The Senate Agriculture, Rural Development, and Housing Finance Committee held a hearing yesterday to discuss the Ashby Elevator situation, as well as to hear updates from members of the Minnesota Department of Agriculture’s (MDA) Grain Advisory Group. Cooperative Network serves on the group, which was created as a result of several elevator failures in Porter and Ashby over the past few years that have impacted producers. Due to these failures, legislation was introduced in 2016 to create a Grain Indemnity Fund, as well as an increase in surety bond limits. While the legislation did not advance out of either body of the legislature, MDA created the Grain Advisory Council last year, consisting of Cooperative Network, the grain elevator industry, farm groups, commodity groups and MDA staff to discuss ways to mitigate negative impacts on producers when a grain buying entity goes out of business.
Cooperative Network provided testimony to committee members indicating that before any effort to create a grain indemnity fund is initiated, other alternatives should be explored such as regular financial reporting, expanded third-party financial auditing, as well as ongoing educational training for co-op board directors. Also mentioned was the educational benefit provided to Cooperative Network members in the form of director training as it relates to basic and advanced cooperative governance. Committee members were informed that Cooperative Network and the University of Minnesota co-hosted the recent Cooperative Leadership Program in Morton, Minnesota two weeks ago with over 50 co-op board directors in attendance. Cooperative Network staff stated it was an educational program focused on co-op governance and responsibilities of directors, which includes fiduciary responsibilities to their cooperatives and their member-owners. This type of educational programming was just one example of how the cooperative system continues to keep members and their directors up to speed on how best management practices in governing co-ops in a fiscally sound and prudent manner.
Cooperative Network also informed committee members that our organization represents co-ops in Wisconsin and that we serve on the Agricultural Producer Security Council, which is Wisconsin’s version of a grain indemnity fund. Their program is governed by the Agricultural Producer Security Council, which consists of ten agricultural industry representatives that includes a board representative from Cooperative Network. We mentioned that while a grain indemnity fund is in place in Wisconsin, members of the agricultural community have stated their concerns as the program is funded by industry licensing fees and assessments. We stated our opposition to the creation of a fund in Minnesota if it were to be funded by the agricultural industry and suggested that it would be more appropriate to be funded by the state general fund, similar to the programs in North Dakota and Michigan.
Our testimony closed by thanking Committee Chair Torrey Westrom (R – Elbow Lake) for the opportunity to appear before the committee to tell our co-op story. The Ashby Co-op Elevator is located in his legislative district, and in addition to hearing from agricultural industry representatives, also providing testimony were the attorneys for the co-ops board of directors and the producers who were unable to collect payment for their grain due to embezzlement by the former general manger. In addition, Cooperative Network thanked MDA for including our organization on the Grain Advisory Group and that we looked forward to working with them and lawmakers on this important issue in the future. Click here to view the video of the committee hearing furnished by Senate Media Services.