Minority Farmer and Rancher Delinquency and Local Cultural Climate: Evidence from Farm Service Agency's County Office Committees

Lawson Connor, Bruce L. Ahrendsen, Charles B. Dodson and Logan Moss

American Journal of Agricultural Economics, 2025, vol. 107, issue 5, 1335-1356

Abstract: Farm delinquency is linked to many negative indicators of farm survival, including increased risk of bankruptcy and farm failure. Minority farmers and ranchers (MFR) have been found to exhibit higher rates of delinquency on U.S. Department of Agriculture (USDA) Farm Service Agency (FSA) loans compared to their non‐Hispanic White male counterparts. These findings persist even after accounting for economic/financial factors expected to predict loan repayment performance. In this study, to further explore the existing discrepancy between loan default rates for MFR and White, non‐Hispanic borrowers, we look more broadly than financial indicators and introduce MFR representation on the FSA County Office Committee (COC) as a proxy for the local cultural climate in an agricultural community. Using changes in COC membership demographics over time and across counties, this study suggests that MFR representation on the COC is associated with a lower probability of MFR delinquency by roughly 10 percentage points. With the probability of delinquency also being about 10 percentage points higher among MFR, the effect represents a significant improvement in loan repayment outcomes for the group. The FSA COCs represent an important linkage between the USDA and the local agricultural community. Moreover, elected minority representation on COCs can be considered as indicative of supportive cultural climates for minorities in agriculture. Given that COC membership composition may represent a proxy for local cultural climate in agriculture, this research raises interesting questions about the potential relationship of MFR representation and community engagement, to FSA program performance.

Date: 2025
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https://doi.org/10.1111/ajae.12546

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Persistent link: https://EconPapers.repec.org/RePEc:wly:ajagec:v:107:y:2025:i:5:p:1335-1356

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