Question 1

What is a Cooperative (co-op)?

Accepted Answer

A Cooperative is a legal structure for a business which brings together multiple people or businesses as shareholders, who own and control the Cooperative and where benefits are derived and distributed equitably back to shareholders.
 
Shareholders own the Cooperative, have a say (one member has one vote) in how its run and share in its profits. The Cooperative business model brings businesses or individuals together to gain the benefits of using their combined buying power to negotiate better deals for members.

Question 2

How do I benefit from being a member of the Co-op?

Accepted Answer

In a cooperative, we are not just consumers or members, we are also owners.
A co-op operates for the benefit of its owners and community. As a Consumer & Producer cooperative, the Ujamaa Co-op is very different from privately owned membership-based stores which charge annual fees in exchange for a discount on purchases. These stores or supermarkets are not owned or governed by the "members" or buyers and the profits of the business go to the investors, not the members.
At the Co-op, your membership fee is in the form of shares. You buy a legal equity share and further support the business through shopping at the co-op. This investment of capital allows the Co-op to set up the retail outlet, buy inventory from farmers and have working capital to pay monthly expenses.  
At the Co-op, members own the business and transactions lead to profits that benefit the local community. Because you own the Co-op, you are entitled to share in the profits in the form of dividends and in some cases a patronage refund/rebate.
A dividend represents a return of a portion of the profits made by the Co-op and is determined by the Board of Directors. The dividend paid to each member is based on how many shares each member holds in the Co-op.
Patronage refunds/rebates are given based on a proportion of profit made by the business.  Once this amount is determined, the refund is calculated according to how much each member has spent during that fiscal year at the Co-op.
Patronage refunds are based on how much you purchased during the rebate period, not on how much you invested. The more goods you purchase at the Co-op, the more you benefit if a patronage refund/rebate is allocated by the Board.

Question 3

How do Consumer-members maximize their benefits from being a member of the Co-op?

Accepted Answer

As a Consumer-member: you can maximize the benefits  from your Cooperative shareholding via:
The preferential pricing (up front discount) that the co-op negotiates with our producer-members and
The end-of-year rebate out of the profits of the Cooperative.
Buying from yourself! This increases the profits and increases the patronage rebate paid at the end of the year to member-owners.
It is not mandatory for you to be exclusive to our producer-members in ordering from the Co-op but, in essence, the more you support the producers, the greater the benefits you will receive.

Question 4

How do Producer-members maximize their benefits from being a member of the Co-op?

Accepted Answer

Producer-members benefit in the same way as Consumer-members and they  also benefit from being the exclusive Producers of the Co-op.
As a Producer-member: you can maximize the benefits  from your Cooperative shareholding as follows:
One key benefit for farmers joining the Co-op is that farmers will be offered off-take Agreements. These are guaranteed contracts with the Co-op to take specific amounts of certain produce from each farmer. Farmers can then plant and grow according to the contract that they have, with the certainty that they will be able to sell that produce to the cooperative - a reliable and consistent market!
The marketing that the co-op does for its producers. Marketing is a specialized function and farmers are not necessarily marketing specialists. Farmers want to concentrate on their core activity which is growing and producing nutritious food. Many farmers find themselves caught in the boom and bust cycle, when the produce becomes plentiful the price goes down so low the farmers lose on the crop that they have taken care of for weeks and brought to market. Other times they are from supermarket backdoor to backdoor trying to get the produce sold and there are no takers.
Bulk Purchase of Inputs
Inputs are crucial and the retail cost of inputs keeps rising.Operating as a cooperative means being able to negotiate discounts on bulk purchases from suppliers. Producers may be able to source certain inputs from overseas but will only be able to do so if they buy in minimum quantities or in bulk as a cooperative.
Unity is strength - operating as a cooperative gives farmers a strong unified voice in making representation to a wide range of stakeholders, be it suppliers, local or overseas, consumers or various government departments. As a cooperative, we come to realize that the whole is greater that the simple sum of the parts.
Expert Extension Service:
Sometimes farmers struggle to get yields up or with how to keep pests away without spending more money that they can hope to recoup from the Crop. Sometimes there are simple changes that make a big difference along the entire process of the crop cycle but those techniques or enhanced operations require advice from experts. As a collective group under the Co-op, producers are better positioned to source and get extension services to resolve problems and improve production yields.
The end-of-year rebate out of the profits of the Cooperative.
Buying from yourself! This increases the profits and increases the patronage refund paid at the end of the year to member-owners.

Question 5

How much does it cost to become a member of the Co-op?

Accepted Answer

Each member is required to pay an application processing fee of $25 and buy 5 qualifying shares as well as 5 ordinary shares. This is a total of $75.
This is the only cost related to your investment in the shares, an investment you should get back in cost savings in a very short timeframe.
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In order to maintain our operations and expand, there is an annualrequirement to purchase 10 ordinary shares ($50) - an additional investment that entitles you to a higher portion of  profits/surplus distributed in the form of  dividends.

Question 6

What is a Patronage Refund? When and how is it calculated?

Accepted Answer

Patronage refunds/rebates are paid by the Co-op to its members and is a proportion of the profit (surplus) made by the business.  Once this amount is determined, the refund is calculated according to how much each member has spent during that fiscal year at the Co-op.
Patronage refunds are based on how much you purchased during the rebate period, not on how much you invested. The more goods you purchase at the Co-op, the more you benefit if a patronage refund/rebate is allocated by the Board.

Question 7

Who controls the Co-op?

Accepted Answer

Co-ops are controlled by their members.
What makes co-ops different from other businesses? What sets them apart?
One trait that makes a co-op a co-op is that every member gets one vote on important issues. In co-op circles this is known simply as “one member, one vote”.
Other types of corporations often provide shareholders more votes if they own more shares in the company. Co-ops don’t allow for this type of voting. Whether you’ve bought a $1,000 investment share or a $10 membership share, you have the same amount of influence on the co-op’s decisions: one vote.
Why is this so important to the co-op structure? The one member, one vote system helps ensure a co-op acts in its members’ best interests.
Members elect a Board of Directors who manage the day-to-day operationsof the Co-op. The Co-op is legally required to have an Annual General Meeting of its members at which which major decisions are made. including the election of the Board of Directors and of the Supervisory Committee.

Question 8

How does our community benefit from the Co-op?

Accepted Answer

Benefit #1: Co-ops ensure that the people who generate the profits (Consumers and Producers) benefit from those profits.
Benefit #2:  Co-ops circulate dollars within our own community
Co-ops keep more money in our local economy, increase the market and access for locally produced food, and prioritize business practices that are good for our own community.
Benefit #3: Co-ops build up our community
Instead of focusing on building a profit for private investors, co-ops focus on our community — circulating dollars within our community, donating to the community and acting in our interests and our community.
Cooperation builds strong bonds between the people who supply products and the people who use them. By their nature, co-ops offer a way to transform the way business is done.
Benefit #4: We influence government policies that affect production and consumer interests in our community.
Bebefit #5: Through the Co-op, we have a bigger voice. We join our collective voice and keep our community’s family farms and small producers from being run over by big business interests.
Benefit #6: We get bigger discounts. Through the Co-op, our producers as a group can negotiate bigger discounts for their inputs and therefore pass those savings on to our Consumer-members.
Benefit #7: Education, training and information
Co-ops provide education and training to owners, elected representatives, managers, and the general public.

Question 9

What are the By-laws of the Co-op?

Accepted Answer

Our bylaws serve as rules governing the procedures of the Co-op. They are written to provide directors and members with definitions of organizational procedures, rights and responsibilities.
 
A copy of the by-laws may be obtained by each member by logging into your member area on this webiste.

Frequently asked questions