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Corn+Soybean Digest

Ag Co-ops Reign In Brazil

The first time I visited Brazilian agricultural cooperatives, I thought I must have taken a wrong turn. Far from the sleepy "feed and seed" places I was used to, these were often huge, integrated operations, stuffed with roaring machinery tended by dozens of workers.

Brazilian ag co-ops produce, distribute and market their own national and regional brands of cooking oil, milk, meat, coffee, sugar, cotton and silk fibers and other products. Many times, they're involved in each step of the production chain, from technical assistance and inputs all the way to stocking store shelves.

Brazil's first ag co-op, Cooperativa Santa Clara Ltda., was founded in 1912 in the southern state of Rio Grande do Sul. Today, the Brazilian Cooperatives Organization (OCB) says that some 1,400 ag cooperatives across the country serve an average of 607 members each, and support 108,831 permanent jobs. In Brazil, says OCB, ag co-ops handle up to 30% of total national production of foods, and detain 35% of the nation's total grain storage capacity. Brazilian ag co-ops are often big business.

It's not just the commercial side of the business that's executed on such grand scale. The mandate of co-ops in Brazil is wide. Aside from the traditional function of buying inputs in quantity in order to pass savings on to members, and reselling members' production to cut out the middleman, Brazilian ag co-ops often take on a larger role, says OCB Superintendent Valdir Colatto.

"There are many cooperatives ... that play the role of the state, providing medical and social assistance and even education," he says.

Because co-ops are founded to serve the interests of local groups of members, each one is different. Some exist only to eliminate the middleman on purchases and sales of inputs and crops. Others maintain computer literacy programs, and even supply ag extension for members. But a quick look at a couple of ag co-ops in southern Brazil, where the co-op movement first took root, gives a pretty good idea of what the ag co-ops are doing.

Take Cooperalfa. Founded in 1967 with 37 members, it today boasts 10,100 members in 350 rural communities across the state of Santa Catarina. Cooperalfa handles just about everything to do with its members' production of soybeans, corn, dry beans, wheat, oranges, hogs, milk and broilers. In doing so, the co-op provides its members with programs involving technology transfer, farm management, animal health and reforestation, aside from maintaining test plots for new varieties and ag chemicals.

The Cooplantio cooperative, meanwhile, was founded in 1990 with 27 members who were growing no-till soybeans. Today, it serves 11,000 members growing soybeans, corn, wheat and rice. It makes a team of agronomists available to members and sponsors more than 300 field days a year in order to keep members up to date on the latest production techniques.

"In most cases, the farmer knows very well how to plant and harvest. But when the question turns to buying and selling, he's not the most experienced person available," says the OCB's Colatto. "So through this assistance, the co-op allows the producer to buy and sell better, and the dividends are passed on to members."

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