January 4, 2022
As its name implies, a cooperative, or co-op, is an enterprise owned and operated by its members. In simple terms, it’s a people-centered business based on the principle that the power of the group is stronger than the power of the individual.
For smallholder farmers across the world, cooperatives are vital to building profitable livelihoods and strengthening local food systems. In an agricultural co-op, farmers pool their resources, like money, labor and knowledge, and have greater access to markets, training and financial tools, such as loans. Working together also reduces operational costs by enabling individuals to collectively buy supplies, like livestock feed or seeds, in bulk at reduced prices.
Cooperatives also promote a more equitable world by creating opportunities for people to participate in their communities, start and grow businesses and achieve lasting economic stability.
In the work to eradicate rural poverty, cooperatives feature heavily in many of the United Nations’ Sustainable Development Goals. The member-driven enterprises have the potential to promote the fullest possible participation in locally led economic and social development across the globe.
Cooperatives take many forms — and names, like farmer producer organization or association supply cooperative — depending on the communities in which they operate. As an umbrella term, Heifer refers to agricultural co-ops as farmer-owned agribusinesses, or FOABs.
For smallholder farmers across the world, cooperatives are vital to building profitable livelihoods and strengthening local food systems. In an agricultural co-op, farmers pool their resources, like money, labor and knowledge, and have greater access to markets, training and financial tools, such as loans. Working together also reduces operational costs by enabling individuals to collectively buy supplies, like livestock feed or seeds, in bulk at reduced prices.
Cooperatives also promote a more equitable world by creating opportunities for people to participate in their communities, start and grow businesses and achieve lasting economic stability.
In the work to eradicate rural poverty, cooperatives feature heavily in many of the United Nations’ Sustainable Development Goals. The member-driven enterprises have the potential to promote the fullest possible participation in locally led economic and social development across the globe.
Cooperatives take many forms — and names, like farmer producer organization or association supply cooperative — depending on the communities in which they operate. As an umbrella term, Heifer refers to agricultural co-ops as farmer-owned agribusinesses, or FOABs.
[VIDEO: https://www.youtube.com/watch?v=sdMZ_HCAGO4]
Farm work is intensive, and it’s especially arduous for solo laborers who spend long hours rearing animals or growing crops for minimal returns. Farmers working alone often have little access to high-quality seeds and supplies, a lack of financing to expand, and limited training — frequently relying on knowledge learned from the previous generation.
A co-op works by enabling individual farmers to overcome these barriers and operate as a collective agribusiness or business entity. Members share decision-making and manage resources together, creating a stronger foundation for success.
In places where there is potential for stronger cooperative networks to take root, Heifer begins by encouraging individual farmers to form self-help groups, smaller collectives of 15-25 people, where they receive training on financial resources, saving and lending, business management and values such as nutrition, gender equality and improved animal and resource management.
Sitting together and planning their futures in these groups builds social capital — a trust and shared sense of community between members. They’re no longer individual families struggling to sustain themselves on limited agricultural production; they’re a group, bonded by a feeling of belonging and a shared vision.
“When we work as a group, there is really nothing at all that we can’t do,” said Shanti Tamang.
Agricultural cooperatives go beyond resource sharing to create opportunities for smallholder farmers to participate in food systems, earn more income and thrive. Through a co-op, farmers can secure access to larger markets, reliable buyers and fair prices that would be difficult to achieve alone.
The International Labor Organization reports that cooperative membership can increase the price farmers receive for their products by as much as 24 percent at the point of sale, often referred to as the “farm-gate price.” This refers to the amount paid to farmers when they sell their products directly from their farms, before additional costs like transport and distribution.
For example, in Tanzania, Heifer-supported dairy farmers deliver milk to cooperative-run collection centers, reducing spoilage and increasing access to reliable buyers. Through the Tanzania Milk Processing Project from 2015 to 2020, these hubs helped 54,072 smallholder farmers boost formal milk collection and increase their monthly household income by 36 percent.
Cooperatives also strengthen rural communities by promoting sustainable agriculture and full social participation, creating more opportunities for women, youth and other underrepresented groups to participate in business and decision-making. Together, members work to build resilience through better economic stability and the implementation of climate-smart farming methods. These efforts align with global development priorities as recognized by the United Nations, which declared 2025 the second International Year of Cooperatives in celebration of their role in reducing poverty and creating lasting change.
The global cooperative movement is no small phenomenon. There are 3 million cooperatives on Earth, involving at least 12 percent of the world’s population, according to the International Cooperative Alliance. For farmers, the impact is even more tangible.
One example of an agricultural cooperative is the ADIRA Cooperative in northern Alta Verapaz, Guatemala. Working as a collective puts the power in its members’ hands while honoring their Mayan Q’eqchi’ heritage. Formed by Indigenous cacao and spice farmers, ADIRA built local processing facilities to prevent having to send raw cacao abroad, keeping more of the value within their communities. As Guatemala has become the world’s third-largest producer of cacao, ADIRA plays a key role in continuing this legacy.
Another example is the Kwera Youth Oilseed Farmers’ Cooperative in Northern Uganda, which demonstrates how agriculture can change lives for young farmers and their families. Through Heifer Uganda’s Learn for Agribusiness project, young farmers united to produce oilseeds such as sunflowers, soybeans and groundnuts — high-demand crops that improve both food security and income. Members of the cooperative gained tools, training and market access to overcome barriers such as limited resources and poor infrastructure. Across the region, the cooperative’s 3,792 members continue to achieve economic stability through collective action.
Similarly, the Chhatre Deurali Social Entrepreneur Women’s Cooperative in Nepal is proving that women can be entrepreneurs and agents of change. What started as 11 self-help groups has grown into a formal cooperative supporting more than 1,100 women with savings, loans and agricultural assistance. Their efforts have built a capital fund of 70 million Nepalese rupees, about $503,000, which members have used to expand goat farming, increase vegetable production and start other small businesses.
“When we work as a group, there is really nothing at all that we can’t do,” said Shanti Tamang, the cooperative’s manager.
Investing in women is one of the most effective ways to end hunger and poverty. Agricultural cooperatives provide opportunities for women farmers to access resources typically unavailable to them — such as financial services, technical training and formal markets — and build profitable livelihoods. When women gain control over their assets and incomes, they are empowered to reinvest in their families and communities, improve household nutrition, access healthcare and send their children to school.
In Nepal, for example, the women of the Bihani Dairy Cooperative united to address a shared challenge by converting a vegetable collection center into a dairy facility to reduce spoilage, secure fairer prices for farmers and reinvest profits into local projects and low-interest loans. Their efforts not only addressed the issue but also led to greater opportunities for their community. Today, the cooperative reinvests most of its earnings into local projects and uses funds to offer low-interest loans to farmers who need extra support.
“We realized that we couldn’t work singlehandedly, that we had to work together,” said Tulsi Thapa, chairperson of Bihani Dairy. “We got to know our sisters. It unites us.”
As farmers grow older, fewer young people are stepping in to take their place. The work is demanding, the returns are uncertain, and challenges like climate change, outdated practices and limited access to land and tools make it even harder to earn a reliable income. With fewer prospects in rural areas, many young people leave for cities in search of work, shifting global food production to an increasingly unstable footing while adding pressure to urban economies.
Agricultural cooperatives offer a different path. According to the Food and Agriculture Organization, these farmer-led businesses connect young people with land, financing, training and technology — resources that would otherwise be out of reach. With the right support, farming becomes profitable, offering young people a future in agriculture and a way to strengthen their communities.
In Uganda, the Kwera Youth Oilseed Farmers’ Cooperative is a clear example of how cooperatives unlock potential for youth in agriculture. Through the co-op, members have secured better prices for their crops, built stronger incomes through collective bargaining and eliminated middlemen by selling directly to buyers. Storage and processing facilities also give them more control over their harvests, ensuring fairer prices and greater financial stability.
Among them is 28-year-old Ambrose Omongi, who once struggled to earn enough to support his family. “I received 5 kilos of sunflower seeds, each valued at 60,000 Ugandan shillings, about $16, per kilo, which I planted,” he said, explaining the seeds distributed to him by his cooperative on loan. “[Then] I sold my sunflower produce to the cooperative.”
With his extra earnings, he bought a motorcycle to earn additional income as a taxi driver and purchased a plot of land to expand his maize farming. He’s now one of more than 3,700 young people in the Kwera Youth Oilseed Farmers’ Cooperative, showing that agriculture, when supported through the right cooperative model, can be a viable and profitable career.
Farming is getting more complex. Unpredictable weather, rising temperatures and depleted soil make it harder to grow food and earn a decent income. Smallholder farmers often feel the impact the most, yet they also hold the key to a more sustainable future. With the right support, they can adopt practices that protect the land, improve productivity and secure the future of farming.
That’s where cooperatives come in. By working together, farmers gain access to climate-smart techniques, financing and infrastructure that reduce waste and increase efficiency. Cooperatives can also create networks that accelerate change, which makes it easier to scale regenerative agriculture and other sustainable methods.
Heifer International strengthens this approach by ensuring cooperatives have the tools and knowledge to build climate resilience. In Nepal, Heifer-supported cooperatives trained farmers in the Mid-West Hills region on climate-smart goat farming practices that reduced greenhouse gas emissions intensity by as much as 78 percent. Farmers now grow high-quality fodder, manage manure efficiently and use improved livestock breeds to increase productivity while lowering environmental impact.
Meanwhile, in Honduras, dairy cooperatives have restored degraded pastures and planted native species, reducing carbon emissions by 37 percent. Farmers have also established live fencing — rows of trees and shrubs that serve as natural barriers instead of traditional wire fences — and expanded reforestation efforts to strengthen biodiversity and increase productivity. Cooperative models make these solutions accessible to more farmers to ensure sustainable practices take root at scale.
Supporting agricultural cooperatives is at the heart of Heifer’s locally led development approach.
Across Asia, Africa and the Americas, Heifer works alongside farmers to form self-help groups, producer organizations and cooperatives, supporting them as they identify challenges and develop plans to strengthen their businesses and communities. Through training, market access and financial resources, Heifer equips these groups with the tools to increase profits, improve food security and achieve the goals they set for themselves.
In fiscal year 2024 alone, Heifer-supported co-ops and other business entities generated $76 million in total sales, working with 31,284 active entity partners, including self-help groups, farmer-owned hubs, private enterprises and public institutions.
Grounded in solidarity, reciprocity and democracy, cooperatives create lasting change — lifting families out of poverty and opening doors to dignified lives.
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By Heifer International | December 2, 2021
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