A co-operative federation or secondary co-operative is a co-operative in which all members are, in turn, co-operatives.[1] Historically, co-operative federations have predominantly come in the form of co-operative wholesale societies and co-operative unions.[2] Co-operative federations are a means through which co-operatives can fulfill the sixth Co-operative Principle, co-operation among co-operatives. The International Co-operative Alliance notes that “Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures.”[3]
According to co-operative economist Charles Gide, the aim of a co-operative wholesale society, which is owned by retail consumer co-operatives, is to arrange "bulk purchases, and, if possible, organise production".[2] The best historical examples of this were the English and Scottish Co-operative Wholesale Societies, which were the forerunners to the modern Co-operative Group.
A second common form of co-operative federation is a co-operative union, whose objective (according to Gide) is “to develop the spirit of solidarity among societies and... in a word, to exercise the functions of a government whose authority, it is needless to say, is purely moral.”[2] Co-operatives UK and the International Co-operative Alliance are examples of such arrangements.
See also: Cooperative banking, Credit union, History of credit unions and European Association of Co-operative Banks.
Regional agricultural co-operatives, such as Land O'Lakes and the former Farmland Industries, are co-operative federations owned by local farmers' co-operatives. Like the Co-operative Group (above), Land O'Lakes is actually a hybrid of a primary and secondary co-operative.[4]
In some countries with strong co-operative sectors, such as the UK, co-operatives have organized parliamentary political parties to represent their interests. The British Co-operative Party is an example of such an arrangement.
Co-operatives whose member owners are businesses, such as retailers' co-operatives, are sometimes called secondary co-operatives, even when their members are not themselves co-operatives.[5]