Co-operatives for small producers

Page last updated: Thursday, 17 May 2018 - 10:20am

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Small producers can often feel a little out of their depth when it comes to supplying and marketing their produce to large-scale buyers.

A co-operative can help build economies of scale and allow small producers to compete against the ‘big guys’.

What is a co-operative?

A co-operative is an enterprise jointly owned and democratically controlled by the individuals who establish it and who benefit from using its services.

In Western Australia (WA), a co-operative must be created by a minimum of five individuals, incorporated associations or companies if established under the WA Co-operatives Act (2009). In other states, especially Victoria, co-operatives are sometimes formed using the federal Corporations Act by ensuring that the constitution complies with the requirements of the tax laws.

Members of a registered co-operative agree to use its services and contribute capital to finance the enterprise, usually by purchasing shares. A board of directors is elected by members to manage the business of the co-operative.

Like a company, a co-operative’s shareholders, directors and employees are not responsible for any debts incurred during operation.

What does a co-operative do?

A co-operative can be formed for a variety of activities to provide goods and/or services to its members or for the supply of goods and/or services to the general public.

For instance, people in a small town may set up a co-operative supermarket to buy food in bulk so that its' members can access cheaper products or a group of small agricultural producers may form a co-operative in order to market their products.

Marketing, supply and service co-operatives are the most common types of agricultural co-operatives.

Marketing co-operatives

Marketing co-operatives can provide members with benefits such as increasing the price they get for their products, reducing the costs of marketing and inputs and securing their market.

These co-operatives are often involved in activities past the farm gate, including transport, packing, processing and distribution.

Some marketing co-operatives operating in WA include the Co-operative Bulk Handling Limited (grain marketing), Western Australian Meat Marketing Co-operative Limited and Sweeter Banana Co-operative Ltd.

Supply co-operatives

Supply co-operatives purchase products and services for their members. For instance, they make large-scale purchases of food products, fuel, seed and fertilisers, passing the savings onto members.

A number of WA supply co-operatives include Geraldton Organised Primary Producers Cooperative Ltd, Quairading Farmers Co-operative Company Ltd and Mount Barker Co-operative Ltd.

Service co-operatives

Service co-operatives provide members with specialised services, such as horticultural advice, grain storage and handling or irrigation, which are usually not economical for an individual farmer to obtain.

Examples of service co-operatives include Co-operative Bulk Handling Limited (storage and handling) and the irrigation co-operatives Harvey Water (South West Irrigation Management Co-operative Limited), Gascoyne Water Co-operative and Ord Irrigation Co-operative Limited.

Contact information

Brad Plunkett
+61 (0)8 9368 3541
Peter Wells