Introduction to Agribusiness

These flashcards cover key concepts from the lecture on agribusiness and agricultural cooperatives, facilitating review and exam preparation.

What are two reasons farmers organize cooperatives?

To fulfill mutual economic needs and to gain more control over farm supply purchases and commodity marketing.

What is the definition of the commodity sector?

The set of activities associated with the production and marketing of a commodity, from input supply to final consumers.

What is vertical integration?

It occurs when a business extends its operations into other levels of a commodity sector.

What is the difference between a centralized cooperative and a federated cooperative?

A centralized cooperative consists of individual farmers, while a federated cooperative consists of local cooperatives that have individual farmers as members.

What are the four basic category functions of cooperatives?

Marketing, Bargaining, Purchasing, and Service.

What are the preliminary steps in developing a cooperative?

Recognize a need, sign up members, obtain capital, draft legal papers, file incorporation, arrange the first meeting, and elect a board of directors.

What are the responsibilities of a cooperative director?

Decide operating policies, adopt plans, hire the manager, ensure policy execution, and manage member acceptance.

How do marketing cooperatives function?

They perform functions necessary to get a product from the grower to the consumer, including assembling, grading, and selling.

What is a bargaining cooperative?

A cooperative that allows farmers to negotiate as a group to centralize and enhance their market power.

How do supply cooperatives contribute to farmers' income?

By achieving lower prices for farm inputs through pooled purchasing power or by manufacturing farm inputs.

What are patronage refunds in cooperatives?

Savings made during the year returned to members in proportion to their patronage.

What is a marketing contract in the context of cooperatives?

A mutual agreement where the grower delivers all produced commodity to the cooperative for processing and selling.

What is pooling in agricultural cooperatives?

The averaging of net returns to producers based on the grade and quantity delivered during a specific time.

What principles guide cooperatives?

Most are based on one person, one vote, with limited interest rates on revolving funds, and operate at cost-of-service.

What factors contribute to the success of cooperatives?

Good management, adequate capital, strong member support, sound legal organization, and effective board operations.

What is the role of federal legislation concerning cooperatives?

To clarify farmer rights to process and market collectively without violating antitrust laws and providing borrowing authority.

What is the role of the Agricultural Cooperative Service?

Part of the USDA, it provides educational outreach to cooperative directors, members, and management.