How2Day: Agricultural Credit Associations

More than 2 million Americans worked in the agriculture, forestry and fishing industry as of 2008, according to the U.S. Bureau of Labor Statistics. To help fund the activities of businesses in this large industry, a variety of special agricultural lenders exist. Among these are Agricultural Credit Associations, which provide short and long-term business loans to farmers, ranchers, producers and harvesters of aquatic products, according to the U.S. Farm Credit Administration.

Capital Farm Credit has its headquarters in Bryan, Texas, and operated 72 branches throughout the state as of November 2010. The company is association-owned, meaning that individuals who receive loans through the organization receive a small stake in the organization. As stock owners, borrowers have the right to vote on decisions affecting the company and can receive dividends that may reduce the balance of their loans. From 1997 to 2010, the company gave $265 million in total dividends to its borrower-members.

The association began during the 1920s and lends not only to professionals in the agricultural industry, but also to individuals who live in rural areas. The association grants both personal loans for the purchases of residences and commercial loans for the purchase of farms, equipment and other costs.

The Farm Credit of the Virginias has 23 branch locations as of November 2010. It provides loans for rural residents and agricultural workers in the states of Maryland, Virginia and West Virginia. The association formed in 1917 and is entirely owned by its borrowers. These members receive dividend payments that can reduce their loan balances or pay a cash sum.

The company grants loans for equipment, land, agricultural buildings, the establishment of new agricultural businesses and rural homes as well as for activities related to the forestry industry. Farm Credit of the Virginias also offers insurance products to customers, including personal life insurance and commercial insurance like farm vehicle liability.

American AgCredit began in 1916 and has its headquarters in Santa Rosa, California. The agricultural credit association provides financing to agricultural professionals and rural residents in the states of California, Nevada, Kansas and Oklahoma. The company had more than 30 branch offices as of November 2010. The organization is the seventh largest company of its kind in the United States. From 2005 to 2010, the association paid more than $80 million in dividends to its borrowers, which each receive ownership in the company. American AgCredit offers commercial equipment and mortgages and personal home loans. The organization also has lines of credit available for borrowers, allowing them access to a set sum of money that they can draw from as needed.

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