Bonusz Agro Cooperative: loan options

Tamas Mizik

International Food and Agribusiness Management Review, 2020, vol. 23, issue 2

Abstract: Cooperation of producers is essential in agricultural production. The producer group is the official organization of the European arable sector. The Bonusz Agro producer group was established in 2015, and its legal form is cooperative. They use cooperative principles such as the democratic decision-making process ‘one member – one vote’ principle for both significant and insignificant decisions, unlike some other cooperatives. The management of the cooperative is considering investing in a new industrial site. This new site will be for cleaning/drying the produce, and storing it in a new storage facility, among other things. The company currently lacks sufficient financial resources to make this investment possible. One of the obstacles to obtaining the necessary finances is the lack of collateral the organization has control over. This case study examines the investment decision. The main focus is on how the organization can enlist the contribution of all members. The most delicate part of the decision-making dilemma is that all members would have to offer some of their own assets as collateral. These assets would be part of their agricultural land, which is necessary to obtain the required external financial resources from banks.

Keywords: Agricultural; Finance (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ifaamr:303728

DOI: 10.22004/ag.econ.303728

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