This is the lowest amount in the past five years. The top 100 cooperatives have long maintained a tradition of strong patronage refund practices. Only four cooperatives used non-qualified refunds in 1998, down from seven in 1997. A small number of cooperatives also distributed cash dividends on stock issued to members. Cooperatives paid out a record amount of these dividends in 1998.
Most cooperatives retain a portion of their net margins as unallocated reserves.
These reserves provide a source of growth capital for the cooperatives, a cushion for members' allocated equities in the event of a loss and a bonus to members from non-member business. Distributions to unallocated equity represented seven percent of net margins. This was the lowest amount in the last five years. These margins were taken out of the unallocated account. This was the lowest amount paid in the last five years.