What is a cooperative? It’s a business founded, governed and owned by the people it serves. Cooperatives enable people with similar interests and needs to buy products and services at better costs and terms, or to market their own products more effectively.

A Part of Everyday Life
Cooperatives today provide more than 130 million Americans with a wide range of goods and services, from agricultural products and utility services, to health care and housing. Cooperatives range in size from small local cooperatives to large national and international companies. Taken together, the top 100 U.S. cooperatives have combined revenues of $131 billion. 

More than 40 percent of the people in the United States belong to a cooperative. Over 400,000 farmers, ranchers and their agricultural cooperatives belong to the Farm Credit System. The nation's 930 rural electric cooperatives and approximately 270 rural communications cooperatives serve more than 41 million people nationwide.  Nearly 87 million people belong to the nation’s 9,000 credit unions. One of the nation’s premier news services, Associated Press, is also a cooperative.  More than 1.2 million American families live in cooperative housing. Co-ops also exist to provide day care, health care, insurance and many other products and services.

Benefits of Belonging to a Cooperative
Unlike other forms of business ownership, cooperatives are owned by their customers.  Typically, a portion of the cooperative's profits is distributed to the owner-members. This distribution, generally referred to as patronage, can be in cash or cash plus some form of capital. The amount a member receives is generally based on his or her use of the cooperative during the respective operating year.

Members of cooperatives also typically have a voice in how the business is run.  Most cooperatives are governed by a board of directors primarily elected by owner-members.  Each member typically has one vote, regardless of  the level of participation. In many co-ops, voting is also allowed based partly on the amount of equity the member has invested, or on the amount of use the member has made of the co-op.

Types of Rural Cooperatives
Cooperatives cover a broad range of products and services to Americans. Agricultural cooperatives range in size from country grain elevators and cotton gins to food industry giants such as Welch's, Blue Diamond, Ocean Spray, Sunkist and Land O’Lakes. More than 900 rural electric cooperatives and approximately 270 rural communications cooperatives serve more than 41 million people. And finance cooperatives include one of the largest and oldest cooperative networks in the U.S., the Farm Credit System, which provides agriculture with more than 30 percent of its financial needs.