Patron Demand Deposit Account and Regional Patronage Financing Activities of Agribusiness Cooperatives

This paper investigates agribusiness cooperatives' reliance on patron demand deposit accounts (PDDAs) and regional patronage as sources of capital. Approximately 13% of cooperatives carry PDDAs, typically fruit cooperatives, of which over one-half have no financial protection against large unexpected withdrawals. Cooperatives with PDDAs must be concerned with potential legal conflicts regarding the handling of these accounts, as evidenced by a U.S. Supreme Court case classifying PDDAs as securities. Supply cooperatives are most likely to show investment in other cooperatives as a high percentage of total assets, which could generate insolvency issues for locals.


Issue Date:
2000
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/31810
Total Pages:
24

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