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How to create an agricultural cooperative?

Agricultural cooperatives are one of the most effective ways of uniting farmers in the world. The American cooperative CHS or the Japanese ZEN-NOH unite tens of thousands of farmers, cultivate millions of hectares of land and have offices all over the world. There are no such large associations in Ukraine yet, but due to the war and the economic crisis, the topic of cooperation is gaining more and more popularity.

Why should farmers unite?

Creation of a cooperative - it is an opportunity to reduce the cost of means of production, increase profits, and create new chains of added value. 

For example, farmers can unite to jointly purchase plant protection products, seed material, mineral fertilizers. This makes it possible to make these products cheaper by receiving a discount on wholesale deliveries. Often, the purpose of the association is to form a joint supply of products, in particular, for export, in order to get a better price. It is also advisable to unite for joint purchase of agricultural machinery, construction of elevators or creation of own processing. 

Therefore, when the idea of association arises, it is important for farmers to decide what the future cooperative will do and what goal the founders are pursuing. 

Which cooperative to register?

At least three people are needed to establish a cooperative. These can be both legal entities and natural persons who are producers of agricultural products. The founders of the cooperative sign the minutes of the general meeting. A statute will also be required for registration. It can be developed independently, or use a model statute, the form of which is approved by a Cabinet resolution. Detailed requirements for the charter are contained in Art. 9 of the Law of Ukraine "On Agricultural Cooperation".

The name of the SG cooperative must contain information about its organizational and legal form - "agricultural cooperative" and a name consisting of its own name.

After notarization of the signatures of the founders on the protocol and statute, the documents together with the application are submitted to the state registrar. 

Activities of the cooperative

The management of the cooperative is carried out by the general meeting, which consists of the members of the cooperative. These are the founding members and other members who will then be accepted into the cooperative. Associate membership is also provided for in cooperatives, but associate members participate in management only with the right of an advisory vote.

The general meeting of members is appointed by the executive body of the cooperative - the board headed by the chairman. This body manages the cooperative. The cooperative must also have an audit commission and a supervisory board. 
The cooperative is financed both from the contributions of the members of the cooperative and from the funds received from the implementation of economic activities. Although a cooperative may be created without the goal of making a profit, but solely to meet the needs of its members. If the cooperative operates for the purpose of obtaining profit, the profit that remains after paying taxes and other mandatory payments is distributed among the members of the cooperative in the form of dividends. 

As you can see, the activities of the cooperative are quite similar to the activities of any other business association. At the same time, joining cooperatives has many advantages for the members of such cooperatives. By uniting, farmers can not only survive half of the economic crisis, but also significantly improve the efficiency of their farms. 



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