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Determinants of Restructured Farm Loan Performance

Published online by Cambridge University Press:  05 September 2016

Glenn Pederson ,
Ananth Rao  and
Michael Boehlje
Glenn Pederson
Affiliation:
Department of Agricultural and Applied Economics at theUniversity of Minnesota
Ananth Rao
Affiliation:
Department of Agricultural and Applied Economics at theUniversity of Minnesota
Michael Boehlje
Affiliation:
Department of Agricultural and Applied Economics at theUniversity of Minnesota
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Abstract

A probabilistic model is applied to cross-sectional data to identify determinants of post-restructure performance of Federal Land Bank loans. The results indicate that restructured loans were sensitive to factors that determine the debt repayment burden and the repayment ability of the restructured farm operations. Loan performance is found to be relatively more sensitive to the levels of the post-restructure interest rate and cash farm income than to the financial structure and leverage position of the restructured farm. The relationships between the post-restructure interest rate, cash farm income level, and the probability of loan performance are illustrated.

Keywords

restructured farm loansperformanceFederal Land Bank
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 23 , Issue 2 , December 1991 , pp. 39 - 48
Copyright
Copyright © Southern Agricultural Economics Association 1991

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