SASKATOON – Saskatchewan Wheat Pool has decided to once again allow eligible members to redeem the equity they hold in the company.
However, the company has made no decision to resume patronage allocation, the system under which members build up their equity by doing business with the pool.
Last fall, the pool’s board of directors decided to freeze all equity in the company as of Jan. 31. After that date, members would no longer earn equity through patronage, nor would they be allowed to cash in their equity for reasons of death, retirement or age.
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That decision was made in anticipation of a speedy move to convert that equity into share capital which could be listed for sale on the Toronto Stock Exchange.
But with the share conversion now postponed until after seeding, the pool’s directors decided at their April meeting to re-instate the ability of eligible members to redeem their equity.
Pool treasurer Erin Canham said that because of the delay in conversion, it was felt that members in eligible categories should not be prevented from getting their equity out of the company.
“It really came from people going to spring banquets and hearing from someone that their mother or father had died and they couldn’t finalize the estate until the equity was paid out,” he said. The resumption of equity redemption also applies to members who cease farming through retirement or bankruptcy and members over age 65.
The status of patronage allocation has been one of the key issues raised by some members who are publicly opposing the pool’s decision to convert member equity to shares. They point to a resolution passed at last November’s delegates meeting stating that the pool should allocate patronage dividends up until the date of share conversion.
However, pool officials said they needed a couple of months lead time to update and finalize their records before the share conversion took place. Based on conversion happening before seeding, Jan. 31 was selected as the cut-off for any changes in member equity.
Barry Senft, the pool’s second vice-president, said if it looks like the conversion might not take place before the end of the fiscal year July 31, the pool may reconsider its position on patronage allocation.
