both crop and livestock operations. Information is

provided through letters, reports and a wide variety

of publications. Producers are encouraged to adopt

sustainable agricultural practices to help maintain

or improve profits, produce high-quality food products and reduce adverse impacts on the environment. Questions can be referred to the ATTRA

Center in Fayetville, Ark., by telephone, (800) 346-

9140, or e-mail, askattra@ncatrak.uark.edu , or the

ATTRA W eb site: http://www.attra.org. 

● National Sheep Industry Improvement Center –

This program uses a revolving loan fund to help

rebuild infrastructure for the Nation’s ailing sheep

and goat industries. The Center has entered into

an agreement with the National Livestock Producers Association to deliver direct loans and loan

guarantees to fund projects – such as livestock

packing and wool processing operations – needed

to strengthen producers’ role in the sheep and goat

industries. The Center does not make ranch or

farm production loans. The Center will be

privatized in 2006.

● Business and Industry (B&I) Guaranteed Loans –

This program provides funds to start or expand

rural businesses that will benefit rural areas, especially in the area of job creation. USDA/RBS works

with local lenders, guaranteeing up to 90 percent of

the loan amount for: buildings and real estate;

machinery and equipment; working capital; or certain types of debt refinancing. Inability to obtain

other credit is not a requirement. Lenders benefit

from the program by having their risk exposure

reduced, allowing the lender the opportunity to provide more rural credit within their legal lending limits. Virtually any legally organized entity can apply,

including cooperatives and individuls. Under

USDA’s B&I Cooperative Stock Purchase Program,

family farmers can use B&I loan guarantees to help

purchase stock in a start-up cooperative that

processes their agricultural commodity into a

value-added product. The co-op must be new – not

an expansion or diversification of an existing co-op

– and producers must meet the USDA Farm Service Agency’s definition of a "family-sized farmer."

● Rural Business Enterprise Grants – This program

provides grants to public bodies, private, nonprofit
Revised, June 2001

The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color,

national origin, sex, religion, age, disability, political beliefs, sexual

orientation or marital or family status. (Not all prohibited bases

apply to all programs.) Persons with disabilities who require alternative means for communication of program information (Braille,

large print, audiotape, etc.) should contact USDA’s TA R G E T Center at 202-720-2600 (voice and TDD).

To file a complaint of discrimination, write: USDA, Director,Office of

Civil Rights, Room 326-W, Whitten Building, 14th and

Independence Avenue, SW, Washington, DC 20250-9410 or call

202-720-5964 (voice and TDD). USDA is an equal opportunity

provider and employer.

organizations, and federally recognized Indian tribal groups to finance development of small and

emerging businesses in rural areas, including

cooperatives. Grants do not go directly to the business.

● Rural Business Opportunity Grants – This program

provides funds for technical assistance, training

and planning activities that improve economic conditions in unincorporated rural areas and in incorporated communities of 10,000 or fewer people.

Cooperatives, nonprofit organizations, public bodies and Federally recognized tribal groups are eligible to apply for grants.

For Further Information...

To learn more about any USDA/RBS program, visit

our Web site: http://www.rurdev.usda.gov . For more

information on Cooperative Services programs, you

may also call (202) 720-7558, e-mail

coopinfo@rurdev.usda.gov, or write: USDA Cooperative

Services, Stop 3250, 1400 Independence Ave. SW.,

W ashington, D.C., 20250-3250. 

For more information on Business Programs, call

(202) 720-7287, or write: USDA/RBS Business

Programs, Stop 3220, 1400 Independence Ave. SW,

20250-3220.
History Capsule of USDA

Cooperative Assistance

Assisting agricultural cooperatives was an informal 

activity within the U.S. Department of Agriculture as early

as 1867.

1901 • Information assembled as reference data on

farmer cooperatives in the United States.

1912 • First official USDA project in agricultural

cooperatives.

1913 • Office of Markets formed, cooperative activity

included.

1922 • Assistance formalized as the Division of

Agricultural Cooperation, Bureau of Agricultural Economics

1926 • Renamed Division of Cooperative Marketing.

1929 • Transferred to Federal Farm Board.

1933 • Transferred to new Farm Credit Administration

(FCA), an independent agency, and later renamed

Cooperative Research and Service Division.

1939 • FCA returned to USDA jurisdiction.

1953 • FCA again became an independent agency but

Cooperative Research and Service Division remained

with USDA and elevated to an agency, Farmer Cooperative Service (FCS).

1978 • FCS combined with Economic Research Service

and Statistical Reporting Service to form a new agency,

Economics, Statistics, and Cooperatives Service (ESCS)

1980 • Cooperative segment of ESCS returned to

agency status as Agricultural Cooperative Service.

1994 • Agricultural Cooperative Service combined with

Rural Development Administration (RDA) as its 

Cooperative Service.

1994 • R D A is merged into USDA’s new, Rural Business–Cooperative Service, part of the Rural Development

mission area of USDA.
Cooperative

Services:

What We Do

H o w We Work

United States Department of Agriculture 

Rural Development

Rural Business–Cooperative Service

CIR 28
What We Do

The goal of the Cooperative Services program of

USDA’s Rural Business-Cooperative Service (RBS) is

to expand knowledge (or intellectual capital) of the

cooperative method of conducting business. The program helps rural residents form new cooperatives and

improve the operations of existing ones. USDA does

this by providing technical assistance, conducting cooperative related research, and producing a wide variety

of information products to promote public understanding

of cooperatives.

RBS is part of USDA’s Rural Development mission

area, which was created in 1994 when USDA consolidated rural economic programs that had previously

been scattered among various agencies. RBS encompasses the former Agricultural Cooperative Service.

For most of the past century, USDA’s cooperative

assistance has been concentrated on agricultural cooperatives. While agricultural marketing and supply cooperatives remain a primary focus of USDA’s efforts, RBS

provides reports and other publications to all types of

rural cooperatives.

What Is a Cooperative?

User-owned cooperatives process and market products,

purchase production supplies or consumer goods, provide

housing and credit, build and operate rural utilities, and

provide other services needed by rural residents. By

working together for their mutual benefit in cooperatives,

rural residents are often able to reduce costs, obtain services that might otherwise be unavailable, and achieve

greater returns for their products. 

Cooperatives, both rural and urban, have been part of

the American economy for more than 100 years. By one

estimate, nearly one-third of the population belongs to

some type of cooperative. Application of the cooperative

business structure in rural economies is virtually limitless. 

Cooperative Development Assistance 

USDA Rural Development provides a wide range of

assistance for people interested in forming new cooperatives. This help can range from an initial feasibility

study to the creation and implementation of a business

plan. Staff includes cooperative development specialists

who do everything from identifying potential cooperative

functions through the development of bylaws and busi-
ness plans. They also provide training for cooperative

directors. 

The goal is to provide a realistic view of what it will

take to make a new cooperative succeed. W ork is also

conducted by cooperative development specialists

located at many of USDA’s state Rural Development

offices. Recent examples of cooperatives USDA has

helped launch include a new turkey processing and

marketing cooperative, pork and beef packing cooperatives, new fruit and vegetable cooperatives and even a

small seafood processing cooperative. 

Technical Assistance

USDA Rural Development provides technical assistance

to existing cooperatives facing specific problems or

challenges. Technical assistance could include helping

a cooperative develop a strategic marketing plan to

cope with new competitive forces, in making a crucial

decision whether to merge or form a joint venture with

other cooperatives, or in finding a way to turn the raw

products of cooperative members into value-added

products. These matters are often life and death issues

not only for a cooperative, but for the rural communities

in which they operate. 

USDA can help improve a cooperative’s business

structure and operating efficiency. This work often

involves an analysis of operations or assessing the economic feasibility of new facilities or adding new products or services. Studies cover the full range of

decisionmaking facing cooperative business enterprises. Technical assistance is largely designed to benefit a

specific cooperative business or group. However, the

results often provide business strategy for all cooperatives.

Research

USDA conducts research to provide the knowledge

base necessary to support cooperatives dealing with

changing markets and business trends. Studies include

financial, structural, managerial, policy, member governance, legal, and social issues, as well as various other

economic activities of cooperatives.

Research is designed to have direct application to

current and emerging requirements of cooperatives. A

major challenge is to analyze industry structure and
cooperative operational practices to determine the

changes required to maintain or achieve a produceroriented marketing system. Recent research studies

have focused on equity redemption plans used by

cooperatives, identification of new niche markets for

cooperatives, and opportunities and obstacles cooperatives face when exporting goods overseas. 

Education and Information

The Cooperative Marketing Act of 1926 mandates that

USDA “promote the knowledge of cooperative principles

and practices and cooperate in promoting such knowledge with educational and marketing agencies, cooperative associations, and others.” To meet this goal,

USDA provides a wide range of cooperative training

programs and educational materials. 

USDA maintains a storehouse of information about

cooperatives which it makes available to the public

through more than 150 research reports, educational

publications and videos which cover all aspects of

cooperative operations. A bi-monthly magazine, Rural

Cooperatives, reports significant achievements by

cooperatives, the most advanced thinking of cooperative leaders, and highlights of agency research, technical assistance, and educational activities.

History and Statistics

Cooperative statistics are collected to detect growth

trends and changes in structure and operations. Data

help identify and support research and technical assistance activities. This information is used extensively by

legislative and executive branches of government in

formulating agricultural and cooperative related policy.

H o w We Work

One specialist or a team may tackle a project. Most

staff members are agricultural economists who have

specialized in cooperative issues, including: cooperative

business organization, cooperative law, finance, marketing, purchasing, international trade, strategic planning, member relations, and education.

Staff members use various data bases, conduct surveys by mail and telephone, and do on-site interviews —

walking in factory and field — to gather information. To

reach an objective, USDA may provide assistance direct-
ly or serve as a catalyst in bringing together the best

available resources. USDA Rural Development works

closely with specialists with other State and Federal

agencies, cooperatives, and other public and private

institutions.

Other USDA/RBS Cooperative Services

Programs ● Research on Rural Cooperative Opportunities and

Problems – This special initiative provides funds for

research into issues that are of critical importance

to cooperatives and their members. Proposals for

these cooperative agreements are sought annually

from institutions of higher learning and nonprofit

organizations. Funds are awarded through a competitive process in which research proposals are

judged based on their potential to yield benefits to

agricultural or other types of cooperatives serving

rural communities. These funds can be used to pay

for up to 75 percent of the cost of the research. 

● Rural Cooperative Development Grant program –

This program provides grants to public, nonprofit

organizations and institutions of higher learning to

establish and operate centers for cooperative

development. The primary purpose of these centers is to provide technical assistance to improve

the economic condition of rural areas through the

development of new cooperatives and improving

operations of existing cooperatives. 

● Value-Added Agricultural Market Development

Grants – This program was authorized by the Agriculture Risk Protection Act of 2000 to encourage

agricultural producers to further refine their products to add value to end users. A second objective

is to establish an information resource center to

collect, disseminate, coordinate, and provide information on value-added processing to producers

and processors. Each of these two objectives has

a separate grant program.

● Appropriate Technology Transfer for Rural Areas

(ATTRA) – This program, first authorized in the

1985 Farm Bill, provides information and technical

assistance to farmers and other rural users on a

variety of sustainable agricultural practices, for

both crop and livestock operations. Information is