National Farmers Union promotes rural economic and cooperative development by supporting existing agricultural co-ops and helping form new farmer co-ops and other rural businesses. The primary objective is to help family farmers and ranchers add value to the food, fiber and energy they produce. NFU assists producers to retain ownership of their commodity further into the processing channel and enhance market returns on their investment. By working together with other persons and groups, Farmers Union helps family farmers and ranchers advance their farm, ranch, co-op and community enterprises.

Early Forms of Cooperation

Cooperatives have a deep history in agricultural and rural communities throughout the world. Some of these early forms of cooperatives include land clearing, house and barn raising, road building, threshing, corn husking, harvesting and community protection.

The Rochdale Pioneers

The Rochdale Pioneers were a group off weavers from Rochdale, England who started a consumer food cooperative in 1844. This early supply cooperative quickly grew and prospered. These pioneers are credited with developing the Rochdale Principles, which became the standard principles of success for cooperatives in the late 1800s and early 1900s.

Early Cooperatives in the United States

Benjamin Franklin assisted in the creation of America’s first formal cooperative in 1752. This cooperative pooled monies from participating members of the community to ensure each others property in the event of a fire. The company was called “The Philadelphia Contributionship for the Insurance of Houses from Loss by Fire.” Today this company still operates ad “The Philadelphia Contributionship.”

Other early forms of organized agricultural cooperatives in the United States include:

  • A Dairy Cooperative, Goshen, Connecticut – Formed in 1810
  • A Cheese Making Cooperative, South Trenton, New Jersey – Formed in 1810
  • A Hog Marketing Cooperative, Granville, Ohio – Formed in 1820
  • A Butter Making Cooperative, Campbell Hall, New York – Formed in 1856
  • A Grain Elevator Cooperative, Madison, Wisconsin – Formed in 1857
  • A Farm Supply & Fertilizer Cooperative, Riverhead, New York – Formed in 1867
  • A Fruit Marketing Cooperative, Hammonton, New Jersey – Formed in 1867
  • By the end of 1867 there were over 400 cooperative dairy processing plants throughout the country.

Early leadership for the cooperative movement came from the National Grange, Farmers Alliance, Farmers Union and the National Council of Farmer Cooperative Association. The advocacy from these and other groups led to the creation of the USDA Extension Service, the USDA Division of Cooperative Marketing, the Farm Credit System, funding for electrification and telephone services in rural communities, and the passage of the Capper-Volstead Act that created an exemption in the anti-trust act to allow farmers to form marketing cooperatives.

Principles of Cooperatives
  1. Voluntary and Open Membership — Cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.
  2. Democratic Member Control — Cooperatives are democratic organizations controlled by their members, who actively participate in setting policies and making decisions. The elected representatives are accountable to the membership. In primary cooperatives, members have equal voting rights (one member, one vote) and cooperatives at other levels are organized in a democratic manner.
  3. Members’ Economic Participation — Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the cooperative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing the cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.
  4. Autonomy and Independence — Cooperatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their cooperative autonomy.
  5. Education, Training, and Information — Cooperatives provide education and training for their members, elected representatives, managers and employees so they can contribute effectively to the development of their cooperatives. They inform the general public, particularly young people and opinion leaders, about the nature and benefits of cooperation.
  6. Cooperation Among Cooperatives — Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures.
  7. Concern for Community — While focusing on member needs, cooperatives work for the sustainable development of their communities through policies accepted by their members.
Consumers and Cooperatives

The success of a plentiful, safe and alternate food, fiber and energy system, which more closely links producers to consumers, depends on consumer interest and involvement. In that aspect, National Farmers Union undertakes efforts on multiple fronts to redirect America’s food system and to comprehensively revitalize and redevelop rural America with homegrown products. Family farmers seek and require access to additional markets. Farmers Union is exploring effective methods and new technologies for innovative networking, distribution and direct marketing systems of the products produced by farmers, ranchers, and community value-added agriculture groups. Several Farmers Union member-owned cooperative and rural business projects are focused on new agricultural processing and marketing efforts with quality assurance programs aimed at customer satisfaction.