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Tax-Exempt Bond Financing for Beginning and Low-Equity Farmers:The Case of ‘Aggie Bonds’

Published online by Cambridge University Press:  26 January 2015

James M. Williamson  and
Ani L. Katchova
James M. Williamson
Affiliation:
Economic Research Service of the U.S. Department of Agriculture
Ani L. Katchova
Affiliation:
Department of Agricultural Economics at the University of Kentucky, Lexington, Kentucky, and AAAS Fellow and Visiting Scholar at the Economic Research Service, USDA, Washington, DC
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Extract

The “Aggie Bond” program was established in the 1980s to provide beginningand low-equity farmers access to capital. The bonds, which pay tax-exemptinterest, may be used by qualifying famers for purchases of farm real estateand equipment. Using Aggie Bond data collected from states and Census ofAgriculture data spanning 25 years, we examine whether the program has hadan impact on farm entrance, land ownership, and the size of operation. We donot find strong evidence that the program led to an increase in theproportion of beginning farmers; however, we find limited evidence theprogram helped beginning farmers become full land owners as well asincreased the rate of growth in the proportion of beginning farmers who arefull land owners.

Keywords

Aggie Bondsbeginning farmersland ownershipQ14Q15H20H24
Type
Session Title: Challenges of Entering and Succeeding in Southeastern Agriculture: Access to Credit, Supply Chains, and Consumers
Information
Journal of Agricultural and Applied Economics , Volume 45 , Issue 3 , August 2013 , pp. 485 - 496
Copyright
Copyright © Southern Agricultural Economics Association 2013

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