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Understanding the Small Agricultural Cooperative: Definition and Insights
Definition & Meaning
A small agricultural cooperative is an organization formed by farmers or agricultural producers to collectively market their products, share resources, or provide services. These cooperatives operate under the Agricultural Marketing Act and must meet specific size standards set by the Small Business Administration. The cooperative is considered a business entity on its own, meaning it does not count the income or employees of its individual members when determining its size.
Table of content
Legal Use & context
Small agricultural cooperatives are relevant in various legal contexts, particularly in business and agricultural law. They may involve legal documents related to formation, governance, and compliance with agricultural regulations. Users can manage some of these legal processes independently by utilizing templates available through US Legal Forms, which are designed by attorneys to meet specific legal requirements.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A group of local dairy farmers forms a cooperative to collectively market their milk and negotiate better prices with distributors. This cooperative operates under the guidelines of the Agricultural Marketing Act and meets the size requirements set by the Small Business Administration.
Example 2: A cooperative of organic vegetable growers pools their resources to share equipment and reduce costs, while also marketing their produce together. This is a hypothetical example.
Relevant laws & statutes
Key legislation relevant to small agricultural cooperatives includes:
Agricultural Marketing Act: This act provides the framework for the establishment and operation of agricultural cooperatives.
15 USCS § 632 (j): This statute defines the term "small agricultural cooperative" and outlines the size standards applicable.
State-by-state differences
State
Key Differences
California
Has specific regulations regarding organic certification for agricultural cooperatives.
Texas
Offers state-level grants to support small agricultural cooperatives.
This is not a complete list. State laws vary and users should consult local rules for specific guidance.
Comparison with related terms
Term
Definition
Key Differences
Small Business
A privately owned corporation, partnership, or sole proprietorship with fewer employees and lower annual revenue.
Small agricultural cooperatives are specifically focused on agricultural production and marketing, while small businesses can operate in any industry.
Corporation
A legal entity that is separate and distinct from its owners.
Cooperatives are owned and operated by their members, whereas corporations may have shareholders who are not involved in day-to-day operations.
Common misunderstandings
What to do if this term applies to you
If you are considering forming a small agricultural cooperative, start by researching the requirements under the Agricultural Marketing Act and the Small Business Administration's size standards. You can explore US Legal Forms for templates that can help you draft necessary documents. If your situation is complex, it may be beneficial to consult with a legal professional for tailored advice.
Find the legal form that fits your case
Browse our library of 85,000+ state-specific legal templates.
Typical fees: Varies by state and cooperative structure.
Jurisdiction: Governed by federal and state agricultural laws.
Possible penalties: Non-compliance with size standards can lead to loss of cooperative status.
Key takeaways
Frequently asked questions
The primary purpose is to enable farmers to market their products collectively and share resources to reduce costs.
You can determine this by checking if it meets the size standards set by the Small Business Administration and operates under the Agricultural Marketing Act.
Membership is typically open to those involved in agricultural production, but specific eligibility criteria may vary by cooperative.