Trading rebates are the traditional method co-operatives use to distribute any profits to members. Rebates are based on patronage and can be in the form of cash, shares or a combination of both. Trading rebates are treated as income to the producer and are taxable.
Rebates are determined at the end of the financial year when the results of the co-operative are known.
At a recent meeting the Co-operative's Board finalised the policy that will be applied in determining any rebate entitlement members may have in the current 2004/05 year. There are two important requirements that will need to be met.
To qualify for any trading rebates members will have to hold participation units covering the lambs they supply. Foundation shareholders have been allocated participation units based on one (1) participation unit for each eight (8) shares held eg a member holding 800 foundation shares has 100 participation units covering 100 lambs.
Members may deliver more lambs than they hold participation units but the additional lambs will not qualify for any rebates. Members may increase their participation units by subscribing for additional shares on the basis of paying $1 for the first of 8 shares, with the remaining 7 being funded from future rebates eg if you have participation units for 100 lambs (ie you hold 800 foundation shares) and you wish to deliver 200 lambs and be eligible for rebates you must pay $100 for 100 subscription shares. The remaining 700 will be issued from future rebates. If a member fails to deliver sufficient lambs in any year to generate the necessary rebate their participation units reduce.
Rebates will also only be paid on “over-the hooks” traded lamb purchased from members under WAMMCO’s weekly price schedule. Other forms of purchase eg on-farm, guaranteed price contracts, saleyard are excluded.
If you wish to confirm the participation units you have or require clarification on any of the above please contact the co-operative direct or any member of the Board.