Agricultural Economics Department
Date of this Version
July 2003
Abstract
Equity management is always challenging for agricultural cooperatives, which generally rely on patronage-based methods for accumulating equity and are frequently subject to competing pressures from current and former patrons. Current patrons, who must pay income tax on patronage refunds, may seek to have a greater proportion of refunds paid in cash. Meanwhile, former patrons may press to have retained patronage refund allocations redeemed in a more timely manner. Faced with these demands, many cooperatives have experienced considerable difficulty in maintaining adequate levels of equity capital.
Comments
Published in Cornhusker Economics, 07/23/2003. Produced by the Cooperative Extension, Institute of Agriculture and Natural Resources, Department of Agricultural Economics, University of Nebraska–Lincoln.
http://www.agecon.unl.edu/Cornhuskereconomics.html