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Is Your Lender Cooperative?

This article first appeared on LancasterFarming.com as part of a new series, “Farm Credit Corner” which will print the second Saturday of each month. Be sure to look for it in your print copy!


When I hear the term “cooperative,” the first word that comes to mind is “community.” By definition, a cooperative is a group of people who work together to achieve a common goal.

Whether it’s a grain cooperative in the Midwest, where grain producers band together for the best prices; a milk cooperative here in the Mid-Atlantic, where members cooperate to get marketing benefits; or a vegetable cooperative in the city, where neighbors come together for fresh produce, cooperatives are a vibrant example of various communities working together for everyone’s success.

With so many varied cooperatives, it might be helpful to look at what makes a cooperative a cooperative. Here are the seven principles:

  1. Voluntary, open ownership: Open to all without discrimination and everyone is able to join or leave the co-op as they wish.
  2. Democratic owner control: Your voice is heard by voting for the cooperative’s directors.
  3. Owner economic participation: Members contribute equitably to and democratically control the capital of the cooperative. The benefits are returned in the form of patronage.
  4. Autonomy and independence: The cooperative is controlled completely by its members.
  5. Education, training and information: The cooperative should provide its members with training and education while also informing the general public about the nature and benefits of the association.
  6. Cooperation among cooperatives: Local, regional and national cooperatives are stronger when they work together. Farm Credit is a nationwide system of cooperative associations.
  7. Concern for the community: Cooperatives work together to help their communities develop and succeed.

So what does all of this mean? In terms of Farm Credit, it means a community of more than 500,000 members across the U.S. Those members get a chance to make their voice heard in how their association runs. This means that they can vote for the board of directors or even run for a seat themselves.

The members of a cooperative know better than anyone what agriculture and their community needs to grow. That makes them the perfect people to hold a governing position with their cooperative

One question we get all the time is, “What is patronage?” A patronage distribution is a way of returning the association’s net income to its members.

Each local Farm Credit board of directors votes on patronage distributions each year. Though past returns are never a guarantee for future ones, the Farm Credit system distributed a total of $1.2 billion to its members across the U.S. in 2015 — 2016 numbers are not yet available.

Farming itself is a community; people helping people, all to feed and clothe millions of consumers across the country.

Last year, Farm Credit celebrated its 100th anniversary. It may be a century old, but helping our customers will never go out of style. Our cooperative structure is as unique as each of our customers, and we wouldn’t have it any other way.


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