When you go to your co-op screen, the last tab takes you to the village. There are 5 buildings (I'm calling the tractor a "building") around a central park. Each of these buildings represent an upgrade for your co-op. The level of the upgrade can be found on a little sign beside the building. More info on these buildings, upgrade costs and value can be found here. The tractor is special and needs to be activated (10,000 village funds) to have it's bonus apply.
To purchase village funds - also refered to as donating to the village - click on the little blue plus button beside the available funds at the bottom of the screen. You will get a pop up (shown) with 2 sliders, one to use cash to purchase village funds and one to use gold to purchase village funds.
This uses your personal farm cash or gold to contribute funds to the village.
Funds are purchased in increments of 10,000 farm cash for 100 co-op funds (100 to 1 ratio) or 50 gold for 50 co-op funds. One of the upgrades is a funds bonus. Shown is a bonus of +5 - 105 per 10,000 farm cash or 55 per 50 gold.
Some packages and the gold offers for co-op tournament levels can also contribute funds to the co-op.
To purchase an upgrade, just click on the building and tap "Buy". Only the leader and deputies can purchase upgrades or activate the tractor in the village.
THERE IS NO CONFIRMATION!
A lot of co-op tension comes from accidental co-op bonus purchases, especially those with little value. It is very easy to bump a button when looking at what the upgrade does. Many co-op upgrades (and wildflower books) have also been purchased by a button mashing Jr. Farmer.