Milcobel adapts system of capital accumulation to benefit its members
On June 20, dairy cooperative Milcobel held its Annual General Meeting to report the 2022 results. In addition, an Extraordinary General Meeting was also held during which statutory innovations were implemented that strengthen the cooperative operation and make the cooperative offer more attractive to both existing member-cooperators and potential new members.
After an intensive participation process in recent months with regular consultation moments within Milcobel's cooperative structures, a number of adjustments to the articles of association and internal regulations were approved by an overwhelming majority. In this way, Milcobel is continuing to roll out its strategy for the future, for which retention and acquisition are important levers.
During last Tuesday's Extraordinary General Meeting, the delegates gave the green light for the proposed adjustments to both the articles of association and the internal regulations.
Clear choices for the future
Here are the main changes in broad terms:
- Milcobel insures the capital accumulation of its member-cooperators through the cooperative return ("post-payment or fidelity premium").
From now on, members' capital accumulation is through the cooperative return. Member-cooperators therefore no longer have to worry about the annual capital obligation.
- The capital accumulation of an individual shareholder-cooperator of Milcobel CV will be limited to no more than double the minimum capital requirement.
This means that the maximum capital contribution a member can have is increased to 15 EUR/100 liters; this with a view to acquiring dividends.
- The mandate of Delegate for the General Assembly of Milcobel CV has a term of four years.
In the pursuit of further professionalization, the mandate for the General Assembly will be extended from one to four years. In this way, we are building a close-knit, informed group of member-cooperators who set the course. Efforts will also be made to educate and train this group. An annual (re)election will take place to fill any open mandates.
- In addition to membership (cooperative-shareholder), Milcobel is introducing the possibility of supplying milk on a contractual basis.
Via a supplier contract, dairy farmers are given the opportunity to become acquainted with Milcobel as a buyer; which can then evolve into a traditional membership. Such contracts have a term of 1 year (renewable) and a mutual notice period of 3 months.
The supply conditions (quality requirements, delivery of the full farm volume, logistical conditions, etc.) of Milcobel membership apply in full; just like the Milcobel milk price system.
Naturally, contractual suppliers are not entitled to cooperative refunds ("post-payment") and dividends; this remains exclusively reserved for members.
After a minimum of two contract years, the option is offered to switch to Milcobel membership; the new member is then entitled to the post-payment of the last year which will be placed in the associates' account according to the system laid down in Amendment 1.
- The minimum term of Milcobel membership is set at 2 years.
Those who register as new members will commit themselves for a minimum period of two years. By lowering this period from five to two years, more flexibility is offered to new entrants.
On the other hand, it shows sufficient self-confidence that Milcobel knows how to present itself as a stable and reliable partner in the cooperation with the member dairy farmers, without the need for strict, restrictive rules to bind farmers for a longer period of time.
In addition, a number of other changes were made aimed at supporting young dairy farmers.
- Members under the age of 40 can make a one-time request to have their cooperative refund not placed in the associates account, but paid out.
The ambition is to give young dairy farmers a boost. By making the cooperative refund callable for young dairy farmers, we offer members the opportunity to invest extra in the future of their business.
This scheme can also be used when the farm is run jointly when one of the members within the partnership is max 40 years old.
- Milcobel provides an incentive upon takeover & continuation of Milcobel membership in the form of a takeover premium of 1 EUR/100 liters which is used for capital accumulation.
To maintain the volume of member milk and support the future generation of dairy farmers, Milcobel provides a premium when taking over a Milcobel dairy farm. If the takeover is gradual, the premium will also be allocated proportionally 'per takeover bracket'. With the payment of the takeover premium comes a minimum membership obligation of five years as a condition.
The road ahead
At the end of the Extraordinary General Meeting, President Betty Eeckhaut thanked everyone who has contributed to the creation of this statutory reform during the past period. "At the moment when, together with many dozens of board members, you think and consult constructively about the future, you feel the heartbeat of a dynamic cooperative embracing the future. With these reforms, Milcobel is making significant efforts that will benefit both existing members and new entrants. This is the way forward that we are taking together."
Members receive 4% dividend
General Assemblee approves proposal of the Board of Directors.
During the General Meeting, the 2022 annual figures were explained and finally approved. In addition, the meeting also approved the Board of Directors' proposal to pay member-cooperators a 4% dividend on the paid-up capital.
With the combination of a historically high milk price, a cooperative return (0.35 EUR/100 liters) and a 4% dividend, Milcobel successfully closes 2022.