Ever wondered why your local farm credit association like AgTexas is so different from other financial institutions? It’s because we are a cooperative. This means AgTexas operates under a business model that's owned and controlled by its members. This unique structure brings a whole host of benefits that allow us to successfully serve farmers, ranchers, and rural property owners. Here are five examples that highlight the advantages of a cooperative business model:
1. Member-Owned and Controlled: Imagine a financial institution where you actually have a say in how it's run. That's the beauty of a cooperative. This means AgTexas is owned by the very people they serve: farmers, ranchers, and rural property owners in Texas. Because of this, every decision made by AgTexas is in the best interest of our members. Our tagline “Your Success - Our Purpose” is genuine. As a cooperative we are dedicated to the success of our member-owners because they are the reason we are in business. It’s a mutual partnership, not just a transactional banking relationship.
2. Board of Directors with Agricultural Experience: One of the key advantages of a cooperative business model is having a board of directors. These individuals are elected to serve on the AgTexas Board and have ultimate say in our business decisions. Each board member is deeply involved in the agricultural industry, all of which are either farmers, ranchers, and/or rural business owners. This firsthand experience gives them a unique perspective on the challenges and opportunities facing the industry, enabling them to make informed decisions that benefit our members.
3. Cooperatives - Specifically Farm Credit: Because AgTexas is a part of the Farm Credit System, we know the ins and outs of the agricultural industry. Rural America is all we serve - we don’t have another customer base. This means AgTexas understands the unique challenges and opportunities that farmers and ranchers face because we have witnessed it firsthand. This allows us to offer specialized services and expertise that a commercial bank usually can’t offer. Whether you need a loan to purchase new equipment, refinance your land, or mitigate your risk, AgTexas is invested in supporting you every step of the way.
4. Patronage Program: As a member-owned cooperative, AgTexas members own stock in the association. That means that each year we pay a portion of our earnings back to our members in a dividend check. The amount varies depending upon the profitability of the association for a fiscal year. This unique benefit allows our member-owners to mitigate some of the financial burden of borrowing money and accruing interest. The resilient and hardworking qualities of our members directly contribute to the success of the Association. Based on the 2023 year-end results, AgTexas distributed $28.6 million in cash dividends to our member-owners.
5. Sustainable Future Through Consultative Lending: As previously mentioned, the cooperative business model enables AgTexas to have one primary area of focus - supporting the agriculture industry. We are committed to sustainable agriculture because without that, we wouldn’t have a viable business and people wouldn’t have food to eat or clothes to wear. One way we accomplish sustainability is through consultative lending. Unlike traditional lending practices, our lenders tailor their services to the farmer or rancher's best interest. They look at our member’s future plans, potential growth opportunities, and overall health of the individual’s operation. This guidance empowers borrowers to make informed decisions based on the unique needs of their business.
At the core of our association, AgTexas is member-owned and member-focused. This is only possible due to the cooperative business model we operate under. The next time you or someone you know is looking for a financial institution that keeps the member at the forefront of their decisions, consider the benefits of a cooperative. AgTexas Farm Credit Services truly has a vested interest in the success of our member-owners – our partners in business. With a strong commitment to the agricultural community, we strive to ensure that Your Success is Our Purpose.
Ag Always,
Hadley Chote