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Engel Workshop: Evolving Reliance on Non-Member Business

  • Oct. 18, 2022 - Oct. 20, 2022
  • University of Missouri - Columbia
    Mumford Hall
    Columbia, MO 65211 directions to this event

Description

Many agricultural cooperatives—both multi-purpose and marketing—are experiencing an increase in their non-member business.    Non-member transactions are defined as either those that arise internal to the cooperative’s traditional patron business lines but conducted with member-ineligible entities, and those that are sought through expansion or growth external to the cooperative’s historical business units.  In some cases, non-member business expansion may represent an explicit growth strategy to support an existing and less growth-oriented member business.  Generating profits from non-member business may be seen as an opportunity to support member business lines and provide greater member-level benefits.  Yet, a growth strategy around non-member business has implications for cooperative patronage, equity management, and investments.  It creates the potential for a new tension between boards and management.  

This workshop will explore legally, financially, and from a cooperative philosophy perspective, the questions implicated by the evolving reliance on non-member business.  Among these are:

1. What are the growth strategies and rationale around non-member business that cooperatives are exploring?  

2. What are the qualities/characteristics required of non-member investments sought?  Is the investment criteria different?  

3. What role do non-member business lines play in value creation at the cooperative and member levels?  What are the impacts to patronage and equity redemption?

4. Is there a “tipping point” beyond which it is unsustainable to subsidize member benefits and business units with non-member business? 

5. Typically, cooperatives have been viewed as ‘anti-speculative’ in that they seek a limited role for capital.  Does this hold for non-member business?  Is this changing?  

6. Can the cooperative principles be maintained

Participants will not register, it will be personal invite only by Dr. Jacobs. 

Cost: Free