One of the most successful innovations to come from the agriculture industry is not a fancy piece of machinery or a pest-proof form of biotech crop, but a business model made for and run by America's farmers.

The concept of the agricultural cooperative developed in the 1920s when U.S. farming industry had been struggling with private investors who were beginning to realize that money was not made in the production, but the processing and sales of food. Farmers were frustrated because they weren't being given the equipment or manpower that was needed to run the farm if the investor that they were tied to didn't see it as profitable.

After the passing of the Capper-Volstead Act however (1922), organized groups of farmers were granted certain exemptions from anti-trust laws, giving the cooperatives a chance to grow.

Over the years, cooperatives have evolved based on the needs of the members, which was often according to where they were located and what they produced.

Today, cooperatives operate on many levels and provide various goods and services to their members. Ranging in size from 20 members to 10,000 members, cooperatives provide a sense of, well, community, to the farming community.

The difference between a farmer-owned cooperative and a privately owned corporation is that the purpose of a cooperative is not only to show members an end-of-year profit margin, but to provide them with benefits—such as supplies, equipment, employees, etc.—that will allow individual members to operate to their full potential.

In addition to the monetary value and security that cooperatives provide, there is also protection in the governance structure. Cooperatives are run entirely by the farmers who invest in them, giving members complete control of activities and return on investment.

Cooperatives also serve as a way to improve the relationship between farmers and investors by creating a greater sense of competition.

A Texas-based cooperative known as the Plains Cotton Cooperative Association (PCCA), was founded in 1953 to serve as an alternative for farmers who felt that they were getting an unfair price for their products from private investors faced with little to no competition.

PCCA describes its mission as one that adds "significant value to the cotton marketed for our members by being the supplier of choice to our business partners in terms of quality, service and value."

"The competition is there," says John Johnson, Director of Public Relations and Legislative Affairs at PCCA, "we're just offering a fair alternative."

As the world's largest producer and supplier of Texas-style cotton, and the only fully-integrated cooperative—PCCA produces and markets the cotton, along with having the capacity to produce 150,000 pairs of jeans weekly in their own denim mill—PCCA is the perfect example of a farmer-run organization that is thriving in the wake of so much economic turmoil.

"In 2009, agricultural co-ops had sales of $170 billion, the second highest on record," Don Wick of the Dairy Star reported recently. "Co-ops [also] recorded sales increases last year for farm supplies, crop protectants, seed and feed."

Wick also reported that Minnesota had the most cooperatives with 213, followed by Texas with 198 and North Dakota with 168.

While cooperatives may have started as a resource swap, a good business model and a greater sense of accountability have helped them grow, meet the demands of their members, and even turn a profit.

So, is there any remaining difference between agricultural cooperatives and private investment corporations?

"We're in the business of making money for our farmers," says a proud Johnson. "Not from them."