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South Dakota says Hutterite co-op has been operating illegally; co-op to comply

In a complaint dated July 15, 2022, the South Dakota Public Utilities Commission outlined how the South Dakota Hutterian Co-operative, which has members from multiple Hutterite colonies in South Dakota, has been selling soybeans without a grain buyers license to Ag Processing Inc., referred to as AGP.

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PIERRE, S.D. — The state of South Dakota says a Hutterite farmer co-op has for years been operating as a grain trader without a license.

In response, the South Dakota Hutterian Co-operative has filed for a license, according to documents filed with the South Dakota Public Utilities Commission.

In a complaint dated July 15, 2022, the PUC outlined how the South Dakota Hutterian Co-operative, which has members from multiple Hutterite colonies in South Dakota, has been selling soybeans to Ag Processing Inc., referred to as AGP.

The complaint states that AGP buys only from cooperatives, not individual farmers, and therefore does not require a grain buyers license. But the Hutterite co-op, like other farmer-owned co-ops, is buying from individual farmers, making a license and bond necessary.

“Cooperatives by their nature operate and exist for the benefit of their members. This does not exempt cooperatives from licensing laws. In fact, this Commission issued some 85 grain buyer licenses for cooperatives for this licensing year,” the PUC complaint said.

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The complaint said it appears that the Hutterite co-op has been operating as a grain buyer without a license in South Dakota for several years and “has not been receptive” to the PUC requests to become properly licensed and bonded.

“It is of the utmost importance that our laws are applied evenhandedly to all grain buyers in this state,” the complaint said. “Staff does not have the authority to pick and choose which grain buyers to apply the laws to and which ones to exempt. We must apply the law equally to everyone.”

The colony, represented by the law firm Siegel Barnett and Schutz of Aberdeen, South Dakota, responded with a letter on Aug. 2, saying that it has submitted its grain buyer license application.

Julie Dvorak, an attorney with Siegel Barnett and Schutz, said it hopes to have the matter resolved by the end of the month.

The South Dakota PUC has two meetings scheduled in August.

Reach Jeff Beach at jbeach@agweek.com or call 701-451-5651 (work) or 859-420-1177.
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