On the chance for profiting from early knowledge…

“There was no chance for any board member — other than myself and Jerry Hoskyn — to know in advance and take a position. I can tell you, and it can be documented, that I had all my rice in that pricing pool and hadn’t sold any of it. All of my rice has been transferred to the seasonal pool, the same as everyone else’s.

“I asked the board how many of them had rice in the pricing pool. I don’t remember if it was all of them — but a good number held their hands up. I asked how many had sold any rice and only one or two members had.

“I assure you, to my knowledge, that no board member took unfair advantage of this situation.”

Among other options considered…

“We could have set the basis so high that it would have protected the mill. I don’t think anybody would have been any happier with that than (the pool termination). As a matter of fact, I think that would have been more detrimental — now, (members) are in a (seasonal) pool that has done well in the past and there’s no reason to think it won’t this year.

On acknowledging potential financial pitfalls…

“It was a very, very tough decision for us. One of the main reasons is we know — we knew and understood — that there were farmers counting on being able to sell their rice before the first of the year. We knew that there was a possibility it would put some of them in a worse situation than what they were already in.

“I talked to lending officers at several banks trying to explain what had taken place. I encouraged them to work with (farmer members) if they were in a worse condition. I got a good response that they’d try to do that.

“But it was hard” to terminate the pool “because we knew it would put pressure on people.

“One thing, though: it isn’t like (co-op members) won’t get any more for their rice…

“There will be more (coming) for their rice. We don’t know where the (seasonal) pool will be. But … for the last 21 years, (the mill’s seasonal pool price) has beat the national average.

On the pricing pool’s history and use…

“I use the pricing pool some. Mainly, I use it to make sure the pool is functioning as it’s supposed to.

“We didn’t have a pricing pool until 1991. When I became chairman at PRM, I sent out a questionnaire to all members asking if there was anything the mill wasn’t doing they’d like to see done. The most frequent response was ‘a greater market for rice.’

“When the mill was first organized in the 1940s, everything was in a pool. That’s what the (founders) wanted.

“As the mill grew and changed in the 1970s we bought a facility in Wynne, Ark. Most of the members that came in had farm storage. So, they were used to dealing with markets (in a different way).

“Then, in the 1980s, we acquired nine Pioneer facilities. Most of those farmers had grain bins. …

“So, members wanted an opportunity to market their own rice. I thought it was important to provide that.

“It wasn’t an easy process figuring out how to set it up. One key was we had to put on a true hedge. We got liquid enough in the early 1990s to where we could do that.”

2010 “has just been an unusual year that has, technically, prevented us from putting on a true hedge. From the standpoint of borrowing, meeting our banking covenants and taking care of member business and protecting their equity, we absolutely didn’t have a choice” on the pool termination.