What are the differences between federated and centralized cooperative associations?

The difference between federated and centralized cooperative associations is:

When many local cooperatives come up together under the same offices, the unit becomes a "federated" cooperative, with a central office seeing the works of every member cooperative. The members of a federated cooperative are not individuals. Commercial business firms use the federating principle.

Management over a wide area is centralized, but at the same time members keep control. All savings from the central and the district exchanges go back to the individual members of the local cooperative packing houses.

Purchasing cooperatives also use the federated type of organization. This cooperative owns refineries, pipelines, and oil-producing corporations. It produces, transports, refines and distributes gasoline, oil, and other petroleum products from the oil well to the consumer.

Commercial business firms use by forming the federating principle retailer-owned cooperatives. These associations differ from cooperatives in a different way: The members are privately owned retail companies. Over 100,000 grocers are federated in this way.

 Similar retailer cooperatives are also serving drug, hardware, and other types of stores.