FSA Direct Farm Loan Program Graduation Rates and Reasons for Exiting

Bruce L. Dixon, Bruce L. Ahrendsen, O. John Nwoha, Sandra J. Hamm and Diana D. Danforth

No 21452, 2006 Annual meeting, July 23-26, Long Beach, CA from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: Farm Service Agency (FSA) direct loans are intended to provide transitory credit to creditworthy borrowers unable to obtain conventional credit at reasonable terms. Farm loan program (FLP) effectiveness is measured in part by how readily direct loan borrowers graduate to conventional credit. A survey of FSA borrowers originating direct loans during fiscal years 1994-1996 is utilized to estimate graduation rates. A majority of 1994-1996 loan originators did exit the direct FLP by November 2004. A multinomial logit model indicates financial strength at origination resulted in greater likelihood of farming without direct loans approximately nine years after loan origination.

Keywords: Agricultural Finance (search for similar items in EconPapers)
Date: 2006
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