AEDE 3141 Syllabus. Introductory economic theory course. Building one hour prior to class and by appointment (cell); x113

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1 AEDE 3141 Syllabus Course Information Course title Agricultural Cooperatives Course number 3141 Course description Basic principles of cooperatives including types of organizations, legal aspects, governance, membership relations, debt and equity financing, organizational and inter-cooperative problems, and distribution of earnings. Course Schedule Class meetings Location Meeting day Meeting time Final Exam Date/Time Prerequisite January 8, 2013 through Tuesday April 16, 2012 Note Spring Break schedule - no class on March Kottman Hall Tuesday 10:00 11:45 a.m. Friday, April :45AM Introductory economic theory course Co-Instructor Information Name Office Location Office hours Phone Name Office location Office hours Phone Dr. Thomas Worley worley.36@osu.edu 252 Agricultural Administration Building one hour prior to class and by appointment (cell); x113 Dr. David Hahn hahn.1@osu.edu 252-A Agricultural Administration Building one hour prior to class and by appointment (614) ; (cell)

2 Course goals To provide students with a thorough understanding of cooperatives as a way of doing business, particularly agricultural cooperatives. Key elements of the subject matter include principles of cooperation, types of cooperatives, organizing cooperatives, financing cooperatives, legal dimensions of cooperatives, and taxation of cooperatives. Several resource persons from various cooperatives in Ohio will appear during the semester to provide an inside look at cooperative operations. Textbooks and other course resource material are available at the Carmen course website. Required Reading Cooperatives: An Economic and Management Perspective, David L. Cobia and Bruce L. Anderson, Via Carmen and also online at: g2011/login_page.htm Use the following credentials: Username: aede441 Password: hahn Cooperatives: Principles and Practices in the 21st Century, Kimberly A. Zeuli and Robert Cropp Via Carmen and also online at: DF Originality/Plagiarism Policy Introduction Plagiarism and other forms of cheating will not be tolerated. University rules Provide severe penalties for academic misconduct, ranging from course failure to dismissal from the University.

3 Additional Information University rules are found in the handbook used in all survey courses: University Survey - A Guidebook and Readings for New Students. Course Grading Factors and Weights One Midterm Exam 25% Term Paper 25% Quizzes 15% Class Participation and attendance 10% Final Exam 25% Course Outline 1. Introduction a. Essential cooperative terms and premises b. Scope and size of cooperative business relative to U.S. Economy and Agribusiness share c. Examples of agricultural and non-agricultural cooperatives i. Worldwide ii. Focus on agricultural, financial, and rural electric cooperatives 2. History Principles Structure of Cooperative Businesses a. Historical perspective of cooperation b. The Rochdale principles enduring essentials c. Cooperative ownership/control members, owners, users, board, managers 3. Alternative ways of structuring business entities cooperatives unique a. Sole proprietorship b. Partnership c. Limited Liability Company d. Corporation e. Cooperative a unique corporation with non-excludable benefits 4. Underlying Economic Justification for Cooperatives a. Market failure b. Bargaining market power

4 c. Competitive environment 5. Cooperative Business Management a. Member responsibilities: employee responsibilities b. Board of Directors duties policy c. Manager responsibilities d. Employee service orientation toward members e. Why cooperatives fail 6. Cooperatives and Antitrust Law a. Sherman Act b. Clayton Act non-stock cooperatives c. Capper-Volstead Act of 1922 Section 1, Section 2 d. Judicial interpretations of antitrust exemption e. State Governance of Cooperatives i. Ohio Revised Code Chapter 1729 Charter Law 7. Financial Analysis of Cooperative Business a. Understanding and measuring cooperative returns i. Income statement ii. Balance sheet b. Cooperative financing member equity i. Stock common, preferred ii. Patronage refund allocations paper iii. Revolving funds iv. Per unit capital retains v. Base capital plan c. Cooperatives and borrowed capital i. Farm Credit Administration Bank for Cooperatives ii. Other borrowings 8. Cooperative Taxation a. Single tax concept-corporation vs. cooperative taxation b. Sub-chapter T corporation : qualified allocations c. Section 521 exempt or nonexempt d. Capital retain treatment e. Section 501 provision 9. Cooperative Bargaining activities a. Sources and limits of bargaining power

5 b. Section 2 of Capper-Volstead: Ag Fair Practices Act c. Public s view of cooperatives 10. New Generation Cooperatives a. Innovation/distinction from traditional coops b. Membership and delivery rights c. Financing d. Performance/Success 11. Cooperative Development a. Feasibility of concept b. Business Plans c. Formal Incorporation with state attorney general office 12. Future of Cooperatives a. Performance Structure Mission b. Branding products

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