Surplus as a Capitalization Mechanism in Agribusiness Cooperatives in Paraná, Brazil

Agribusiness cooperatives in Paraná/Brazil have been growing year after year and trying to generate better results for their members. In order to grow these cooperatives have been developing several activities oriented to... [ view full abstract ]

Agribusiness cooperatives in Paraná/Brazil have been growing year after year and trying to generate better results for their members. In order to grow these cooperatives have been developing several activities oriented to growth. As a result, massive investment was necessary compromising their capital structure. Therefore searching for better capitalization mechanisms is one of the challenges that these institutions face. This paper’s objective is to verify if agribusiness cooperatives in Parana/Brazil use their annual profits as a capitalization mechanism and how much of this profit is reversed to the members. We used secondary data and analyzed the assembly documents of the fifteen biggest cooperatives on the state based on gross income. The results show us that 65,5% of the profit go to mandatory funds and/or funds created to develop and capitalize themselves, 3,5% go employees social capital funds and 31% go back to the members. In conclusion, the cooperatives use their surplus as a mechanism of capitalization. This paper contributes on the discussion about cooperative capitalization. showing us the importance of the concept and the positive influence in the capitalization strategy .