Congressman Robert Hurt joins Farm Credit to announce patronage refunds.
Staunton, Virginia – Agricultural lending cooperative Farm Credit recently announced their return of $4.7 million in patronage refunds this spring to farmers and rural residents who use the cooperative’s services in the central Virginia area.
Local farmers and Farm Credit directors recently joined Representative Robert Hurt of Virginia’s Fifth District as he toured local farms in the central Virginia area to discuss issues important to agriculture and to rural America. Farm Credit is returning $4,757,000 in patronage refunds to residents in Congressman Hurt’s district. “Our farms and farmers are facing a variety of political, economic, and environmental issues” said Congressman Hurt. “I applaud Farm Credit for providing support to our rural communities and sharing the organization’s success with them.”
Farm Credit of the Virginias is part of the nationwide Farm Credit system of lending cooperatives serving rural America. Because Farm Credit associations are structured as member-owned cooperatives, they are able to return a portion of their income to their customers in the form of a patronage refund.
Dave Lawrence, president and chief executive officer of Farm Credit of the Virginias said, “I am pleased at the record percentage of this year’s patronage refund and the fact that we have been able to return patronage back to our customers year after year.” Lawrence noted that this patronage refund is equivalent to 24% of the interest earned on a customer’s loan.
“I am proud to be a part of a cooperative that gives its profits back to its customers. When we make money we share it with those who have been loyal to us,” said Don Reese, a member of the board of directors of Farm Credit of the Virginias.
ABOUT FARM CREDIT OF THE VIRGINIAS
Farm Credit of the Virginias provides over $1.5 billion dollars in financing to more than 10,000 farmers, agribusinesses and rural homeowners throughout Virginia, West Virginia and western Maryland. Farm Credit is a cooperative capitalized largely through investments made by farmers, ranchers and the rural homeowners and businesses that borrow from them. Farm Credit helps maintain and improve the quality of life in rural America and on the farm through its constant commitment to competitive lending, expert financial services and for facilitating and sharing knowledge and resources through the Farm Credit Knowledge Center. For more information, visit www.FarmCreditKnowledgeCenter.com or www.FarmCreditofVirginias.com
By Karen Macdonald
When you buy a product or service from most companies, that’s the end of the transaction: you give them money, and they give you what you’ve purchased. With Farm Credit cooperatives, the relationship goes much further, delivering ongoing value and helping contribute to long-term success.
A farmer or rancher who borrows money from a Farm Credit association becomes a member-owner of that organization, effectively buying stock in the cooperative. This ongoing ownership encourages borrowers to meet the terms of their loans, paying back the money they’ve borrowed and interest they’ve accrued because they have a vested interest in the performance of the business.
This vested interest is paid out in the form of patronage dividends, a portion of the profits the company has earned being shared with every active member-owner, typically in proportion to the business they conduct with the cooperative. How much this portion represents is determined by the democratically elected Board of Directors, which decides how much of the profit earned by the organization should be retained to support future business activity (retained earnings), and how much to return to the member-owners as patronage dividends.
“Cooperatives are different in that they share their profits with their member-owners, whereas investor-owned companies share their profits with stockholders who may or may not buy the company’s products or services,” says Bill Oemichen, Cooperative Network president and CEO.
This “members’ economic participation,” as the cooperative principle is stated, has implications for every farmer, rancher and rural or agricultural business who becomes a Farm Credit member-owner. Not only do they share in the positive performance of the financial institutions that provide them the financing they need to run their businesses, they help create that very success by being successful in their own businesses and paying back their loans on time.
Democratic member control is one of the seven key principles of the cooperative business structure. As with citizens within a democratic government, this means that the members of the cooperative have a say in how the organization is run: they help decide which strategies are pursued, what products and services are offered, and which employees are hired.
In a smaller cooperative, this democratic control can be direct. However, given the size of Farm Credit organizations, it occurs through elected representation — the farmers, ranchers and agricultural cooperatives who are member-owners of a Farm Credit organization elect the majority of individuals who serve on the board of directors. At times, the board may also appoint additional members who offer special expertise or offer other insight. This board of directors establishes the strategy for the cooperative, guiding oversight and management of the business operations.
The individuals who run for director positions are also member-owners of the cooperative, so they both understand the business, and have a guiding self interest to take their responsibilities seriously and do all that they can to guide the cooperative to success. Most Farm Credit organizations offer their board members ongoing education and development to ensure that they have all the tools and expertise they need to lead most effectively.
“Unlike investor-owned corporations, patron members of a cooperative have the right to run for the board and to set policy for the organization,” says Bill Oemichen, Cooperative Network president and CEO. “This is what uniquely gives co-op members a long-term interest in the success of the cooperative.”
As with a local, state or national government, if members of the cooperative aren’t satisfied with the organization’s performance, they have the power to elect different individuals to take over the leadership duties. Term limits are typically established so that the cooperative can benefit from new ideas and perspectives.
We are pleased to announce the top 3 Winners of our 2015 Photo Calendar Contest. The contest was extremely successful and competitive, with over 300 photo entries and 1,600 votes! First place goes to Pammy Mitchell of Upper Tract, WV, Second Place to Melanie Craig of Bedford, VA, and Third place to Mary Dunn of Peterstown, WV. The top 3 photos can be viewed on the Farm Credit of the Virginias’ website. The top 12 photos will be featured in the 2015 Calendar with other entries from this year’s contest making appearances as well. Congratulations to all of our winners and everyone that participated. Please visit our website beginning January 1st to participate in the 2016 Calendar Photo Contest.
Farm Credit of the Virginias provides over $1.5 billion dollars in financing to more than 10,000 farmers, agribusinesses and rural homeowners throughout Virginia, West Virginia and western Maryland. Farm Credit is a cooperative capitalized largely through investments made by farmers, ranchers and the rural homeowners and businesses that borrow from them. Farm Credit helps maintain and improve the quality of life in rural America and on the farm through its constant commitment to competitive lending, expert financial services and for facilitating and sharing knowledge and resources through the Farm Credit Knowledge Center. For more information, visit www.FarmCreditKnowledgeCenter.com or www.FarmCreditofVirginias.com.
By Karen Macdonald
Hispanics and Latinos are thriving in agriculture and several organizations are dedicated to helping this success continue into the future by preparing the next generation of producers. Minorities in Agriculture, Natural Resources and Related Sciences, or MANRRS, delivers personal and professional development opportunities to its 1,400 student members, including Hispanics and Latinos. Supported in part by Farm Credit’s National Contributions Program, MANRRS holds workshops and educational conferences that help prepare students for a career in agriculture, with upwards of 60 percent of members joining the industry. In addition, the Farm Credit National Contributions Program provides support to the Latinos in Agriculture Leaders Conference and the National FFA organization, which includes 55,000 Hispanic and Latino student members.
With a U.S. population of 53 million, Hispanics and Latinos are a significant part of our culture, in agriculture and beyond. Farm Credit is proud to finance many Hispanic and Latino agricultural producers, producers like Juan Pagan-Caraballo, Orlando Cadena, the Garay family and the Garcia family, providing them the capital they need to continue running and growing their operations. In the coming weeks, we’ll be sharing some of their stories as part of our celebration of Hispanic Heritage Month. In the meantime, we’d like to say thank you to all the hard working farmers and ranchers who produce the food, fuel and fiber on which we all rely.
By Karen Macdonald
September brings shorter days with a special crispness in the air, along with the harvest of a variety of delicious summer crops. Many of us will also enjoy the start of football season and all the tailgate and halftime treats that come with the game and come from the efforts of America’s farmers and ranchers. Here’s what else we have to look forward to this month:
- Hispanic Heritage Month starts on September 15, a 30-day celebration of the heritage and culture of our Hispanic and Latino Americans citizens and the contributions they make to the U.S. Nowhere is this contribution more apparent than in farming: according to the most recent Ag Census, the number of Hispanics and Latin Americans in agriculture increased 21 percent between 2007 and 2012 to reach 67,000 farm and ranch operators. Join Farm Credit of the Virginias later this month as we celebrate the 17th International Festival at Harrisonburg’s beautiful Hillandale Park on September 27 from 12:00 PM to 6:00 PM.
- The State Fair of Virginia kicks off September 26- October 5. Come see Virginia’s finest animals and agriculture, exhibits and shows, toe-tappin’ music, fine arts and crafts, blue ribbon competitions and more!
- Of course, we also celebrated Labor Day this week, a day set aside each year to acknowledge the contributions of American workers. While the event was initially focused on more urban, unionized workers like machinists and carpenters, there can be no question that American farmers and ranchers are among the hardest working citizens in our nation – many of whom undoubtedly worked through Labor Day, caring for their crops and herds. We thank all our agricultural producers for their efforts to bring safe, abundant and affordable food to our tables throughout the year.
By Karen Macdonald
The first principle of cooperatives – Voluntary and Open Membership – contains three distinct ideas that underlie some of the key differences between traditional commercial businesses and businesses organized as cooperatives.
Just like consumers in a free economy aren’t forced to purchase from a particular store, no one can be forced to join a cooperative. With agricultural businesses, this means that even if a regional grain marketing cooperative is in place, every grain farmer within its area is not required to join the cooperative. Instead, each farmer can choose to join, or choose to market his or her own crops outside the bounds of the cooperative, perhaps even in competition with it.
At the same time, anyone who meets the membership eligibility criteria for a cooperative is allowed to join it, without discrimination. This includes discrimination based on race, ethnicity, religion, sexual orientation or disability. Using the regional grain marketing cooperative example, this means that every single grain farmer within the defined region is eligible to join the cooperative, providing they’re able to live up to the responsibilities of membership.
Membership eligibility for cooperatives varies. For a cooperative dairy processing company, it might include dairy producers within a specific geographic region; for a credit union, membership eligibility might depend on working for, or having a family member work for, a particular employer. Farm Credit’s eligibility list includes farmers and ranchers, agribusinesses and agricultural cooperatives both small and large, including name brands like Land O’Lakes and Ocean Spray.
“No matter the size or type of operation, any farmer or rancher is eligible to borrow and become a member-owner of a local Farm Credit association,” says Bill Oemichen, Cooperative Network president and CEO. “Membership is open to people of all ages, economic and ethnic backgrounds, and this is one of the many ways that Farm Credit is unique and serves local communities.”
Cooperatives are formed to conduct business activities, and the individuals or businesses who join the cooperative become members. As members, they are expected to meet certain responsibilities and they benefit from certain rights or privileges. These rights and responsibilities are explained through some of the Cooperative Principles, and include having a say in how the cooperative is governed and sharing in the profits of the business.
For Farm Credit organizations, our members are our borrowers, the very people who use our services. When a farmer, rancher or agricultural cooperative is approved for a loan – still a required step as part of sound lending practices – they become a member-owner of their cooperative, and they’ll remain a member-owner until their initial and any subsequent loans are paid off. Because of the capital needs of agriculture, many agricultural producers and businesses have been Farm Credit member-borrowers for decades and even generations.