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Cooperative law proposal packs Wisconsin hearing room

A proposed change to Wisconsin’s cooperative laws packed a State Capitol hearing room Wednesday.

John Manske of Cooperative Network says Wisconsin’s cooperative statutes haven’t been modernized in nearly 40 years.  “Cooperatives are changing, and the changes I’ve seen in 25 years of working for the cooperatives is just incredible.  The mergers, the consolidations, the changes, the technology, and if we don’t help our members have options, then I think we’re doing a disservice for our members.”

Assembly Bill 353 and its companion, Senate Bill 281, would allow non-co-op members to serve as voting directors on the board.  Bob Topel with Foremost Farms says that is needed.  “This gives them credibility that they’re voting (and) they’re representing the members and they have a fiduciary responsibility.  They’re not just giving advice.”

Cobb, Wisconsin farmer Laura Daniels is a Farm Bureau member and member of several cooperatives.  She disagrees and doesn’t want non-members voting on the co-op boards.  “There are already advisors to almost every co-op board, and they’re certainly able to bring in expertise for short-term topic information or long-term.”

Another change would allow voting based on patronage and not the traditional one member-one vote model.  Several people including members of Wisconsin Farmers Union testified against that change.

The Farmers Union believes this is not fair to small and medium-sized farm operations.  Farmers Union Member Les Danielson of Cadott is a dairy and cash grain farmer.  He testified that non-member board members should be advisory only, and not be able to vote to control the member’s equity.  Danielson serves on boards at River Country Cooperative and Eagle Point Mutual Insurance.  He’s also Board Vice President at Equity Livestock Sales Association.  Danielson calls the proposed changes “disturbing at best.”

Rebecca Kembel is a worker-owner at Union Cab, a transportation cooperative in Madison.  She testified the bill affects all cooperatives, and even though they are a member of Cooperative Network, they were not consulted or invited to participate in the workgroup that put this legislation together.  Kembel, who is also a Madison City Council member, says this bill is brought to lawmakers by predominant co-op industry types and CPA’s and is not representative of most members.

Wisconsin Farm Bureau has not taken a position on the bill.  Executive Director of Governmental Relations Paul Zimmerman told Brownfield they would monitor the bill and then go back to members for input.  He confirms there are Farm Bureau members that support the bill and others that are concerned about jeopardizing the one member-one vote standard.

Dairy Farmer and board member for both Cooperative Resources International and AgSource Daniel Diederich supports the bill.  He tells Brownfield if passed, the bill does not automatically change every co-op’s structure.  “Every change that’s in there would require the membership to create a vote in favor of changing their bylaws to allow for either the directors or patronage changes or any of the other implementations.”

Lori Meinholz with Cooperative Network and Compeer Financial also supports the bill.  She says outside directors with voting power is required by the federal government for Compeer.  She says these non-member voting directors have brought valuable information to them benefiting their members.

Both opponents and supporters of the bill spoke in favor of a provision that would allow electric utility cooperatives to make limited loans to qualifying members for wiring safety projects, energy efficiency, conservation, and backup generation projects.  Consumer law prohibits these loans, and Wisconsin only allows business-to-business loans from electric co-ops for similar improvements.

Testimony on the bill lasted more than three hours.

The proposed change in cooperative law would impact cooperative operations in other states if they are based in Wisconsin, like Foremost Farms.