Evan Murray – The new General Manager of the CDRQ
Actualité
Article
•May 14, 2024
•1 minute read
Producers Cooperative: Definition, Operation and Advantages
Coopérative
Kickoff
Do you have a project with an economic and social vocation? The cooperative
formula marries democracy and efficiency, equity and competitiveness.
The producers cooperative may be an appealing legal framework if you want to build a strong
and unified network.
What is a producers cooperative?
Producers cooperatives bring together individuals and/or legal entities who benefit by
obtaining from their cooperative the goods and services they need to exercise their
profession or operate their business. The aim of this kind of co-op is first and foremost to
create a shared structure, to purchase equipment and to process, distribute or sell
products.
The members of this type of organization can therefore be service providers (e.g. cab
drivers) and producers of goods (e.g. farmers). This business model is effective in areas as
varied as agriculture, agri-food, group purchasing, taxi services, the use of agricultural
equipment, professional services and more.
Have you ever heard of Citadelle? This Quebec-based producers cooperative promotes and
markets maple, honey and cranberry products. It carries out collection, storage, marketing
and worldwide export activities.
Examples of producers cooperatives
Producers cooperatives play an essential role in various sectors in Quebec by pooling
services and facilitating the marketing of their members’ products. For example, the
Regard-Action cooperative brings together opticians and optometrists across Quebec. This
producers co-op not only pools purchasing, it also offers its members a variety of services,
thus reinforcing solidarity and efficiency in the profession. Another notable example is the
Montréal-based craft cooperative L’Empreinte, which recently celebrated its fiftieth year of
operation. This co-op provides craftspeople with a venue to sell their work. Its boutique in
Old Montréal and an online catalogue facilitate its artist members’ access to a broader
market. As a final example, La Guilde du jeu vidéo du Québec perfectly illustrates the
advantages of this business model. This producers co-op brings together independent
video-game studios, enabling them to share services and strengthen their competitiveness in
a rapidly expanding market.
In short, these examples demonstrate the scope and diversity of producers cooperatives that
contribute to economic growth and innovation in their sectors.
Agropur: Snapshot of a producers cooperative
Agropur perfectly exemplifies the producers cooperative concept. Collectively owned by 3,000
dairy farmers who sought to add value to their operations, this cooperative is widely known
for its success in Quebec. As North America’s leading dairy-processing cooperative, Agropur
has garnered an enviable position in the food industry and has become one of the world’s
leading players. This remarkable rise testifies to the strength and collective vision of
producers cooperatives.
Les Libraires: A producers cooperative
Les Libraires is an exemplary model of collaboration in the bookselling industry. The
Librairies indépendantes du Québec cooperative gathers together more than 120 independent
bookstores in Quebec, the Maritimes, Ontario and Manitoba under the Les Libraires
banner. The cooperative’s underlying mission draws its strength from proximity, diversity
and service. As independent entities with no more than five outlets each, the member
bookstores are free of the structures of commercial chains and therefore each able to
cultivate their own identity. These members are committed to books, readers and a dynamic
literary community.
Furthermore, its members joined forces to overcome the challenges of the digital age. By
sharing production resources, such as promotional efforts and marketing costs, they carved
out a strategic position in the online market, notably through their common platform, leslibraires.ca. This initiative is much
more than a website: it’s a collective response to competition from the online retail
giants. By pooling the development and maintenance costs of a digital platform, members
benefit from cutting-edge technology without incurring prohibitive costs for their
individual businesses. By joining forces, Les Libraires members have demonstrated that
cooperation is an effective weapon against the industry’s behemoths, while also preserving
the very essence of independent bookshops.
How a producers cooperative works
In this type of organization, members share the production resources they require for their
professional activities. Practically speaking, this can mean pooling or sharing rental
space, promotional efforts, marketing expenses, supply agreements and much more. The
Cooperatives Act stipulates that a minimum of five founders
(individuals, corporations or other forms) is required to create and legally incorporate a
cooperative.
The producers cooperative is also characterized by threefold member participation:
- Participating economically: Members contribute
equitably to the cooperative’s capital. Membership fees vary according to individual needs
and financial capacities. - Sharing power: The “one member, one vote” rule
specific to the cooperative model applies regardless of the number of shares held by a
member or the volume of business they do with the cooperative. In addition, positions on the
board of directors are open to all members, offering a meaningful and equal opportunity to
take part in co-op governance. - Benefiting from surpluses: Surpluses are allocated to
the cooperative’s reserve, either to consolidate its financial situation or to be used for
development. Members can also decide to redistribute some surplus earnings in the form of
patronage dividends.
The advantages of the producers cooperative
Producers cooperatives offer their members many advantages:
- Increasing profit margins
By joining forces in a cooperative, producers can leverage greater negotiation power. This
strengthened position can lead to market conditions that are more advantageous, often
translating into increased profit margins for each member.
- Reducing costs
By sharing resources and operating costs, such as facility rentals, marketing expenses and
administrative fees, co-op members can reduce their individual operating expenses. Sharing
expenses optimizes each member’s economic efficiency.
- Leveraging a structure that combines profitability with a social
mission
Producers cooperatives are often formed with a twofold aim. They are intended to generate
profits and to foster collective well-being.
- Providing access to tax incentives that promote
capitalization
Cooperatives enjoy tax incentives intended to support their creation and development. Taking
the form of federal and/or provincial tax deductions, these incentives strengthen
cooperatives’ ability to capitalize and invest in their future growth. By choosing to join a
producers cooperative, members maximize the impact of their own business. The cooperative
thus becomes a natural extension of the individual company, offering an efficient, mutually
supportive network to reach shared goals.
In short, producers cooperatives are an organizational structure in which people and
companies come together to reap common benefits. By purchasing the goods and services they
need for their businesses from the cooperative, members can reduce their costs and increase
their profit margins. These members also participate in a structure that combines economic
profitability with a social mission.
In conclusion, this post is part of a series exploring the five types
of cooperatives. Our aim is to explain the specific features and advantages of
each cooperative model, be it producers cooperatives or
- Worker cooperatives
- Solidarity
cooperatives - Worker shareholder cooperatives
- Consumer
cooperatives
In exploring this series, you’ll discover the many facets of these organizations as well as
their positive impact on communities and the economy as a whole. If you’d like to learn more
about the other types of cooperatives, check out the corresponding posts!
