Argicultural Cooperative Law
![handle is hein.journals/ucollr30 and id is 393 raw text is: AGRICULTURAL COOPERATIVE LAW
RAYMOND J. MISCHLER*
INTRODUCTION
The law of agricultural cooperatives is an evolutionary develop-
ment in the field of corporation law, of which it is a part.' Its evolu-
tion has paralleled the growing use by farmers of the cooperative
form of business structure. Today, it has about reached the stage of
a specialized field in its own right.
Persons organize a cooperative to secure better services, in terms
of quality and cost, than they could otherwise obtain. Their chief
instrument for achieving this purpose is group integration, which is
a source of both bargaining power and efficiency.'2 Farmers, al-
though reared in the tradition of neighbors working together, first
moved rather slowly to cooperation. However, in the twentieth cen-
tury they have turned with increasing momentum to this form of
organization as being particularly well adapted to help meet the
special economic and social needs of the American family farm.
DEVELOPMENT AND SIGNIFICANCE OF AGRICULTURAL COOPERATIVES
IN THE UNITED STATES
Prior to 1870, farms for the most part existed as isolated, dispersed,
economic units. These individual producing units put their products
on the market in small quantities in competition with each other
for the favor of the local commission house or packer with little
special knowledge of market conditions and without adequate storage
or financing facilities. Their farm supplies were purchased in a
market which, by contrast, was substantially concentrated. Despite
a few successful efforts at cooperation, there was no substantial pattern
of utilization of cooperatives by farmers, and thus little agricultural
cooperative law.1
In the years 1871 to 1876, known as the period of Grange stimula-
tion, more than 20,000 local Granges as well as 26 state agencies were
established; these organizations engaged in informal buying and
*Office of the General Counsel, United States Department of Agriculture.
The author wishes to acknowledge the valuable assistance of John F. Donoghue,
A.B., Catholic University, 1951; LL.B., George Washington University, 1955; Mem-
ber of District of Columbia Bar; and attorney, U.S. Dept. of Agriculture, Wash-
ington, D.C.
1. NOURSE, THE LEGAL STATUS OF AGRICULTURAL COOPERATION 8 (1927).
2. Knapp, Are Cooperatives Good Business? HARV. Bus. REV. 57, 58 (1957).
3. The Massachusetts statute of 1866 (Mass. Laws 1866, c. 290) is generally
considered to be the first law in the United States treating specially with the
organization of agricultural cooperatives. For a discussion of this and other early
acts, see HANNA, THE LAW OF COOPERATIVE MARKETING ASSOCIATIONS 26 (1931).
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Argicultural Cooperative Law
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