Cooperative Patrons Need to Read & Address CHS Proposed Bylaw Changes

Posted on: October 22, 2015 | Category: News Releases

October 22, 2015 – By #South Dakota Farmer Union

South Dakota Farmers Union President, Doug Sombke, urges cooperative patrons to weigh in on CHS proposed bylaw changes.

“If the suggested bylaw changes are passed, they will significantly alter the philosophy of CHS which could have a negative impact on family farmers and could result in changes to the local cooperative business structure,” explained Sombke, a fourth-generation Conde farmer who belongs to several local cooperatives.

Sombke is concerned that the proposed bylaw changes leave too much to the discretion of the board. “These bylaw changes may not result in any changes; however, if made, they give a huge amount of flexibility to those serving as board members. It’s not that we should not trust current board members to make correct decisions, it’s the fact that we do not know who will be serving on these boards in the future,” he explained. “If the proposed changes are passed, there isn’t much stopping CHS from trading in the cooperative business model for that of a corporate business structure.”

Cooperative patrons can review the proposed amendments to the bylaws on the CHS website, www.chsinc.com. Once they have reviewed the bylaw changes, Sombke urges patrons to contact their local cooperative board of directors and manager to share any concerns they may have. “The vote is just around the corner; patrons need to share any concerns they have soon,” Sombke said.

Below, Sombke outlines some specific changes he is concerned about:

Section 3 of Article II – allows the cooperative to do business with anyone up to any amount.
Section 2 of Article IV – stricken language deals with agricultural marketing act, AKA the Capper Volstead Act.

It will allow CHS board of directors to determine how and what is deemed the business operating agreement.

Section 3 of Article IV – changes the number of classes of members from 3 to 2.
Section 4 of Article IV – adds language that allows CHS board members to determine who can be an active member. This is a floating definition. This change really should be defined more.
Section 5 – Stricken language is stricken out because of removal of the Capper Volstead Act language in the previous section.
Section 6 – Stricken language is old language from 1978. Doing no harm.
Section 1 of Article 1 – Added language means anyone can allow a change of qualifications quite rapidly.
Section 2 of Article 1 – Strikes that are being stricken are old language and does not affect local cooperatives today.
Section 3 of Article 1 – Is completely deleted due to changes in ACTIVE member definition.
Section 4 – Will become Section 3 due to deletion of Section 3.
Section 5 through Section 10 – Cleaning up language and fitting with proposed changes earlier in the proposed changes.

“I am concerned that these proposed changes give the CHS board far too much latitude to award patronage as they see fit, and that this language changes control from owner/patrons to whomever the CHS board determines can control the company,” Sombke said.

A century of service to cooperatives, communities & family farmers and ranchers

Cooperatives are a large focus of South Dakota Farmers Union. A century old this year, S.D. Farmers Union helped launch many local cooperatives throughout the state.

Our organization founded many cooperatives. In fact, three name changes ago, CHS was a Farmers Union cooperative. The “Farmers Union” was removed from the name when the organization became CENEX,” Sombke said.

Last Modified: 10/22/2015 7:11:34 am MDT