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Guest Column: Co-ops Oppose CHS Bylaw Changes

By Staff | Nov 13, 2015

An association of more than 80 farmer-owned cooperatives in the state that purchase energy products and grain marketing services from CHS, Inc., recently voted to oppose the company’s proposed bylaw changes that could affect local profits if non-farmer organizations are allowed to be members of CHS.

The Fortune 100 cooperative is currently owned and governed by agricultural cooperatives in communities throughout the region and by individual farmers that do business with CHS.

“Our cooperatives, farmers and ranchers are the ones that have supported CHS and grown its success,” said Paul Schlichting, president of the North Dakota Cooperative Managers’ Association (NDCMA). “Why would we give membership to groups that aren’t even involved in agriculture?”

If passed, the bylaws change would allow CHS to do business directly with government entites, non-farmer organizations and consumer cooperatives. These groups would receive patronage as members of CHS and have voting rights.

“This has the potential to drive business away from locally-owned cooperatives that are now supplying products and services to those groups,” said Schlichting. “It could negatively impact our bottom lines locally and the overall patronage dividends we receive from CHS profits at the end of the year, because there will be more member-owners and less of the pie to go around.”

While NDCMA agrees with some proposed bylaw changes, Schlichting said, “It’s an up or down vote – all or nothing – with all the changes lumped together. We are uncomfortable with that process.”

The proposed changes were announced in early September and will be voted on Dec. 3 at the CHS annual meeting in Minneapolis. “For us, it’s a tight timeline before the vote,” Schlichting said. “There is no real opportunity to give feedback or table the discussion until co-ops have had a chance to digest the proposed changes and impact to their cooperative. We do feel blindsided.”

North Dakota Farmers Union, the state’s largest farm organization and advocate for farmer-owned cooperatives, has gone on record as being opposed to the bylaw changes.

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