Restated Base Capital Plan
The Restated Base Capital Plan (“Plan”) is a funding method through which Riceland raises equity capital necessary to finance and operate its business, including constructing storage facilities, purchasing equipment, and providing other assets necessary to receive, store, process, and market crops delivered by cooperative patrons. The Bylaws authorize the Board of Directors to determine the required Base Capital contribution. The Board has approved this Plan which shall be in effect for the 2025-26 fiscal year of Riceland Foods, Inc, with an effective start date of 8/1/2025.
FAQs
The following FAQs are intended to provide general info about the Restated Base Capital Plan. However, they are not a substitute for, nor an amendment to, the Restated Base Capital Plan document, which shall control.
Base capital funding is used to maintain and grow the cooperative. The prior Base Capital System was mature, meaning annually we are redeeming more base capital to our members than the members paid in.
Yes, the Board of Directors approved a plan for the Drier Division that calls for improvements and investments at several drier locations. These investments will lead to improved levels of efficiency while maintaining a high level of service for the membership.
- Stuttgart Terminal investments – Will allow for additional soybean procurement at the crush facility.
- Waldenburg investments – Reduce need for temporary pods while also improving member service.
- Corning Investment – To enhance service levels to the members through more efficient truck dumping and receiving.
- Hazen investments – To ensure service once Lonoke and Des Arc no longer take rice.
- Newport – Maintain procurement.
Major components of the rice and soy division are over 30 years old. Investment is required to maintain and enhance our operations. Some key projects include:
- Updating milling equipment to increase quality and efficiency across our footprint
- Upgrading machinery to capture and sell by-products
- Improving parboil assets, including soak tanks and parboil dryers
- Improving sorting systems to increase quality
- Purchasing new packaging and bagging equipment
- Upgrading rough rice scalping systems at multiple locations
- Upgrading soy division including a soy oils tank farm, deodorizing and oil refining equipment, and installation of a soybean oil extractor
- Purchasing soy crush plant equipment to improve quality and oil recovery
- Water treatment plant investments
The Base Capital investment obligation is $0.13 per bushel for each bushel of rice delivered to Riceland. The investment obligation applies to all patron-sourced rice bushels, including the seasonal pools and the rice self-pricing marketing options. The Board’s intent is to redeem new rice base capital on a 12-year rolling cycle, meaning the year 1 investment is redeemed in year 13, subject to the Board’s discretion.
The Soybean Base Capital investment obligation is $0.10 per bushel for each bushel of soybeans delivered to Riceland and marketed through the soybean seasonal pool. The Soybean Base Capital obligation does not apply to other soybean marketing options. The Board’s intent is to redeem new Soybean Base Capital on a rolling 12-year cycle, meaning the year 1 investment is redeemed in year 13, subject to the Board’s discretion.
The Restated Base Capital Plan does not accelerate payment of Base Capital Credits issued under the prior Base Capital Plan, nor does it accelerate payment of any issued and outstanding Class A Stock; both types of patron equity will remain on Riceland’s books and be paid back pursuant to the equity redemption programs previously authorized by the Board including the Retiree Program, the Semi-Retiree Program, the Special Equity Redemption Program (governing decedent’s estates, bankruptcies, and foreclosures), and the Hardship Program. Patrons have the same rights to redemption after they cease farming for prior Base Capital and Class A Stock as they did before the Restated Base Capital Plan was adopted.
No. See answer to FAQ above re: How will Riceland redeem Base Capital paid in under the prior Base Capital Plan and/or issued and outstanding Class A Stock?
Yes, the capital obligation under the Restated Base Capital Plan applies to all patron rice bushels and all patron soybean seasonal pool bushels delivered on or after 8/1/2025, regardless of any capital contributed under the prior Base Capital Plan.
No. Base Capital Credits issued to patrons under the prior Base Capital Plan cannot be substituted for the 13 cents (rice) or 10 cents (soybean seasonal pool) owed for bushels delivered on or after 8/1/2025.
No. Patrons cannot satisfy their capital obligation under the Restated Base Capital Plan by transferring or substituting Base Capital Credits issued to the patron or a related patron account under the old Base Capital System. Also, Class A Stock cannot be substituted for Base Capital to satisfy the obligation, which was the case under the prior Base Capital Plan as well.
Yes. All rice bushels delivered by patrons on or after 8/01/2025, including the seasonal pools and the rice self-pricing marketing options, are subject to the new Base Capital investment obligation.
No. However, soybean bushels delivered into Riceland’s non-patronage self-pricing marketing options will pay a $0.10 per bushel handling fee to the cooperative. This fee will not be revolved back.
Base Capital sales or transfers are permitted to the Patron's spouse, partner, or children; to a corporation, partnership, trust, limited liability company, or other legal entity in which the Patron has a substantial ownership interest; or, if the Patron is a legal entity, to a person holding a substantial ownership interest in said entity. Transfers also are allowed to the Patron’s heirs or devisees upon the death of a Patron. No other sales or transfers are permitted. However, no assignments or transfers of any interest in the capital credited to a patron shall be binding upon Riceland unless entered on the books and records of Riceland in accordance with the terms and conditions specified by the Board of Directors.
If a patron retires from active farming, then the patron’s Base Capital (whether Base Capital Credits issued under the prior Base Capital Plan or Base Capital Credits issued under the Restated Base Capital Plan) are eligible to participate in Riceland’s Retiree Program, subject to the terms and conditions of that Program approved by the Board of Directors. Currently, under the Retiree Program, when a patron retires from active farming, Riceland will redeem that patron’s Base Capital over a five-year period (paying 1/5th of the amount each year). Please contact the Member Services Department for more information about the terms and conditions for this Program.
When a farmer member moves from actively farming to being a crop share landlord, the member can apply for the Semi-Retiree Program, which allows eligible members to redeem two-thirds (2/3) of both the Base Capital Credits issued to them under the prior Base Capital Plan and any outstanding Class A stock obligation owed to the member. Members must provide their FSA 578 forms for verification to enroll. Members will receive the Semi-Retiree Redemption over a five (5) year period. At this time, the Semi-Retiree Program does not include redemption of Base Capital Credits issued under the Restated Base Capital Plan, which have a 12-year redemption schedule. The Riceland Board reserves the right to amend, modify, or discontinue the Semi-Retiree Program in its discretion.
Still have questions?
If you have additional questions, please contact us, the Member Services Department, or your local drier for additional information.