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Cooperative Law in Misssissippi

Posted by shelby on February 24, 2014

By Luke Lundemo, Rainbow CEO

Lawmakers in Mississippi did not get a chance to vote this session to expand the current statute on Cooperative businesses in the state. The bill died in committee. As of now only agricultural and electrical cooperatives are allowed to operate but there are several other forms of business cooperatives that cannot be used due to outdated language in the legislation.

Expanding the use of the cooperative business model would put Mississippi in the company of the majority of states that have adopted these business models long ago. Allowing full use of the cooperative model of business organization gives Mississippi a brighter economic future. In simplest terms cooperatives are people coming together to form an independent business entity to serve the needs of the collective membership, customer base, and/or employees. Cooperatives provide flexibility to respond to the changing needs of their members. Most often, new cooperatives are formed when the marketplace fails to provide needed goods or services at affordable prices and/or the quality that individuals or businesses require. Today, one of every three Americans is a member of at least one cooperative. Some well-known examples of cooperatives include Ace Hardware, Associated Press, credit unions – like Hope Credit Union, food cooperatives – like Rainbow Natural Grocery Cooperative, REI and Mississippi rural electric cooperatives.

Cooperatives are unique in that they all embody these seven principles:

• Voluntary and Open Membership
• Democratic Member Control
• Member Economic Participation
• Autonomy and Independence
• Education, Training and Information,
• Cooperation Among Cooperatives and
• Concern for Community.

This means that anyone can join a cooperative and everyone has a say in how the business is operated. Co-op’s also provide education and training to members concerning various topics which help improve the cooperative. All cooperatives work with and support other cooperatives and provide assistance when necessary. Co-ops place a high importance on being involved with the community and help resolve issues that citizens are facing.

There are four types of cooperatives: producer cooperatives, purchasing and shared services cooperatives, consumer cooperatives, and worker cooperatives.

• Producer cooperatives are owned by people who produce similar types of products and come together for support, stability and economic advantage.
• Purchasing and shared services cooperatives are owned and governed by independent business owners that join together to enhance their purchasing power and lower their expenses for goods and services.
• Consumer cooperatives are owned by the people who buy the goods or use the services of the cooperative. This is a way that consumers can insure they are purchasing the kinds of goods that they want as well as paying reduced prices at a group rate.
• Worker cooperatives are owned and governed by the employees of the business.

Cooperatives serve both rural and urban America. Below are some examples of the wide-ranging types of services provided by today’s cooperatives:

• Rural and urban housing
• Business services (personnel and benefits management, insurance, legal and professional)
• Group purchasing of goods and services (food and groceries, healthcare, childcare, equipment, hardware, farm supplies)
• Personal and business credit (banks and credit unions and agricultural credit (Farm Credit System)
• Rural and urban energy and communications (electricity, natural gas, fuel oil, telephone, cable TV, internet, satellite)
• Production and marketing of products (agricultural and non-agricultural); as well as funeral and memorial service planning.

Providing a way to have these services while maintaining local control and keeping all the profits circulating in the neighborhood is important for any community.

For more information concerning the Cooperative Law Reform Bill please contact the Coalition for a Prosperous Mississippi (601-932-4778) or please call your local house and senate representatives and express your concern for the passage of this bill. This bill supports and empowers Mississippi citizens, keeps more money in our communities and provides revenue for the state from fees and an expanded tax base.