Cooperatives have a long history, dating back to what many believe is early Indian days. People worked together for the benefit of the entire tribe, so they would have all the basic needs for survival of life- food, shelter, and protection. The collaboration among people continued to develop and grow into what is known as the first cooperative business.
Hannah Scott, CFAES Center for Cooperatives, discusses the early history of agricultural cooperation in the United States.
*View Early History of Agricultural Cooperation Video Transcript
Nationwide Mutual Insurance
In the United States, Benjamin Franklin helped to start the first recognized cooperative business, a mutual insurance company, in 1752. The Mutual Fire and Insurance Company, with the Philadelphia Contributionship was a means to help repair and rebuild houses damaged by fire. Over the last 90 years, Nationwide has grown from a small mutual auto insurer owned by policyholders to one of the largest insurance and financial services companies in the world. Early growth came from working together with Farm Bureaus that sponsored the company, and nine Farm Bureaus continue to promote Nationwide.
Rochdale Equitable Pioneers Society
As we move toward the Modern Era, we find the key moment cooperative principles were recognized, by the International Co-operative Alliance, and the broad cooperative community. This group was generally recognized to have originated from the efforts of 28 working men who founded the Rochdale Equitable Pioneers Society in 1844. These men operated a cooperatively owned store that started out selling butter, flour, sugar, and oatmeal. The Rochdale Pioneers, as they came to be known, were working toward social goals that arose out of the conditions of their time, including harsh working conditions.
Hannah Scott, CFAES Center for Cooperatives, shares the story of the Rochdale Pioneers.
*View Rochdale Pioneers Video Transcript
The original rules of the Rochdale Equitable Pioneers Society included:
- That capital should be of their own providing and bear a fixed rate of interest
- That only the purest provisions procurable should be supplied to members
- That full weight and measure should be given
- That market prices should be charged and no credit given nor asked
- That profits should be divided pro rate upon the amount of purchases made by each member
- That the principle of ‘one member one vote’ should obtain in government and the equality of the sexes in membership
- That management should be in the hands of officers and committee elected periodically
- That a definite percentage of profits should be allotted to education
- That frequent statements and balance sheets should be presented to members
Agricultural cooperatives played an important role in the development of cooperatives in the U.S. with the first ag co-ops beginning operations in 1810 in dairy and cheese making. From 1810 until 1887, cooperatives were founded in many sectors of agriculture, including hog marketing, irrigation, fruit marketing, and cotton ginning, among others. The Grange, one of the first farm organizations in the U.S., organized cooperative development efforts while other farm groups like the American Farm Bureau and National Farmers Union were also instrumental to developing agricultural cooperatives. In fact, Farm Bureau helped to establish Growmark and Nationwide Insurance while National Farmers Union helped to establish CHS, Inc., the largest agricultural cooperative in the U.S. today.
The Grange Movement
The Grange Movement began in the 1860’s, shortly after the Civil War, as a grassroots effort to improve conditions for farmers in the Midwest. This group was a sponsor of “cooperations in all things,” and was the first organization to actively promote cooperative development. The original Grangers, a national farming organization known as Order of the Patrons of Husbandry, and were led by Oliver Kelley, a farmer and agent for the Minnesota Department of Agriculture. Kelley’s goal was to organize farmers to gain greater influence in the industry, bargaining, and purchasing power that would allow them to compete against oppressive monopolies. Grangers purchased machinery and built infrastructure such as grain elevators. They lobbied government for regulatory change to support their operations.
The Grange had a mission to eliminate the costs associated with the middleman by bringing farmers, manufactures, producers and consumers into direct relations, and in 1875 the Grange endorsed the Rochdale Principles. Grange Halls then began popping up in rural communities across America. The halls were a gathering place for business, civic, and political meetings and also became hub for social, cultural, and community events.
Ohio History Central notes that the National Grange was the first male-dominated organization to empower females to become full-fledged members. Youth also actively participated in Grange membership. The modern FFA grew out of the Grange Movement.
The National Grange of the Order of Patrons of Husbandry still exists today. Their mission is to build strong communities through fellowship, service, and advocacy. There are chapters in 37 states with over 150,000 rural members nationwide.