Hostname: page-component-586b7cd67f-t7fkt Total loading time: 0 Render date: 2024-11-29T08:46:47.215Z Has data issue: false hasContentIssue false
  • English
  • Français

Some Evidence on the Relationship Between Loan Insurance and the Supply of Agricultural Credit From Commercial Banks

Published online by Cambridge University Press:  28 April 2015

L. Upton Hatch  and
Wesley N. Musser
L. Upton Hatch
Affiliation:
Department of Agricultural Economics, University of Georgia, Athens, Department of Agricultural and Applied Economics, University of Minnesota
Wesley N. Musser
Affiliation:
Department of Agricultural and Applied Economics, University of Minnesota, and, Department of Agricultural Economics, University of Georgia at Athens
Get access Rights & Permissions [Opens in a new window]

Extract

Insured farm loans have evolved to be an important component of the federal role in the agricultural credit subsector. Currently, agricultural credit is supplied by three sets of institutions: (1) private firms and individuals, (2) the quasiprivate cooperative Farm Credit System, and (3) the federal public programs of the Farmers Home Administration (FmHA) and Small Business Administration. Statuatory authority currently limits federal programs to a residual role of lending to borrowers who cannot receive credit from the other segments. Though a large component of public programs consists of emergency loans in areas of economic disaster, the FmHA also makes farm operating and real estate loans to farmers who meet the statuatory requirements. The source of funds for some FmHA loans is federal appropriations and money market certificates. However, guaranteed loans have become an important component of FmHA programs. These loans are made in cooperation with other agricultural finance agencies. The public agency insures or guarantees repayment of the loan. The cooperating firm negotiates the loan and provides the funds. Usually the interest payment is below the current market interest rate structure.

Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 12 , Issue 2 , December 1980 , pp. 25 - 29
Copyright
Copyright © Southern Agricultural Economics Association 1980

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Akerloff, George A. “The Market for ‘Lemons&: Quantity Uncertainty and the Market Mechanism.” Quar. J. Econ. 84(1970):488–500.CrossRefGoogle Scholar
Barry, Peter J. “Rural Banks and Farm Loan Participation.” A mer. J. Agr. Econ. 60(1978):214–24.CrossRefGoogle Scholar
Barry, Peter J.Hopkins, John A., and Baker, C. B.. Financial Management in Agriculture, 2nd edition. Danville, Illinois: The Interstate Printers and Publishers, Inc., 1979.Google Scholar
Boehlje, Michael, Harris, Duane G., and Hoskins, James. “A Modeling Approach to Flows of Funds in Localized Financial Markets.” Amer. J. Agr. Econ. 61(1979):145–50.CrossRefGoogle Scholar
Carlin, Thomas A. and Wise, James O.. An Economic Analysis of the Georgia Development Authority. Ga. Ag. Exp. Sta. Res. Rep. #3. May 1967.Google Scholar
Krause, Kenneth R. and Kyle, Leonard R.. “Economics Factors Underlying the Incidence of Large Farming Units: The Current Situation and Probable Trends.” Amer. J. Agr. Econ. 52(1970):748–60.CrossRefGoogle Scholar
Lipton, Michael. “Agricultural Risk, Rural Credit, and the Inefficiency of Inequality,” in Risk, Uncertainty and Agricultural Development, James Roumasset, A.et al., editors. New York: Agricultural Development Council, 1979.Google Scholar
Markowitz, Harry M. “Portfolio Selection. “ J. Fin. 12(1952):77–91.Google Scholar
Mullineaux, Donald J. “Economies of Scale and Organizational Efficiency in Banking.” J. Fin. 33(1978):259–80.Google Scholar
Musser, Wesley N. and Marable, Ulysses Jr. “The Impact of Energy Prices on Optimum Machinery Size and the Structure of Agriculture.” S. J. Agr. Econ. 8(1976):205–11.Google Scholar
Robison, L. J. and Barry, Peter J.. “Portfolio Adjustments—An Application to Rural Banking.” Amer. J. Agr. Econ. 59(1977):311–20.CrossRefGoogle Scholar
Roe, Terry and Nygaard, David. “Subjective Production Function Parameters and Risk: Wheat Production in Tunisia.” Staff Paper P79-43, Department of Agricultural and Applied Economics, University of Minnesota, Dec. 1979.Google Scholar
Sharpe, William F.Portfolio Theory and Capital Markets. New York: McGraw-Hill Book Company, 1970.Google Scholar
Smith, Adam.An Inquiry into the Nature and Causes of the Wealth of Nations. New York: Random House, Inc., 1937.Google Scholar
U.S. Department of Commerce, Bureau of the Census. “Estimates of the Population of Georgia Counties and Metropolitan Areas: July 1, 1972 and 1973.” Current Population Reports, Series P-26, No. 92. Washington, D.C. Oct. 1974.Google Scholar
U.S. Department of Commerce 1974 Census of Agriculture, Preliminary Report, No. Ag. 74-P-13. Washington, D.C. Aug. 1976.Google Scholar
U.S. Department of CommerceStatistical Abstract of the United States 1975. Washington, D.C. 1975.Google Scholar