Cash Dividend Program Returns Money to Your Pocket
When you become part of the Carolina Farm Credit family, you have access to a unique program that returns money to you. It is called the cash dividend or patronage program and in its 34-year history it has returned more than $546 million to customers’ pockets.
“Cash dividends are based on the fact that we are a cooperative which means our borrowers are actually our owners,” explains Ryan Bledsoe, a lender with Carolina Farm Credit. “They purchase stock when they do their initial loan with us and that is what allows them to become an owner member in the cooperative.”
Feedback from owner members is that the cash dividend program is a big boost to them. (Owner member Steve Bullins shares what the program has meant to his family in part 1 of this series.) Ryan says that often owner members, particularly new ones, forget about the program until the springtime when the checks arrive. “They love it because the check will come in the mail or get direct deposited to their account.”
Ryan shares several features of Farm Credit and the cash dividend program:
- The Carolina Farm Credit Board of Directors is made up of people who are also farmers and live in rural America. They want to see the company succeed and to be able to provide those cash dividends back to the customers. They are in tune with what is going on in the agricultural world and how things are affecting the agricultural community. They understand both agriculture and rural America’s needs. Each year, the Board reviews the financial statements of the cooperative, retain some earnings to keep it in a good financial position, and share the remaining profits with owner members. Not too many other financial institutions can say that they put money back in their customers’ pocket.
- The patronage payout usually accounts for 1 percent off the rate of the loan. Carolina Farm Credit rates are competitive but when dividends that are returned to customers are factored in, that benefit is effectively a 1 percent reduction in their rate.
- Customers have a voice in the company. As owner members, they can vote on the Board of Directors. Members of the Board of Directors are accessible and owner members can call them and discuss cooperative issues with them.
- Farm Credit was established to assist with financing for rural America and the agricultural community. In addition to the Board, several employees are farmers too. We can relate to our customers and what they are going through and what they are trying to do. That’s not always the case with a regular bank in which investors may not actually be a customer. With Farm Credit, you are an owner member of the cooperative.
- Cooperatives can focus more on our customers. Farm Credit is a relationship lender, not transactional. We are not going to do just one transaction and not ever see you again. We want to stay in contact with our customer owners and build a relationship with them through their agricultural careers.
- Farm Credit values its role in the community. We stay involved in the community and know what’s going on. We try to give back to the community as well. We’ve got scholarship programs and grant opportunities for rural nonprofit organizations with ag-related projects. Most of our customers are involved in the community and that helps further our relationship with them as well.
- Farm Credit is a family. That includes both employees and owner members.
- The cash dividend program has a proven track record with its 30-plus-year history of putting money back into customer members’ pockets.
- With our cash dividend program, each owner member can use the money in whatever way they choose. Some pay down their loans, some buy equipment or make upgrades to their farms, some build up cash savings, and some may take a much-needed vacation. It’s up to the owner member how they spend the money.
- Carolina Farm Credit offices are located throughout the 54-county region, making it easier for customer owners to access their local Carolina Farm Credit representative and for that representative to have a chance to visit farm operations and stay aware of customers’ needs, concerns, and successes.
To learn more about Carolina Farm Credit and to speak with a lender near you, visit our website for a list of our offices and contact information. Our website also has a brief video about the cash dividend program and a cash dividends chart that shows how much we’ve given back to our customer owners since 1988.
In part 1 of this series, customer owner Steve Bullins talks about how the cash dividend program has given a boost to his son’s poultry operation.
By Leah Chester-Davis