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6 Cards in this Set
- Front
- Back
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Key features of traditional cooperatives |
- Open membership - Producer- owned - Low entry fees -No or limited return on capital - No capital gains for members - Capital often not proportional to patronage - Each member has one vote |
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Problems of traditional cooperatives |
- Horizon problem - diffucltly in finding capital for growth - Portfolio problem- diffucltly in rising debt capital - Free rider - Influenced cost problems - control problem- same voting rights |
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New Generation cooperatives (NGC) Definition |
Cooperatives that are structured to deal with the limits and problems of the traditional cooperatives. |
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NGC key features |
- Members supply capital in proportion to patronage - There is potential for capital gain on the shares - There is no substaintial unallocated reserves - Membership and production may be limited - New members have to pay for share of capita - Voting rights will be proportional to patronage and capital - Have contractual rights and obligation to deliver particular quantity and quality of product . High capital requirements to finance growth
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Example of NGC |
Tatua Dairy Cooperative. -Membership is closed -Milk supply entitlements have been allocated to existing members depend on the amount of milk solids produced. -New members can join if they are in the catchment of Tatua and subject to being able to purchase a MSE from existing members. -The MSE constrains the level of growth in milk that can be supplied to Tatua and which will receive the full payout. other examples Fonterra and Ravensdown
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Example of Traditional cooperative |
Westland dairy- Open membership Most of the assets unallocated and there are upper limits to shareholders
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