AgGeorgia Farm Credit, a Georgia agricultural lending cooperative, has redeemed $10.5 million of allocated retained earnings to its member/borrowers. Earlier this year the company returned $5.1 million in patronage to members who did business with the cooperative in 2008.

Explaining AgGeorgia's allocated retained earnings program, Bill Newberry, CEO of the financial cooperative, said, "This $10.5 million represents a portion of the patronage dividend paid in 2002 and invested as capital in the cooperative. For the past seven years this capital has added to our strong financial position. For our customers, this means access to credit at a fair price. It also means that their financial cooperative has the staying power to work with them through challenging cycles in agricultural industries."

The $10.5 million distribution is based on 2002 profits. At that time, the AgGeorgia Farm Credit board of directors allocated a share of the financial cooperative's profits to each member/borrower and invested the rest in capital with the understanding that the amount would ultimately be retired and paid out to member/borrowers when it was no longer needed.

"Even in tough economic times, AgGeorgia Farm Credit had a good year and we are pleased to share our success with our borrowers," said Frank Wright, chairman of the AgGeorgia Farm Credit board of directors and farmer from Talking Rock, Georgia. "Since 1988 AgGeorgia Farm Credit has returned a total of $259 million in cash to its member/borrowers through patronage refunds and surplus revolvements."

AgGeorgia Farm Credit was able to redeem allocated retained earnings again this year because it continues to build its capital position.

"The board and I are committed to being good stewards of our customer's money and operating a successful cooperative. By distributing our profits to our borrowers it reduces their effective cost of borrowing. We like to say that we 'put our profits in our borrower's pockets,'" Newberry added.

AgGeorgia Farm Credit, a farmer owned cooperative, makes longterm farm and country home loans, intermediate-term loans for machinery, equipment and buildings and short-term production loans. Other financial services available through AgGeorgia Farm Credit are credit life insurance, crop insurance, appraisal services and leasing programs.

At December 31, 2009, AgGeorgia had approximately $1.1 billion in loans outstanding to over 3,900 members. The cooperative has 20 branch offices including one in Wilkes County and serves 79 counties in Georgia.