. U., 2005)
Cooperatives: Principles and Practices in the 21st Century (Zeuli and Cropp, U. WI Extension, 2004)
Current Challenges in Financing Agricultural Cooperatives (Barton, Boland, Chaddad, Eversull, 2011)
History of Cooperatives in the United States: An Overview (Pitman, 2018)
Basics of Agricultural Cooperative Taxation (Cook, 2017)
How to Start a Cooperative (Rapp & Ely, 1995)
Member Control of Cooperatives: What It Means and How It Is Exercised (Cook, Ratchford, Griffith, 1995)
New Federal Tax Bill Includes Helpful Provisions for Farmers, Especially Those Marketing Through Cooperatives (Hoppe, 2018)
New Generation Cooperative Membership: How Do Members Differ from Nonmembers (Olson, Kibbe, Goreham, 1998)
New Generation Cooperatives: External Environment and Investor Characteristics (Cobia, 1997)
New Section 199A Deduction Impact on Cooperatives (Christianson CPAs & Consultants)
Tax Reform Impacts Cooperatives: New Section 199A (Cook, 2018)
The 199A Deduction: A Look at the Qualified Cooperative Dividend (Tidgren, 2018)
The Co-op Farming Model Might Help Save America’s Small Farms (Jolley via Civil Eats, 2018)
The Contribution of Farmer Cooperatives to the Kansas Economy (Clymer, Briggeman, Letherman, 2019)
The Economic Culture of U.S. Agricultural Cooperatives (Hogeland, 2006)
The Farmer’s Cooperative Yardstick (Williamson, 1998)
Trends of U.S. Agricultural Cooperatives (1913 – 2016) (Demko, 2018)
Understanding Capper-Volstead (Volkin, 1995)

Additional Resources

Committee for the Promotion and Advancement of Cooperatives
Cooperative Communicators Association
Cooperative Network
Cooperatives Posts (Ag & Food Law Blog)
Co-ops: A Key Part of Rural America (USDA)
Database of Cooperative Law (International Labor Organization)
International Co-operative Agricultural Organization
National Cooperative Business Association
National Council of Farmer Cooperatives
National Farmers Union
National Society of Accountants for Cooperatives
Quentin Burdick Center for Cooperatives (ND St. U.)
The Arthur Capper Cooperative Center (KS St. U.)
University of Wisconsin Center for Cooperatives

State Cooperative Councils

Cooperative Council of North Carolina
Iowa Institute for Cooperatives
Kansas Cooperative Council
Montana Council of Cooperatives
Montana Cooperative Development Center
Nebraska Cooperative Council
Northeast Cooperative Council
Northwest Agricultural Cooperative Council
Ohio State University, South Centers, Cooperative Business Development
Oklahoma Agricultural Cooperative Council
Rocky Mountain Farmers Union, Co-op Development Center
South Dakota Association of Cooperatives
Texas Agricultural Cooperative Council

Non-Publicly Available Resources

Anne Meis Knupfer, Food Co-ops in American: Communities, Consumption, and Economic Democracy (Cornell University Press, 2013)