I'm a cocoa farmer/chocolate maker, launching a chocolate business soon. I purchase some cocoa from the local farmers too, but would like to increase this number in the future but would like to put a model in place to build my business but also give the farmers a level of ownership instead of building a typical co-operative.
Hi, giving farmers ownership, such as shares, in your business would only invite confusion as the level of business awareness is likely to vary among all the different parties.
Instead, create a relationship whereby the farmers have a direct benefit tied to their sales to you such that they will always want to sell to you over others and they will want to direct potential customers to you.
Essentially, some kind of volume bonus to the farmers akin to the volume rebate schemes often seen in B2B sales.
If you hit certain goals, they get something extra. It gives them a stake in your business without all the complications of actually making them owners.
Good luck and arrange a call if you'd like to discuss your situation further.
It sounds like you are talking about an ESOP (Employee Stock Option Program). Some notable companies to offer such incentives include GoDaddy, Nordstrom, Intuit, and Whole Foods Market.
Because the farmers you want to reward are not your employees, it may be tricky to structure an ESOP.
I am interested in knowing more about why you are opposed to a "traditional co-op" or profit sharing.