WFU warns members about proposed changes to state's cooperative laws

Nick Levendofsky
WFU Government Relations Associate
Nick Levendofsky

CHIPPEWA FALLS - If you are a member of a cooperative in Wisconsin, you need to be aware of a bill that could significantly change our state’s cooperative organizing laws – and your rights – as a co-op member. Senate Bill 281/Assembly Bill 353 would permit co-ops to make certain changes to their bylaws that are currently prohibited under state law. These changes are permissive, not mandatory, meaning that they would only apply to your co-op if the co-op votes to adopt them. 

If you are a member of any cooperative in Wisconsin – up to 20 percent of your cooperative’s board seats could be turned over to non-members, including outside investors. You could lose the right to review cooperative records that are more than three years old. Your co-op would be allowed to give greater than 8 percent returns to capital investors. 

In addition to these changes, if you are a member of the cooperative holding company Cooperative Resources International (CRI) or its member co-ops Genex or AgSource - your co-op could choose to base voting power on patronage, rather than the principle of one member, one vote. If this change is adopted, average-sized farms would see their voting power in the co-op significantly diminished compared to the co-op’s very largest farm members. 

The co-op trade association Cooperative Network is taking the lead in advocating for these proposed changes. Proponents of the bill reason that we should allow our co-ops to change with the times; that other states have changed their cooperative laws to allow patronage-based voting in limited situations; that federally-chartered farm credit banks have had outside directors for some time; and that the changes in the bill are opt-in, rather than automatic, meaning each cooperative will decide for itself whether to adopt the changes or not. 

WFU does support separate provisions of the bill that would allow electric co-ops to invest more in energy efficiency projects. However, we think the overall proposed changes are fundamental departures from cooperative principles, and the case has not been made for their necessity. In today’s economy, we need our cooperatives more than ever. Let’s build on what makes our cooperatives unique, rather than diluting the cooperative difference. 

In any case, these decisions should not be taken lightly by co-op members. Consider reaching out to your legislators or cooperative board representatives to let them know what you think about this issue. Wisconsin Farmers Union urges all cooperative members to give careful consideration to any proposed bylaw changes put forward by your cooperative, and ask questions – even hard ones – to ensure a full and open discussion of the issues.