Dividend Program

Sharing Our Profits with You

When you become a part of AgGeorgia, you're not just a customer—you're an owner. As such, you'll get to enjoy a share of our profits each year. Since 1988, we've paid out over $478 million in cash to our members.* Read on or try our dividend calculator to see how you'll benefit from our Dividend Program.

What is a dividend?

A dividend is a way of distributing the Association's net income to its member-stockholders. A member's refund is based on the proportion of interest earned on his or her loan to the total interest earned by the Association. A dividend may be paid in cash, allocated surplus, stock, or any combination of these items; however, since 2021 our Board of Directors has elected to issue all dividends in cash. A dividend is a way to refund a portion of the interest you paid on your loan.

How do dividends benefit Farm Credit borrowers?

Dividends benefit borrowers by reducing their cost of borrowing. Farm Credit charges competitive rates on its loans comparable to those charged by other lenders for similar loans. However, a major difference between Farm Credit and other lenders is that Farm Credit returns its profits to its borrowers. When you receive a dividend from Farm Credit, your effective cost of borrowing is reduced. Since Farm Credit distributes refunds based on the amount of interest earned on each member's loan, the more business you do with Farm Credit, the larger your potential dividends.

How do dividends benefit your Farm Credit Association?

Dividends can help Farm Credit reduce its tax expense and maintain a strong capital position. This helps the entire membership because an Association with a strong capital position is better able to offer competitive interest rates, ensure a constant supply of credit and provide for the retirement of member equity held in the form of allocated surplus. Unlike other corporations where profits are taxed twice, when earned by the corporation and when distributed to owners as dividends, a cooperative's profits are taxed only once when they are distributed as a dividend. Farm Credit is allowed a tax deduction for the amount of net income that it distributes in the form of a qualified dividend. Therefore, to effectively manage the Association's tax expense and maintain a strong capital position, the board of directors may elect to distribute taxable earnings to members as a qualified dividend. A qualified dividend is one in which at least 20 percent is paid in cash and the remainder in stock or qualified allocated surplus. Since 2021 AgGeorgia Farm Credit’s Board of Directors has elected to issue all dividends in cash.

What is allocated surplus?

Members, through their boards, elect to retain a portion of earnings or a portion of each member’s dividend to meet the capital needs of the cooperative. When a portion of each member’s dividend is retained or allocated to that member’s equity account, it is called allocated surplus. AgGeorgia, like other Farm Credit associations, strives to operate efficiently and maintain a strong permanent capital base. It is the board’s responsibility to continually monitor the financial position of the Association. The board can vote to retire allocated surplus when it determines the Association does not need it for capital.

How is my dividend issued?

The cash portion of your dividend may be issued to you by check or recorded on the Association's books in a special account. In addition, each time a dividend distribution is issued, Farm Credit will notify eligible members of their dividends. The notification will include a breakdown of the amount paid in cash (by check or dividend payable entry) and the amount paid in allocated surplus or stock (since 2021 our Board of Directors has elected to issue all dividends in cash). When any portion of a dividend is paid in cash, your board of directors may elect to set a minimum check amount as a means of controlling expenses. Cash distributions below the minimum check amount are recorded in a special account called dividend payable. On notification of dividend, refunds placed in dividend payable appear under "Not Distributed." Members may request a check for monies in their dividend payable accounts, request that these amounts be applied to their loans, or leave these distributions on account with the Association.

Will I receive a tax notification regarding my dividend?

Yes. In January, AgGeorgia Farm Credit will send you an IRS Form 1099. This form will show the total of all taxable dividends issued to you during the previous year.

How You'll Benefit

Here's the bottom line: if AgGeorgia's capital position and earnings are strong enough, you're going to receive a portion of our profits. Period.

Our Board of Directors—a governing body comprised of agriculture professionals and rural landowners that are democratically elected by you and your peers—make this determination about our capital position. After examining our earnings and approving a dividend, you'll receive a check based on your contributions to AgGeorgia's net earnings in the previous year.  While the amounts vary, over the last five years we’ve averaged an annual dividend distribution of over $14 million, effectively lowering our average member's stated rate by over 1%.  Not only that, we’ve been consistent—distributing these payments back to members for the last 36 consecutive years.

There are no rules or requirements dictating how you can or cannot use this money. It's yours to do with as you wish!

Dividend Distribution History

Our dividend chart shows the numbers for recent years.

*Includes numbers from AgGeorgia Farm Credit predecessors