Date of Graduation


Document Type


Degree Name

Bachelor of Science in Agricultural, Food and Life Sciences

Degree Level



Agricultural Economics and Agribusiness


Nalley, Lawton Lanier

Committee Member/Reader

Ahrendsen, Bruce


Farm Credit is a unique banking structure, as it is a cooperative which pays patronage dividends to its members. As such, the rates for loans (nominal interest rates) that Farm Credit offers can be slightly higher than larger commercial banks because the patronage payment can offset some, all or more of interest rate difference, which results in an effective rate. Farm Credit, like other globally evolving industries, must continuously look for ways to differentiate themselves to compete for new customers and retain existing ones. Thus, this study sets out to survey the members of Western Farm Credit of Arkansas to 1) obtain a sense of how competitive Farm Credit is amongst its competition in terms of rate, patronage, and other factors that retain existing customers and compete for new customers, 2) elicit employee opinions on the changing needs of Farm Credit’s customers, and 3) generate discussion about where future resources could be allocated to increase Farm Credit’s competitiveness. The primary goal of this study was to help Farm Credit of Western Arkansas better assess the needs of their employees and customers, as changing technology allows for better efficiency in the banking sector. The survey included 72 out of 116 employees of Western Farm Credit. From the results, we can conclude that employees think that adopting electronic banking (e-notary, e-sign loan documents, and e-files) will be desired by both current and future customers. It was found that Farm Credit employees believe that current customers value patronage payments more than potential future customers. Conversely, it was discovered that potential future customers will value lower rates more than patronage dividends. These findings suggest that this dichotomous demand can be remedied if Farm Credit could advertise more effectively to potential future customers to explain what an “effective rate” is and its associated benefits. That is, more thoroughly communicate why a higher nominal interest rate with patronage payments could be more desirable than a lower nominal rate without patronage payments. Other recommendations via this analysis included: market and advertise more to obtain new customers, consider e-sign loan documents, and train all employees on the online banking software.


Farm Credit of Western Arkansas, Farm Credit, Efficiency, Paperless, Patronage, Interest Rates, Employees