Fact Sheet Available for Download

MANHATTAN, Kan. – Cooperatives offer numerous benefits and advantages to their members, and a recent research study suggests that preferences among members for one benefit in particular, patronage refunds, could have important implications on a cooperative’s business plan.

“Patronage refunds are a unique cooperative benefit,” said Brian Briggeman, director of the Arthur Capper Cooperative Center and associate professor with the Kansas State University Department of Agricultural Economics.  “The decision from the cooperative’s board of directors to distribute back a portion of profits to patrons requires much consideration.  If too much patronage is refunded, then the cooperative’s financial position may be compromised; but if too little or none is refunded, then patrons may take their business elsewhere.  Also, patrons may have their own thoughts about how their refunds should be structured.”

Briggeman examined cooperative members’ preferences for patronage refunds. Through a survey of member-borrowers with Farm Credit of East Central Oklahoma, preferences for higher cash patronage refunds versus lower fixed real estate loan interest rates were assessed.

“The results suggest that strong preferences do exist among member-borrowers,” Briggeman said.  “Though this particular study focused on a financial cooperative, the results have implications among nonfinancial cooperatives as well, such as agricultural cooperatives, not to mention implications for additional research.”

To learn more about the patronage refund preferences discovered in this study, download the executive summary offered through the Arthur Capper Cooperative Center’s fact sheet series at Cooperative Members' Preference Patronage Refunds. 



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K-State Research and Extension is a short name for the Kansas State University Agricultural Experiment Station and Cooperative Extension Service, a program designed to generate and distribute useful knowledge for the well-being of Kansans. Supported by county, state, federal and private funds, the program has county Extension offices, experiment fields, area Extension offices and regional research centers statewide. Its headquarters is on the K-State campus, Manhattan.

Story by: Ashley Martin
ashley07@ksu.edu
K-State Research & Extension News