Cooperatives are the aggregates of economic units, such as farms. The cooperative isneither a horizontal integration of its member-farms nor a vertical integration betweenmember-farms and the cooperative, but rather a third mode of organizing coordination.Cooperatives are owned, controlled, financed, and used by members for mutual benefits, with service at cost and proportionality being two basic principles. Farmers organizemarketing cooperatives to access markets, exercise countervailing power vis- visother market participants, promote competition, and thus enhance marketefficiency. Cooperation as practiced by dairy farmers in marketing milk is an enduringbusiness model that is in full accord with the economic theory of what cooperatives areand what cooperatives do. Members supply equity capital needed for the cooperativeto carry out its core business of marketing members' milk. Capital financing, in general, is not a contentious issue for dairy cooperatives. For other cooperatives that have difficultiesin raising capital from members, the issue is really a reflection of a certain gapbetween member purposes and cooperative functions. The solution lies in assessingwhat members want the cooperative to do and how much they are willing to finance it;the cooperative should operate accordingly for members' best interests. Social entrepreneurshave renewed interests in adopting cooperatives as an economic developmenttool to empower people to work toward their own economic destiny. Over thelong term, cooperatives must be self-sustainable in order to be economically viable.Key Words: Cooperatives, dairy, milk, cooperative theory, competitive yardstick, countervailingpower, capital, financing, social entrepreneurs.