The CHS Board’s discussions regarding cooperative membership eligibility, Capper-Volstead and related issues are not new discussions. The CHS Board’s thinking about how CHS should define membership for its cooperative members has evolved over recent years as we became aware of how some member cooperative business models were evolving, as new business opportunities developed in the country, and as CHS considered the importance of remaining a “producer only” cooperative, including the importance to CHS of trying to be eligible for Capper-Volstead. All of these discussions have remained a board-driven decision and consistent with the CHS Board’s unwavering commitment to the cooperative business model.
Most importantly, the CHS Board believes that the membership definition amendment is the right thing to do. Very simply, it gives our member co-ops the flexibility they may need in their membership structure to remain relevant and strong, while reinforcing our commitment to the cooperative model. And we believe that deep foundation of CHS as an agricultural cooperative will remain strong, even with this change. We believe current members are tied to rural communities and they will remain focused on serving agriculture. Any new CHS cooperative members must show the same commitment, per our policy. The CHS Board will remain producers, too.
If Capper-Volstead is a concern, the CHS Board has observed that Capper-Volstead is being interpreted with a more narrow legal definition as evidenced by legal rulings involving other cooperatives. Given the nature of CHS business, we do not benefit from potential protections offered under Capper-Volstead. As a result, the CHS Board determined that it was in the best interest of the company and all of its owners that we not let CHS own potential Capper-Volstead eligibility control the more important question of who can remain a CHS member cooperative. We know that maintaining Capper-Volstead eligibility would require CHS to take cumbersome and intrusive steps to ensure we meet its terms.
In addition, we continue to defend Capper-Volstead as a valuable tool for agricultural cooperatives, including some of our own members, who need it. Each member cooperative must determine whether protection and eligibility under Capper-Volstead is valuable to its own members and unique operation.