The use of the results as capitalization strategy of agricultural co-operatives in Paraná

Abstract

With significant importance in the economic background in Parana, the agricultural cooperatives grow each year seeking better results for its members. Throughout their history, several difficulties were found in their development, since a great amount of investment has been necessary to support their practices throughout the years, directly affecting their capital structure. Hence, looking for better capitalization mechanisms has become a challenge for most coops in Parana. The aim of this paper is to verify if the co-operatives in the state use their annual results as a way of capitalization and how much of the result is given back to their members. We used secondary data and general meetings records in a non-probabilistic sample of the 15 biggest co-operatives in the state. We used income criteria based on the 2014 data, we verified that 65% of the total income is addressed to mandatory legal funds and funds created for the cooperatives development and capitalization, moreover, 4% were allocated to the members’ social capital’s share and finally 30% are given back to their members in the form of financial resources, proving the use of surpluses as a capitalization strategy of the cooperatives. Briefly, this assessment sought to contribute to the discussion about cooperative capitalization, demonstrating the importance of generating positive results and its influence on the capitalization strategy.