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FARM CREDIT SYSTEM — Helping farmers for 100 years

John Barnard

John Barnard


The Farm Credit System has been helping farmers in rural and agricultural communities for 100 years. Starting with 12 federal land banks a century ago, the borrower-owned system now has nearly half a million member-borrowers nationwide and provides more than $200 billion in loans and leases to farmers, homeowners, agribusinesses and others who live and work in rural parts of the U.S.

“The agricultural lending cooperative was federally chartered in 1916 to help farmers get access to credit markets,” said John Barnard, president of the Mississippi Division of First South Farm Credit, part of the national network of cooperatives.

Barnard said First South is a Farm Credit lending cooperative and its board of directors, managers and employees have expertise and experience in agriculture.

Also, they are owned by the members who elect member to serve on the board of directors.

“It operates very similar to other co-ops,” he said.

First South has more than 6,300 members with outstanding loans totaling more than $1.7 billion through its network of 42 branch offices in Mississippi, Alabama and Louisiana.

Some farm credit cooperatives including First South offer annual dividends in the form of patronage to eligible member-borrowers based on the association’s earnings and financial performance.

In March, Ridgeland-based First South announced that it will distribute $12.5 million in patronage refund checks in April.

“The amount they receive is based on their level of participation in the cooperative,” said Barnard. “The larger the loan, the bigger the patronage refund.”

Roger Chappell, CEO of First South, said in announcing the refund, “When we distribute our profits to our borrowers, it reduces their effective cost of borrowing,” Chappell stated, “and it proves there are distinct financial benefits in doing business on a cooperative basis.

We offer a competitive interest rate up front, then return a portion of our profits back to our membership through the patronage program.”

The board of directors determines the total patronage amount based on profits and capital needs of the association.

Barnard said the patronage refund is “a huge incentive” to those eligible to join the cooperative. This year’s refund gives eligible members approximately a 12 percent reduction in the interest they pay.

It also attests to the sound operation of the cooperative. “This is the 21st consecutive year we have paid the patronage refund,” said Barnard. During that time, First South’s total patronage paid to member-borrowers is more than $299 million.

Gaston Lanaux, chairman of the First South Board of Directors, said in a statement announcing the refunds: “First South’s 2015 earnings represented another year of strong business performance.  As a cooperative, we are proud to continue our tradition of having our member-borrowers share in our success and profits.”

Barnard said as the national organization celebrates its 100th year milestone in 2016 it also is promoting its initiative to “continue to look at avenues to finance non-traditional farms,” he said, as well as providing loans to more young, beginning and small farmers.


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