Farmers' Credit Risks and Liquidity Management

Peter J. Barry, C. B. Baker and Luis R. Sanint

American Journal of Agricultural Economics, 1981, vol. 63, issue 2, 216-227

Abstract: Credit risks are unanticipated variations in costs and availability of credit that arise from forces in financial markets or from lenders' responses to risks in agricultural markets and farmers' creditworthiness. An extension of mean-variance portfolio theory shows how credit risks combine with other financial and business risks to determine total risk. Empirical evidence from lender surveys about risks shows that farmers' credit is positively correlated with changes in farm income, although the correlation is stronger for capital credit than for operating credit, and that variability in fund availability from rural banks has contributed to high credit risks.

Date: 1981
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Persistent link: https://EconPapers.repec.org/RePEc:oup:ajagec:v:63:y:1981:i:2:p:216-227.

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