Factors affecting the agricultural loan decision-making processJohn Nwoha, Bruce L. Ahrendsen, Bruce L. Dixon, Daniel M. Settlage and Eddie C. Chavez Agricultural Finance Review, 2007, vol. 67, issue 1, pages 35-53 Abstract: The Farm Service Agency (FSA) direct farm loan program provides credit to family-sized farms including those operated by beginning farmers and socially disadvantaged applicants. Approximately 37% of all U.S. farms are estimated to be eligible for FSA direct loans when farm size, credit needs, farming experience, and occupation are taken into account. However, market penetration rates for various borrower cohorts range from 0.8% to 4.6% for FY 2000S2003. In general, beginning farmers have weaker financial characteristics than non-beginning farmers. Yet, the same result is not found when comparing socially disadvantaged farmers with non-socially disadvantaged farmers, such that there are few significant differences or the differences in financial characteristics are mixed. Overall, results indicate FSA direct farm loan borrowers have weaker financial characteristics than eligible, non-FSA direct farm loan borrowers, implying FSA is serving farmers likely to be denied credit by commercial lenders. Keywords: Beginning farmer; Farm Service Agency; Federal direct loan; Socially disadvantaged (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: http://EconPapers.repec.org/RePEc:eme:afrpps:v:67:y:2007:i:1:p:35-53 Ordering information: This journal article can be ordered from Access Statistics for this article Agricultural Finance Review is edited by Professor Calum G. Turvey More articles in Agricultural Finance Review from Emerald Group Publishing |
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