Abstract: Historically, major agricultural cooperatives in Canada have been intimately involved in commoditypolicy issues. Large cooperatives were created because farmers were upset about the perceived lack ofcompetition in buying farm inputs or selling farm outputs. Often, the resulting cooperative was theorganization farmers saw as the logical organization to represent their view of commodity policy orcompetition policy. As cooperatives grew and diversified, the ability to represent their members coherentlyacross policy issues was hampered. For processing cooperatives in the supply-managed sector,the requirement that the cooperative be the political arm of industry, process product, and provide maximumreturns to producer members made for a complicated objective function. This paper focuses onthe twin objectives of providing efficient member services and performing political lobbying in a publicchoice framework. The results are illustrated by the recent history of a supply-managed further-processingcooperative and a diversified grain cooperative.

Keywords:Cooperatives,commodity policy issues,Canada

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