Credit Scoring Models: A Comparison between Crop and Livestock Farms

Seda Durguner, Peter J. Barry and Ani Katchova

No 21431, 2006 Annual meeting, July 23-26, Long Beach, CA from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: This paper uses FBFM (Illinois Farm Business Farm Management Association) data to analyze several key factors in the decision to categorize borrowers into acceptable or problematic and to classify borrowers across five classes. Net worth does not play significant role in the decision process for livestock farms, whereas it is significantly important for crop farms. For livestock farms, tenure ratio is not significant across classes and is generally not significant across categories depending on the cut off point used to describe acceptable or problematic borrower. However, it is significant for crop farms. Working capital to gross farm return, return on farm assets, and asset turnover ratio are all significant for both farm types. The operating expense to gross farm return is not an independent variable for livestock farms whereas an independent and significant variable for crop farms.

Keywords: Financial; Economics (search for similar items in EconPapers)
Pages: 31
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea06:21431

DOI: 10.22004/ag.econ.21431

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