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Financial Control and Variable Amortization Under Uncertainty: An Application To Texas Rice Farms

Published online by Cambridge University Press:  28 April 2015

Md. Lutfor Rahman  and
Peter J. Barry
Md. Lutfor Rahman
Affiliation:
Bangladesh Agricultural University
Peter J. Barry
Affiliation:
University of Illinois
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Extract

Variability in commodity prices and yields, together with greater financial obligations for highly leveraged farms, have added much uncertainty about farmers' debt servicing capacity (Barry and Fraser; Hanson and Thompson). As a result, financial responses must come more to the forefront in farmers' risk management, through emphasis on fuller development and application of the financial control process; and development of specific financial programs and instruments for dealing with random variations in debt servicing capacity (Baker; Lee). An example of the second response is the variable amortization payment plan VAPP suggested by Baker and tested empirically by Stone for use in farm mortgage lending.

Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 13 , Issue 1 , July 1981 , pp. 99 - 103
Copyright
Copyright © Southern Agricultural Economics Association 1981

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References

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