Cooperatives in a Changing Global Food System

This study examines how U.S. agricultural cooperatives are responding to current trends toward the globalization of the agricultural and food sector. Information from three case studies illustrates the extent to which cooperatives’ organizational structure may limit or enhance their ability to compete with investor-owned firms (IOFs) on a global scale. Concentration levels in key agricultural production, processing, and distribution markets are reviewed. Next, the report examines new global strategies being employed by IOFs and their impact on farmer-owned cooperatives. The international activities of three regional cooperatives are examined in detail and data are used to highlight advantages and disadvantages that cooperatives may experience in global competition with IOFs. Factors limiting international involvement by cooperatives include the diverse interests of their members, ties to domestic resource bases and social groups, the high risk levels and long-term nature of international investment, and symbolic barriers, including language barriers and the different connotations of the term “cooperative” in other nations. Potential advantages for cooperatives include their reputation as reliable, high-quality suppliers and ethical business partners and their ability to meet specialty, niche demand created within a global food system. Cooperatives must seek opportunities in the new global system that their organizational structure makes them uniquely qualified to fill. They must also seek member response to questions of international involvement and encourage a spirit of “permanent innovation” among cooperative members and staff. Finally, cooperatives must enhance the potential social, cultural and economic benefits from international cooperation for their membership