Higher Off-farm Income Enables Farmers to Borrow More and Increase Investment in Their Operations

Nigel Key

Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, 2022, vol. 2022

Abstract: Most agricultural lenders extend loans based on their assessment of a borrower’s ability to repay debt. Because of this, some farmers may not be able to secure as much credit as they would like for their farm businesses. A lack of credit could prevent these farmers from expanding production or could restrict investments in productivity-enhancing technologies. Off-farm income may help some farm households qualify for larger loans, which could lead to higher farm output, productivity, and profit. Using farm-level data from USDA’s Agricultural Resource Management Survey, the USDA, Economic Research Service (ERS) estimated the effect of off-farm income on farm borrowing, investment, operation size and productivity from 2007 to 2016.

Keywords: Agribusiness; Agricultural Finance; Farm Management; Financial Economics; Industrial Organization; Labor and Human Capital; Land Economics/Use (search for similar items in EconPapers)
Date: 2022
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Journal Article: Higher Off-farm Income Enables Farmers to Burrow More and Increase Investment in Their Operations (2022)
Journal Article: Higher Off-farm Income Enables Farmers to Borrow More and Increase Investment in Their Operations (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uersaw:329721

DOI: 10.22004/ag.econ.329721

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