Virtual Cooperatives in Brazil and the Globalization Process

Agricultural cooperatives in Brazil, as in other countries, develop through vertical integration in order to promote industrialization of the agricultural product and to aggregate the value of agricultural commodities. The vertical integration strategy was a predominant business planning adopted by Brazilian agricultural cooperatives in the 1980s. It was responsible for greater assets in cooperatives, larger agro industrial plants, and higher debt structure. Nowadays, it is possible to observe new agro industrial cooperative organizations in Brazil called "Virtual Cooperatives." These virtual organizations do not possess significant assets or industrial plants, but represent a network that has a particular business strategy in the markets. In order to discuss virtual cooperatives, this paper describes the agricultural cooperatives in Brazil, the globalization process, and the institutional environment that has given rise to virtual cooperatives. The paper also describes the nature of a virtual cooperative, and the advantages and disadvantages when these organizations are compared to traditional agro industrial cooperatives. Two different virtual cooperatives cases studies are presented.