Future Business Leaders of America (FBLA) Agribusiness Practice Test

What type of refund do cooperative patrons receive based on their input?

1. Profit-sharing refund

2. Patronage refund

3. Dividends

4. Interest refund

The correct answer is: Patronage refund

Cooperative patrons receive a patronage refund based on their input. This refund is essentially a return of a portion of the profits generated by the cooperative, distributed to members in proportion to their participation or use of the cooperative's services. The concept behind a patronage refund is to reward members for their business, reinforcing the cooperative principle that members are both owners and customers. Typically, the amount of the refund is directly related to the volume of transactions a member conducts with the cooperative, allowing the members to benefit more as they engage more with the cooperative. This system also aligns the interests of the cooperative with those of its patrons, fostering a sense of community and encouraging loyal participation.