|
||
 Email This Page |
| TRADE ASSOCIATE MEMBER UPDATE
Providing Loans, Returning Profits By Barbara Wunder, FFVA communications manager Perhaps no one understands the financial roller coaster of farming and ranching better than our nation’s producers. No one, that is, except for Farm Credit. A network of independently owned and operated credit and financial services institutions, the Farm Credit system serves farmers, ranchers and agribusinesses of every size and income range across the country as well as non-farmers who live in rural areas. Farm Credit is a financial cooperative, owned by its member-borrowers since 1917, that focuses on providing agricultural loans and related services. Farm Credit has five associations in Florida: Farm Credit of Central Florida Farm Credit of North Florida Farm Credit of Northwest Florida Farm Credit of South Florida Farm Credit of Southwest Florida Of those, the Central Florida, Southwest Florida and North Florida offices are FFVA trade associate members.
“COOPERATIVE” MEANS MONEY BACK
Richard Joyner, president of Farm Credit of Central Florida, says borrowers come to Farm Credit for two primary reasons. “We are an agricultural lender. While we lend money to our customers for other things, our core business is agriculture. So we understand agriculture and we’re able to meet the diverse needs of the industry,” he said. The second important reason people come to Farm Credit is because of its structure. “As a cooperative, our profits are returned to our customers, which lowers the cost of borrowing money,” Joyner added. Its profit-sharing program, known as the Patronage Refund, makes it possible for members to significantly reduce their cost of borrowing. Since 1988, Farm Credit of Central Florida alone has declared refunds in excess of $122 million. “We have a long track record – statewide approaching $500 million in returns since about 1988,” Joyner said. The Patronage Refund is almost like a year-end gift to its members. “When we get to the end of the year, our board of directors looks at whatever profits we have and determines if it needs a portion to be set aside for capital because of growth or other reasons. What remains is divided among our patrons based on usage,” said Joyner. “It’s actually figured on interest earned on the loan. So whatever amount of interest was earned on your loan during the year, you get your pro-rata share of the profits back, depending on the size of the loan. Everybody gets an equitable return.”
Farm Credit’s fees and rates are highly competitive. In addition, its loan officers take the time to assess each individual’s needs and determine what product is right for him or her, making sure the borrower knows all costs involved up front. It finances small and large tracts, including acreages with buildings. It also offers home loans, construction loans, refinancing and lot loans as well as financing for home improvements, college tuition, vehicles, recreational properties and more for its agricultural members. The cooperative streamlines its business by focusing on lending needs. It doesn’t offer checking accounts, savings accounts, CDs or trust services. And it doesn’t require compensating balances when borrowers establish a long-term loan. Fixed, variable and adjustable rate mortgages are available.
YEARS BRING CHANGES While the system still serves “mom and pop” operations, Joyner says changes have occurred over the years. “You have a lot of complexity, a lot of vertical integration. You see a lot of LLCs and corporations and those kinds of things come into the marketplace. And so the entities we lend to have changed based on those things. We have loans that could range from $500 for an FFA project to a situation where we’re a partner in a $500 million loan to a large ag corporation. So it’s very diverse,” Joyner said. A unique aspect of the organization is its role as part of a federated cooperative. AgFirst Farm Credit Bank in Columbia, S.C., provides an opportunity for the associations to offer a loan that’s more than a Florida location can safely hold on its books. The association can participate with the bank and still meet the needs of the customer. AgFirst also provides a variety of services such as computer operations, payroll, human resources and print production to its member associations.
Farm Credit began as a mortgage lender through the old Federal Land Bank. Later, it became a chattel and crop lender through the Production Credit Association and more recently merged into one institution. Congress created the original system in 1916 because rural residents could not borrow money. Banks steered away from rural lending because of risk. Seeing the need, Congress created a mortgage lending cooperative. Seed money Congress provided originally was later paid back. So while Farm Credit is chartered by the federal government, it has evolved to become a profitable business that operates safely and soundly, regulated by the Farm Credit Administration, and insured by the the Farm Credit System Insurance Corporation, which resembles the FDIC. If you’ve been in farming for awhile, you know it takes money. And there’s a pretty good chance you’ll need some credit for one reason or another – worn-out equipment, capital improvements, expansion, the list goes on. Farm Credit understands the unique credit needs farmers and ranchers. Explore the possibilities of being a part of this cooperative. It could be an important part of your business’s and family’s future. “I think it’s one of the greatest success stories for cooperatives in this nation,” said Joyner. “We provide a very valuable service to agriculture by making capital available and doing it on a consistent basis. I always tell people if you’re in agriculture, it doesn’t matter whether you borrow from us or not. Because we’re in the marketplace, we’re creating an advantage for you because we keep people on their toes.” ### Note: Richard Joiner will retire as president of Farm Credit of Central Florida effective March 31, 2008. Joyner had served as president since April 1997 and has been with the Farm Credit System for 35 years. Succeeding Joyner will be Reginald T. Holt, currently serving the association as Senior Vice President and Director of the Agribusiness Lending Group.
|
|
©2008 Florida Fruit & Vegetable Association
| . |