Formation of Agricultural Cooperatives

Individual farmers often have difficulty controlling the prices they receive for their agricultural products or the prices they pay to produce them. Agricultural cooperatives are used to help farmers maintain economic market power by combining the resources of a group of agricultural producers. An agricultural cooperative is generally composed of a group of agricultural producers to market its members’ agricultural products. In addition to marketing agriculture products, cooperatives can also provide loans to farmers, bargain on behalf of their members, and provide transportation services.

There are specific statutes in each state that govern the formation of cooperatives. Not every state has specific statutes for creating agricultural cooperatives, but every state has general cooperative statutes that allow for their formation. This compilation covers some of the basic laws for forming an agricultural cooperative in every state. To read more about cooperatives, check out the National Agricultural Law Center’s reading room on cooperatives, here. To learn more about forming a cooperative, the United States Department of Agriculture Rural Development has developed several resources, including an in-depth guide on starting a cooperative. This compilation was last updated in May 2022.