Chapter 7 - Legal Frameworks and Property Rights in U.S. Agricultural Cooperatives: The Hybridization of Cooperative Structures

Summary

The legal and organizational evolution of the dominant current means of agricultural producer collaboration in the United States can be divided into three distinct periods: pre-1925; 1925 to 1985; and post-1985. Alternative ownership forms, for example, investor-owned, patron-owned, or mutual firms, are characterized by the way property rights are assigned to owners. Chaddad and Cook propose a typology of discrete organizational models, in which the traditional cooperative structure and the investor-oriented firm (IOF) are characterized as polar forms. Additionally, they identify five nontraditional cooperative models that user-owned organizations may adopt to ameliorate perceived financial constraint problems. The legal diversity and complexity in state incorporation laws of the United States have led to a multiplicity of organizational forms that primarily differ in the residual claims legal domain. Consequently, most of the observations address the remnant of the hybrid form.