The Value of the Cooperative Model

2025 marks the International Year of Cooperatives. Additionally, each October is observed as the national Co-Op month to recognize the value of people-centered businesses.

Farm Credit East is proud to be a cooperative, collectively owned and operated by its customers. This cooperative ownership means customers have a voice in their cooperative through a customer-elected board of directors who are also customer owners.

Farm Credit East seeks additional feedback and insights through Regional Advisory Committees. These committees are comprised of a cross section of stockholders and other members of the agricultural community who meet two times annually with local Farm Credit East leadership.

Key to the success of the cooperative model is customer engagement. Learn about additional ways to get involved in Farm Credit East here.

Customers Share in Ownership

As part of their cooperative ownership, customers also share in the association’s earnings through patronage dividends. Since the patronage program was first adopted, Farm Credit East (and predecessor cooperatives) have returned more than $1.4 billion in dividends to customer owners. The Farm Credit East Board of Directors remains committed to returning to members funds not needed to operate or capitalize the business. 2025 marked the 29th consecutive annual patronage payment.

But what exactly is a patronage dividend? Simply stated, a patronage dividend is a financial benefit that cooperative members receive based on their participation and ownership in a cooperative organization. But let’s dive deeper.

How does patronage work?

When a cooperative generates profits or surplus funds, it allocates a portion of those earnings back to its members. This allocation is known as a patronage dividend.

In February 2025, customer-owners received $140 million in patronage dividends. This $140 million total patronage was a combination of $131.6 million in customary patronage dividends based on 2024 cooperative earnings. This represents, on average, a 1.25% reduction in eligible customers’ effective interest rate.

In addition, the board approved an $8.4 million one-time special patronage payment resulting from the Association’s strong financial results which exceeded business targets.

Read the full press release here

How does patronage impact your interest rate?

On average over the past three years, eligible customers have received 22% of the interest earned during the year. The level of the patronage payment is based on the interest earned from a customer’s loan during the year.

Is a patronage payment guaranteed each year?

The Farm Credit East Board evaluates a variety of business factors, including earnings, growth, capital levels and economic conditions, to determine if it is appropriate to pay patronage dividends in a given year. In evaluating these factors, the board makes a business determination as to whether Farm Credit East earnings should be returned to customer-owners in the form of patronage dividends or retained on Farm Credit East’s balance sheet to help the association continue serving agriculture, commercial fishing and forest products industries through cycles.

How is patronage paid?

Patronage payments are paid entirely in cash. Payments are taxable, so we encourage recipients to consult with their tax advisors about their specific situations.

Learn more about Farm Credit East’s Patronage Dividend Program