- -   AGRICULTURE CORE CURRICULUM   - -

(CLF1000)  Advanced Core Cluster:  AGRICULTURAL BUSINESS MANAGEMENT

    (CLF1500)  Unit Title:  COOPERATIVES

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    (CLF1506)  Topic:  COOPERATIVE PRINCIPLES        Time             Year(s)
                       AND DECISIONMAKING          1 Hour               3 / 4
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           Topic Objectives:  Upon completion of this lesson the student
                              will be able to:

           Learning Outcome #:

                (M-3) - Explain how local and regional cooperatives are 
                        organized to serve members.

                (M-4) - Identify the basic principles that ensure that 
                        cooperatives serve the needs of member-patrons.

           Special Materials and Equipment:

           References:  Agricultural Council of California.  EXPLORING 
                          FARMER COOPERATIVES (Chapters 7 and 8).

           Evaluation:  Unit Exam

TOPIC PRESENTATION:  COOPERATIVE PRINCIPLES AND DECISONMAKING

A.  Basic Principles

    1.  Democratic Control

        a.  Most cooperatives are based on one person, one vote.

        b.  Some cooperatives in California allow one vote per member plus 
            additional votes based on patronage.

    2.  Limited Rate of Return on Invested Capital

        a.  The interest rate on revolving funds or shares of stock is limited 
            by law to 8 percent.

    3.  The primary function of cooperatives is to operate at cost-of-service.

        a.  Cooperatives often provide the highest prices to farmers on
            commodities purchased for processing.

        b.  They also often provide the lowest prices on inputs sold to the 
            farmers.

        c.  Any profits are distributed as patronage dividends in proportion 
            to use of cooperative.
B.  Why Cooperatives Succeed

    1.  Good management

    2.  Accumulation of adequate capital for efficient operation

    3.  Sufficient need for cooperative's services


    4.  Strong membership support

    5.  A sound legal organization

    6.  Sound operating policies

    7.  Well-chosen and smoothly functioning boards of directors

C.  Member Responsibilities

    1.  Members both own the business and use the business.

    2.  Members are more concerned about cooperative policies.

    3.  Members organize and approve the original bylaws.

    4.  Members usually have to approve changes in bylaws.

    5.  Members elect the Board of Directors.

    6.  Members are final authority on all fundamental issues concerning the 
        cooperative's goals and purposes.

D.  Director Responsibilities

    1.  Directors decide operating policies and adopt long-range plans.

    2.  Directors hire the manager. 

    3.  Directors check to insure that policies are carried out.

    4.  Directors judge the performance of management.

    5.  Directors are responsible for accepting and expelling members.

E.  Management Responsibilities

    1.  Management recommends long-range plans.

    2.  Management carries out the policies and instructions of the board.

        a.  Management hires personnel.

        b.  Management manages the funds of the association.

        c.  Managers direct day-to-day activities of the business.


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        ACTIVITY:

        1.  Have the class go through the steps of hiring a new manager by 
            holding mock interviews with student applicants.
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11/26/91 CM/ch


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