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Short-term financial sustainability of agricultural cooperatives

Pedro Piccoli (Pontifical Catholic University of Parana, Curitiba, Brazil)
Nilton Bianchini Junior (Pontifical Catholic University of Parana, Curitiba, Brazil)
Jeferson Coser (Pontifical Catholic University of Parana, Curitiba, Brazil)
Vilmar R. Moreira (Pontifical Catholic University of Parana, Curitiba, Brazil)

Agricultural Finance Review

ISSN: 0002-1466

Article publication date: 10 December 2020

Issue publication date: 1 June 2021




From 2006 to 2016, Brazilian agricultural cooperatives exhibited a sharp increase in sales. Since the operational cycle of these organizations demands a positive net working capital that is usually funded by debt, the authors examine whether this rise in sales was obtained at the cost of the short-term financial sustainability. As a matter of comparison, the authors conduct the same analysis for Brazilian agricultural public traded companies.


The authors employ the dynamic analysis of working capital method to measure the short-term financial sustainability of these organizations.


The authors find that the expansion of net working capital caused by the growth of the revenues of the sampled cooperatives was mostly funded by short-term debt, which rose by 31% in annualized terms. The authors also document that around 60% of these firms displayed a current capital structure that can be considered risky in terms of indebtedness, and that the majority of firms exhibited a non-sustainable growth in the period, what contrasts with the performance presented by Brazilian agricultural publicly traded companies, since only 16% of the firms from this group have shown a non-sustainable growth. This distinction seems to be explained by the lower capacity of agricultural cooperatives to provide resources from their operations.


The authors investigate the short-term financial sustainability of a unique dataset of 65 Brazilian agricultural cooperatives and provide insight for researchers analyzing the dual nature of these firms.



Piccoli, P., Bianchini Junior, N., Coser, J. and Moreira, V.R. (2021), "Short-term financial sustainability of agricultural cooperatives", Agricultural Finance Review, Vol. 81 No. 3, pp. 444-457.



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