A new report pinpoints the big financial challenge for many agricultural co-operatives: how to find new sources of capital without compromising their ownership.
The report, from the agribusiness banking specialist Rabobank, said farming co-operatives are increasingly looking for investment money to respond to the rising demand for food and agricultural products.
They are finding their traditional sources of funding, such as retaining funds from earnings or using debt, were not cutting it any longer.
The report's author, Rabobank research director Hayley Moynihan said co-ops are increasingly turning to other sources, such as Fonterra has done with its shareholder fund for outside investors, but that can bring complications.
"Some are looking at more joint ventures or investments in subsidiary companies that may be easier to invest outside capital in.
"Other larger co-operatives are looking at sourcing external capital, whether that's through publicly traded preference shares or tradeable member bonds, or even traded units on a share market."
Ms Moynihan said raising capital is a conundrum for co-operatives because it strikes at the very core of them being member-controlled organisations.
