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and its membership as a whole. MCP also was obligated to market
the processed corn at the best rate obtainable on the open
market. In the UMAs, petitioners appointed MCP as their agent to
market and sell the corn they delivered to satisfy their
production and delivery obligations. MCP determined how much
corn petitioners had to produce and deliver and had “sole and
complete discretion in all phases of the marketing activity”.
In return for petitioners’ meeting their production and
delivery obligations, MCP was obligated under the UMA to pay each
petitioner: (1) At least 80 percent of the loan value per bushel
of corn delivered by each petitioner; (2) a storage fee and
interest in some cases; (3) an additional payment (“value-added
payment”) for value added to the corn as a result of its
processing, and as further compensation for corn delivered by
petitioners, if MCP determined that such a payment was warranted
after calculating the net proceeds from all of its operations for
the processing year and if MCP’s lenders approved; and (4)
payments from MCP’s earnings as patronage dividends in accordance
with MCP’s bylaws. During 1994 and 1995, petitioners received
value-added payments of $132,375 and $207,612, respectively,
attributable to the option pool corn they acquired and delivered
to MCP.
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Last modified: May 25, 2011