The ownership and governance models of agricultural cooperatives in Estonia

What is it about?

Agricultural cooperatives have been extremely successful at producing and bringing food to billions of consumers around the world. Arguably, such success is caused by their superb ability to constantly adapt to the changing needs of their members and consumers. They do this by slightly modifying (tinkering) or completely altering (reinventing) their organizational design. This issue has not been studied in the context of agricultural cooperatives in former Soviet countries. Given the rising importance of agricultural cooperatives in such countries, however, understanding how cooperative adapt to the evolving preferences of their members and customers becomes of utter importance for both cooperative practitioners and policy makers. The current paper addresses the abovementioned knowledge gap. In particular, it identifies the ownership and governance models adopted by Estonian agricultural cooperatives, and provide key insights into how these organizations adapt to the changing needs of their members, consumers, and their external environment. Estonian agricultural cooperatives exhibit little experimentation with non-traditional ownership and governance models. This is due to the lack of technical expertise in the country, the relatively small size of the country's agricultural cooperatives, and their predominantly defensive strategies. Similarly to other European countries, tinkering is of outmost importance for Estonian agricultural cooperatives.

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Why is it important?

Agricultural cooperatives are key players in the agri-food supply chains in all countries with an advanced agri-food sector. In Estonia, modern cooperatives have been formed since the country gained its independence in 1991. This paper represents the first attempt at delving into the organizational design of Estonian agricultural cooperatives and understanding their potential for Estonian and European agriculture..