DEPARTMENT OF AGRICULTURE


 CHAPTER 11
 Cooperative Terms

 The meaning of words and phrases frequently used
 in connection with cooperatives

ASSOCIATION This term is often used to designate
 a farmers' cooperative, society or mutual business.
COOPERATIVE A farmers' cooperative is a group
 of agricultural producers incorporated to provide
 off-the-farm services for the members on a mutual
 non-profit basis. Whatever savings are effected
 through the association are distributed according
 to patronage. There is a wide variety of services
 performed by cooperatives, such as packing or
 canning citrus fruits, handling and marketing vege-
 tables, processing milk, purchasing feed, seed, fer-
 tilizer and other farm supplies. "Association" and
 "society" are often used somewhat interchangeably
 to denote the mutual features of a cooperative.
DIRECTOR One of a board elected by the members
 of a cooperative to direct and manage the affairs
 of the corporation.
DIVIDEND Refers to the rate of return paid by the
 cooperative on the members' invested capital. By
 statute this rate may not exceed 8% and in actual
 practice it usually runs 4% or 5%. It represents a
 "reasonable wage" for capital and not profit on in-
 vestment Distribution made on patronage is often
 called a "dividend" but "refund" is a more accurate
 term.
MANAGER-The executive head of a cooperative, em-
 ployed and directed by the board of directors and
 accounting to the board.
MEMBER The term "member" shall include actual
 members of the associations without capital stock