{"title":"Guest editorial: Nontraditional Credit in U.S. Agriculture","authors":"Brady E. Brewer, J. Ifft, N. Key","doi":"10.1108/afr-04-2022-187","DOIUrl":"https://doi.org/10.1108/afr-04-2022-187","url":null,"abstract":"","PeriodicalId":46748,"journal":{"name":"Agricultural Finance Review","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2022-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48261224","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-02-22DOI: 10.1108/afr-04-2021-0052
A. Torres
PurposeThe purpose of this paper is to investigate the adoption of two categories of agricultural technologies among beginning farmers (10 years or less of experience) operating in the specialty crops industry. A secondary goal is to characterize the beginning farmers' population in the specialty crops industry and compare them to more experienced farmers (more than 10 years of farming experience).Design/methodology/approachUsing a series of regressions, this paper tests the hypothesis that beginning farmers are more likely to adopt agricultural technologies such as growing technologies (i.e. hydroponics and hoop houses) and value-added (VA) technologies (drying and cutting produce into customer-ready portions) relative to counterparts. Using a unique primary collected dataset of specialty crops farmers, the dependent variable for each model is the binary decision to adopt each agricultural technology, while the main variables of interest are the dummy variables beginning farmers and the interaction terms created between beginning farmers and land farmed, percent of land rented, crop diversification, local sales, and part-time farming.FindingsFarmers' characterization suggests that, on average, beginning farmers are more likely to adopt growing technologies than more experienced farmers. However, after controlling for other determinants of adoption, there is no significantly difference between the two groups. Lastly, results suggest that beginning farmers are more likely to adopt VA technologies relative to experienced farmers.Originality/valueWhile the adoption of agricultural innovations can lead to increases in economic and environmental resilience, little is known about beginning farmers adopting agricultural technologies, and studies are even less common for specialty crops operations. As the world population continues to grow rapidly, the demand for agricultural food products is expected to increase up to 100% between 2010 and 2050. This growth places additional stress on the limited access to land and water for agricultural production. Farm profitability can be boosted by increasing economies of scope through the use of growing technologies that increase yield or by adding value to specialty crops. The increasing global demand for food makes it imperative to understand what influences the adoption of agricultural technologies among beginning farmers growing food crops.
{"title":"Exploring the adoption of technologies among beginning farmers in the specialty crops industry","authors":"A. Torres","doi":"10.1108/afr-04-2021-0052","DOIUrl":"https://doi.org/10.1108/afr-04-2021-0052","url":null,"abstract":"PurposeThe purpose of this paper is to investigate the adoption of two categories of agricultural technologies among beginning farmers (10 years or less of experience) operating in the specialty crops industry. A secondary goal is to characterize the beginning farmers' population in the specialty crops industry and compare them to more experienced farmers (more than 10 years of farming experience).Design/methodology/approachUsing a series of regressions, this paper tests the hypothesis that beginning farmers are more likely to adopt agricultural technologies such as growing technologies (i.e. hydroponics and hoop houses) and value-added (VA) technologies (drying and cutting produce into customer-ready portions) relative to counterparts. Using a unique primary collected dataset of specialty crops farmers, the dependent variable for each model is the binary decision to adopt each agricultural technology, while the main variables of interest are the dummy variables beginning farmers and the interaction terms created between beginning farmers and land farmed, percent of land rented, crop diversification, local sales, and part-time farming.FindingsFarmers' characterization suggests that, on average, beginning farmers are more likely to adopt growing technologies than more experienced farmers. However, after controlling for other determinants of adoption, there is no significantly difference between the two groups. Lastly, results suggest that beginning farmers are more likely to adopt VA technologies relative to experienced farmers.Originality/valueWhile the adoption of agricultural innovations can lead to increases in economic and environmental resilience, little is known about beginning farmers adopting agricultural technologies, and studies are even less common for specialty crops operations. As the world population continues to grow rapidly, the demand for agricultural food products is expected to increase up to 100% between 2010 and 2050. This growth places additional stress on the limited access to land and water for agricultural production. Farm profitability can be boosted by increasing economies of scope through the use of growing technologies that increase yield or by adding value to specialty crops. The increasing global demand for food makes it imperative to understand what influences the adoption of agricultural technologies among beginning farmers growing food crops.","PeriodicalId":46748,"journal":{"name":"Agricultural Finance Review","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2022-02-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42161200","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-02-04DOI: 10.1108/afr-08-2021-0116
Abraham Falola, Ridwan Mukaila, Kafilat Ololade Abdulhamid
PurposeThe problem of inaccessibility of finance for farm investment is a common phenomenon among farmers, especially the rural dwellers. Thus, there is a need to know how the accessibility of informal finance can be increased to increase farm investment. Therefore, this study evaluates farmers’ access to informal finance and its contribution to farm investment among rural farmers in Northcentral Nigeria.Design/methodology/approachA three-stage random sampling technique was employed to select 160 farmers. Primary data collected were analysed with descriptive statistics and the Heckman selection model.FindingsThe study revealed that cooperative society is the major informal means of loan acquisition used by the farmers followed by Rotational Savings and Credit Associations (RoSCAs). Informal loans contributed to agricultural investment through the various operational activities involved in production. Factors influencing farmers’ access to informal loans were the age, farm size and income of the farmers. Interest charged, farmers' age, farming experience, household size, education and loan duration were the drivers of the amount borrowed from the informal financing sector.Practical implicationsThe findings of the study call for policies that will sustain informal financial institutions in developing economies, like Nigeria. Thus, the government through its regulatory agencies should assist informal finance providers with the necessary resources to achieve more goals. This is because the informal credit lenders help in bridging financial gaps created by formal financial institutions, such as commercial banks.Originality/valueUnlike the previous research studies, this study investigated the driving factors of the amount borrowed from informal finance and its use in farm investment.
{"title":"Informal finance: its drivers and contributions to farm investment among rural farmers in Northcentral Nigeria","authors":"Abraham Falola, Ridwan Mukaila, Kafilat Ololade Abdulhamid","doi":"10.1108/afr-08-2021-0116","DOIUrl":"https://doi.org/10.1108/afr-08-2021-0116","url":null,"abstract":"PurposeThe problem of inaccessibility of finance for farm investment is a common phenomenon among farmers, especially the rural dwellers. Thus, there is a need to know how the accessibility of informal finance can be increased to increase farm investment. Therefore, this study evaluates farmers’ access to informal finance and its contribution to farm investment among rural farmers in Northcentral Nigeria.Design/methodology/approachA three-stage random sampling technique was employed to select 160 farmers. Primary data collected were analysed with descriptive statistics and the Heckman selection model.FindingsThe study revealed that cooperative society is the major informal means of loan acquisition used by the farmers followed by Rotational Savings and Credit Associations (RoSCAs). Informal loans contributed to agricultural investment through the various operational activities involved in production. Factors influencing farmers’ access to informal loans were the age, farm size and income of the farmers. Interest charged, farmers' age, farming experience, household size, education and loan duration were the drivers of the amount borrowed from the informal financing sector.Practical implicationsThe findings of the study call for policies that will sustain informal financial institutions in developing economies, like Nigeria. Thus, the government through its regulatory agencies should assist informal finance providers with the necessary resources to achieve more goals. This is because the informal credit lenders help in bridging financial gaps created by formal financial institutions, such as commercial banks.Originality/valueUnlike the previous research studies, this study investigated the driving factors of the amount borrowed from informal finance and its use in farm investment.","PeriodicalId":46748,"journal":{"name":"Agricultural Finance Review","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2022-02-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47743295","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-02-03DOI: 10.1108/afr-04-2021-0046
Renee D. Wiatt, Maria I. Marshall, Ryan Musselman
PurposeThis study investigated the succession process in small and medium family farms as two distinct but related processes of management transfer and ownership transfer. Past studies focused on the broad subject of succession, without dissecting succession into the components that it contains. Furthermore, this study aimed to evaluate which business, family and owner characteristics were significant in the progress of each process toward the actual transfer of management and ownership.Design/methodology/approachTelephone interviews were conducted to gather information from rural family businesses in Illinois, Indiana, Michigan and Ohio. A bivariate ordered probit regression was utilized to model the processes of management and ownership transfer as separate but related processes. Both management transfer and ownership transfer were modeled utilizing three distinct stages of transfer.FindingsBusiness and owner characteristics were significant to both management and ownership transfer, whereas family characteristics only influenced ownership transfer. Farm family businesses that discussed goals, identified a successor and were educated on how to start the transfer process were more likely to have made progress in both management and ownership transfer.Originality/valueThe authors contribute empirically to the literature by modeling the components of the succession process, management transfer and ownership transfer, as separate but interrelated processes. The authors specifically investigate which business, owner and family characteristics influence the progression of management and ownership transfer in farm family businesses.
{"title":"Management and ownership transfer in small and medium family farms","authors":"Renee D. Wiatt, Maria I. Marshall, Ryan Musselman","doi":"10.1108/afr-04-2021-0046","DOIUrl":"https://doi.org/10.1108/afr-04-2021-0046","url":null,"abstract":"PurposeThis study investigated the succession process in small and medium family farms as two distinct but related processes of management transfer and ownership transfer. Past studies focused on the broad subject of succession, without dissecting succession into the components that it contains. Furthermore, this study aimed to evaluate which business, family and owner characteristics were significant in the progress of each process toward the actual transfer of management and ownership.Design/methodology/approachTelephone interviews were conducted to gather information from rural family businesses in Illinois, Indiana, Michigan and Ohio. A bivariate ordered probit regression was utilized to model the processes of management and ownership transfer as separate but related processes. Both management transfer and ownership transfer were modeled utilizing three distinct stages of transfer.FindingsBusiness and owner characteristics were significant to both management and ownership transfer, whereas family characteristics only influenced ownership transfer. Farm family businesses that discussed goals, identified a successor and were educated on how to start the transfer process were more likely to have made progress in both management and ownership transfer.Originality/valueThe authors contribute empirically to the literature by modeling the components of the succession process, management transfer and ownership transfer, as separate but interrelated processes. The authors specifically investigate which business, owner and family characteristics influence the progression of management and ownership transfer in farm family businesses.","PeriodicalId":46748,"journal":{"name":"Agricultural Finance Review","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2022-02-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45476411","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-01-31DOI: 10.1108/afr-09-2021-0121
You-Hsiang Yang, Wenjun Long, C. Turvey
Purpose This paper investigates Chinese agricultural insurance agents willingness to offer (WTO) livestock insurance based on the variations of eight main attributes of livestock insurance.Design/methodology/approach This study implements discrete choice experiments (DCE) with actual insurance agents who design, sell and operate livestock insurance in China. The choice experiment of this study is based on the D-optimal approach, a six-block design, with 15 cards per block and two choices per card. The sample size was 211. Econometrics results are based on conditional and mixed logit models.Findings The authors find that the subsidy effect is enormous; a one level increase of subsidy leads to 3.166 times higher probability to offer. This subsidy effect is important as it confirms the endogenous structure between price and quantity in insurance offering, where subsidy does not only incentivize demand but also the supply. Another main factor of insurance investigated is the impact of different coverage types on agents' WTO. The authors find that agents prefer mortality insurance the most, followed by revenue insurance and profit insurance, while Index-Based Livestock Insurance (IBLI) is the least preferred to offer. Agents' knowledge about these newer types of insurance supports their WTO as well; thus, proper education is necessary to promote the more advanced types of livestock insurance.Research limitations/implications A limitation is that in the presence of COVID 19, and administrative issues at the local level, the sample was not randomly drawn. Nonetheless, the authors believe that there is enough diversity across participants, insurers and provinces and have done sufficient robustness checks to support results and conclusions.Practical implications This study provides further validation for the DCE research method that could potentially be applied to different analyses: using choice experiments to study insurers and reveal their preferences, through combinations of various levels of core attributes for insurance products. The findings and contribution are critical to the reform and improvement of livestock insurance in China and for insurance markets more broadly. The authors find that insurers do not place equal weights or values on insurance product attributes and do not view types of insurance equally. In other words, while farmers may hold different preferences about the type of insurance they demand, the results suggest that insurers also hold preferences in the type of insurance they sell.Originality/value So far as the authors are aware, this is the first DCE designed around the supply of insurance products with the subjects being insurance agents, marketers and executives.
{"title":"The willingness to offer livestock insurance in rural China: a discrete choice experiment among Chinese insurance agents","authors":"You-Hsiang Yang, Wenjun Long, C. Turvey","doi":"10.1108/afr-09-2021-0121","DOIUrl":"https://doi.org/10.1108/afr-09-2021-0121","url":null,"abstract":"Purpose This paper investigates Chinese agricultural insurance agents willingness to offer (WTO) livestock insurance based on the variations of eight main attributes of livestock insurance.Design/methodology/approach This study implements discrete choice experiments (DCE) with actual insurance agents who design, sell and operate livestock insurance in China. The choice experiment of this study is based on the D-optimal approach, a six-block design, with 15 cards per block and two choices per card. The sample size was 211. Econometrics results are based on conditional and mixed logit models.Findings The authors find that the subsidy effect is enormous; a one level increase of subsidy leads to 3.166 times higher probability to offer. This subsidy effect is important as it confirms the endogenous structure between price and quantity in insurance offering, where subsidy does not only incentivize demand but also the supply. Another main factor of insurance investigated is the impact of different coverage types on agents' WTO. The authors find that agents prefer mortality insurance the most, followed by revenue insurance and profit insurance, while Index-Based Livestock Insurance (IBLI) is the least preferred to offer. Agents' knowledge about these newer types of insurance supports their WTO as well; thus, proper education is necessary to promote the more advanced types of livestock insurance.Research limitations/implications A limitation is that in the presence of COVID 19, and administrative issues at the local level, the sample was not randomly drawn. Nonetheless, the authors believe that there is enough diversity across participants, insurers and provinces and have done sufficient robustness checks to support results and conclusions.Practical implications This study provides further validation for the DCE research method that could potentially be applied to different analyses: using choice experiments to study insurers and reveal their preferences, through combinations of various levels of core attributes for insurance products. The findings and contribution are critical to the reform and improvement of livestock insurance in China and for insurance markets more broadly. The authors find that insurers do not place equal weights or values on insurance product attributes and do not view types of insurance equally. In other words, while farmers may hold different preferences about the type of insurance they demand, the results suggest that insurers also hold preferences in the type of insurance they sell.Originality/value So far as the authors are aware, this is the first DCE designed around the supply of insurance products with the subjects being insurance agents, marketers and executives.","PeriodicalId":46748,"journal":{"name":"Agricultural Finance Review","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2022-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48063125","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-01-25DOI: 10.1108/afr-04-2021-0050
Nigel Key
Purpose
Credit may help farmers survive and grow by helping farm households cope with farm or off-farm income variation and by allowing farmers to adopt more efficient production technologies and take advantage of scale economies. This study estimates how credit constraints affect the survival and growth of beginning farms and explores how this effect varies depending on the age of the farm operator.
Design/methodology/approach
Farms businesses are classified as credit constrained using a measure of repayment capacity: the interest expense ratio (interest expenses relative to gross income). Linked data from consecutive Agricultural Censuses are used to track individual farms over time.
Findings
Results show that beginning farms with a high interest expense ratio take on less new debt over the subsequent five years. These credit-constrained farms were found to have lower five-year survival and growth rates than similar unconstrained farms. The negative effect of being constrained on growth is greater for farms with operators younger than 40 years old.
Practical implications
The finding that credit constraints impede the growth and survival of beginning farms supports a rationale for targeted loan programs designed to help beginning farmers. Results suggest that some of the benefits from these programs will be greater for farms with younger operators.
Originality/value
This study is the first to estimate the effect of credit constraints on the survival and growth of farm businesses. The expansive farm-level panel dataset, which includes almost all beginning farmers in the US, allows for precise coefficient estimates while controlling for numerous farm and operator characteristics.
{"title":"Credit constraints and the survival and growth of beginning farms","authors":"Nigel Key","doi":"10.1108/afr-04-2021-0050","DOIUrl":"https://doi.org/10.1108/afr-04-2021-0050","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>Credit may help farmers survive and grow by helping farm households cope with farm or off-farm income variation and by allowing farmers to adopt more efficient production technologies and take advantage of scale economies. This study estimates how credit constraints affect the survival and growth of beginning farms and explores how this effect varies depending on the age of the farm operator.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>Farms businesses are classified as credit constrained using a measure of repayment capacity: the interest expense ratio (interest expenses relative to gross income). Linked data from consecutive Agricultural Censuses are used to track individual farms over time.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>Results show that beginning farms with a high interest expense ratio take on less new debt over the subsequent five years. These credit-constrained farms were found to have lower five-year survival and growth rates than similar unconstrained farms. The negative effect of being constrained on growth is greater for farms with operators younger than 40 years old.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>The finding that credit constraints impede the growth and survival of beginning farms supports a rationale for targeted loan programs designed to help beginning farmers. Results suggest that some of the benefits from these programs will be greater for farms with younger operators.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>This study is the first to estimate the effect of credit constraints on the survival and growth of farm businesses. The expansive farm-level panel dataset, which includes almost all beginning farmers in the US, allows for precise coefficient estimates while controlling for numerous farm and operator characteristics.</p><!--/ Abstract__block -->","PeriodicalId":46748,"journal":{"name":"Agricultural Finance Review","volume":"166 ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2022-01-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138518969","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-01-20DOI: 10.1108/afr-06-2021-0085
C. Dodson, B. Ahrendsen, G. Short
PurposeA potential farm policy concern is that if nontraditional (vendor/point-of-sale) financing represents increased risk, it may have an aggregate effect on sector-wide farm financial risk. This analysis examines the use of nontraditional lender credit among borrowers in the US Department of Agriculture (USDA)'s Farm Service Agency (FSA)'s direct farm loan programs.Design/methodology/approachData source included the USDA FSA direct operating loan program for 2011–2020. A Cox proportional hazards model was used to estimate the occurrence of default over seven-year term direct operating loans.FindingsResults indicated that point-of-sale financing has a significant and positive relationship with risk for FSA direct operating loan borrowers. The presence of intermediate point-of-sale financing (mostly from machinery and equipment vendors) is associated with an increased probability of default of 9%, and the presence of such loan balances in the amount of $50,000 or more had a higher probability of default of 21%. Short-term nontraditional financing (for example from fertilizer vendors) was found to be positively related to borrower risk of default as indicated by a 22–25% increase in the likelihood of loan default.Originality/valueThrough FSA Farm Business Plan data, the authors were able to distinguish specific vendors and their loan purpose, which advances the knowledge beyond what is currently available through survey data. Findings indicate a minor increase in borrower risk for those with intermediate-term nontraditional financing. However, borrowers with short-term nontraditional financing and having large balances or greater number of nontraditional loans had increases in risk of default by substantive amounts.
{"title":"Does use of nontraditional credit increase risk?","authors":"C. Dodson, B. Ahrendsen, G. Short","doi":"10.1108/afr-06-2021-0085","DOIUrl":"https://doi.org/10.1108/afr-06-2021-0085","url":null,"abstract":"PurposeA potential farm policy concern is that if nontraditional (vendor/point-of-sale) financing represents increased risk, it may have an aggregate effect on sector-wide farm financial risk. This analysis examines the use of nontraditional lender credit among borrowers in the US Department of Agriculture (USDA)'s Farm Service Agency (FSA)'s direct farm loan programs.Design/methodology/approachData source included the USDA FSA direct operating loan program for 2011–2020. A Cox proportional hazards model was used to estimate the occurrence of default over seven-year term direct operating loans.FindingsResults indicated that point-of-sale financing has a significant and positive relationship with risk for FSA direct operating loan borrowers. The presence of intermediate point-of-sale financing (mostly from machinery and equipment vendors) is associated with an increased probability of default of 9%, and the presence of such loan balances in the amount of $50,000 or more had a higher probability of default of 21%. Short-term nontraditional financing (for example from fertilizer vendors) was found to be positively related to borrower risk of default as indicated by a 22–25% increase in the likelihood of loan default.Originality/valueThrough FSA Farm Business Plan data, the authors were able to distinguish specific vendors and their loan purpose, which advances the knowledge beyond what is currently available through survey data. Findings indicate a minor increase in borrower risk for those with intermediate-term nontraditional financing. However, borrowers with short-term nontraditional financing and having large balances or greater number of nontraditional loans had increases in risk of default by substantive amounts.","PeriodicalId":46748,"journal":{"name":"Agricultural Finance Review","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2022-01-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46428616","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-01-13DOI: 10.1108/afr-05-2021-0060
B. Ahrendsen, C. Dodson, G. Short, Ronald L. Rainey, Heather A. Snell
PurposeThe purpose of this paper is to examine credit usage by beginning farmers and ranchers (BFR). BFR credit usage is stratified by location (state) and by socially disadvantaged farmer and rancher (SDFR, also known as historically underserved) status. SDFR groups are defined to include women; individuals with Hispanic, Latino or Spanish Origin; individuals who identify as American Indian or Alaskan Native, Black or African American, Asian, Native Hawaiian or other Pacific Islander. Non-SDFR is defined as individuals who identify as non-Hispanic, White men.Design/methodology/approachThe US Department of Agriculture’s Census of Agriculture, Agricultural Resource Management Survey (ARMS) is linked with Farm Service Agency (FSA) loan program administrative data to estimate shares of BFR operations using FSA credit. Census data provided information on population changes in total farms and BFR operations from 2012 to 2017 which are compared by SDFR status.FindingsResults reveal differences among BFR operations active in agricultural credit markets by SDFR status and state. BFR were more common among SDFR groups as well as in regions where farms tend to be smaller, such as the Northeast, compared to a more highly agricultural upper Midwest. Among BFR, non-SDFR are more likely to utilize credit than SDFR, however, FSA appeared to be crucial in enabling BFR and especially beginning SDFR groups to access loans.Originality/valueThe results are timely and of keen interest to researchers, industry and policymakers and are expected to assist in developing and adjusting policies to effectively promote and improve BFR success in general and for beginning SDFR groups.
{"title":"Beginning farmer and rancher credit usage by socially disadvantaged status","authors":"B. Ahrendsen, C. Dodson, G. Short, Ronald L. Rainey, Heather A. Snell","doi":"10.1108/afr-05-2021-0060","DOIUrl":"https://doi.org/10.1108/afr-05-2021-0060","url":null,"abstract":"PurposeThe purpose of this paper is to examine credit usage by beginning farmers and ranchers (BFR). BFR credit usage is stratified by location (state) and by socially disadvantaged farmer and rancher (SDFR, also known as historically underserved) status. SDFR groups are defined to include women; individuals with Hispanic, Latino or Spanish Origin; individuals who identify as American Indian or Alaskan Native, Black or African American, Asian, Native Hawaiian or other Pacific Islander. Non-SDFR is defined as individuals who identify as non-Hispanic, White men.Design/methodology/approachThe US Department of Agriculture’s Census of Agriculture, Agricultural Resource Management Survey (ARMS) is linked with Farm Service Agency (FSA) loan program administrative data to estimate shares of BFR operations using FSA credit. Census data provided information on population changes in total farms and BFR operations from 2012 to 2017 which are compared by SDFR status.FindingsResults reveal differences among BFR operations active in agricultural credit markets by SDFR status and state. BFR were more common among SDFR groups as well as in regions where farms tend to be smaller, such as the Northeast, compared to a more highly agricultural upper Midwest. Among BFR, non-SDFR are more likely to utilize credit than SDFR, however, FSA appeared to be crucial in enabling BFR and especially beginning SDFR groups to access loans.Originality/valueThe results are timely and of keen interest to researchers, industry and policymakers and are expected to assist in developing and adjusting policies to effectively promote and improve BFR success in general and for beginning SDFR groups.","PeriodicalId":46748,"journal":{"name":"Agricultural Finance Review","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2022-01-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42027599","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-01-11DOI: 10.1108/afr-05-2021-0057
Valentina Hartarska, Denis Nadolnyak, N. Sehrawat
PurposeThis paper identifies factors that affect entry and exit of beginning, young and women farmers and ranchers.Design/methodology/approachThe empirical framework is fixed effects regression analysis that uses county level data to evaluate how barriers to entry, access to and use of credit, local economic environment, and climate affect entry and exit of Beginning Farmers and Ranchers (BFRs). The dataset is assembled from several sources matching the Census of Agriculture years for the period of 1997–2017.FindingsResults show that new farmers are more likely to enter in counties with more and smaller farms and with lower farm productivity, indicating that BFRs have the potential to improve the overall productivity in such counties if able to grow and succeed. The results also indicate that the high capital intensity nature of farming is an effective barrier to entry. BFRs are more likely to do better in counties where agriculture is more important to the economy and with more off-farm work opportunities. The net entry is positively associated with higher input/output price index and the use of insurance but is unaffected by government payments and farm and off-farm income. The authors observe substitutability between farming and alternative self-employment for more entrepreneurial young people. Net entry increases with availability of non-real-estate loans but decreases with real estate credit. Thus, for BFRs to acquire the assets needed to reach optimal scale, access to credit remains essential.Originality/valueThe authors are not aware of other work that estimates how barriers to entry and other economic factors including access to credit affect entry and exit of BFRs of various ages and young and women farmers using the Census of Agriculture data up to 2017.
{"title":"Beginning farmers' entry and exit: evidence from county level data","authors":"Valentina Hartarska, Denis Nadolnyak, N. Sehrawat","doi":"10.1108/afr-05-2021-0057","DOIUrl":"https://doi.org/10.1108/afr-05-2021-0057","url":null,"abstract":"PurposeThis paper identifies factors that affect entry and exit of beginning, young and women farmers and ranchers.Design/methodology/approachThe empirical framework is fixed effects regression analysis that uses county level data to evaluate how barriers to entry, access to and use of credit, local economic environment, and climate affect entry and exit of Beginning Farmers and Ranchers (BFRs). The dataset is assembled from several sources matching the Census of Agriculture years for the period of 1997–2017.FindingsResults show that new farmers are more likely to enter in counties with more and smaller farms and with lower farm productivity, indicating that BFRs have the potential to improve the overall productivity in such counties if able to grow and succeed. The results also indicate that the high capital intensity nature of farming is an effective barrier to entry. BFRs are more likely to do better in counties where agriculture is more important to the economy and with more off-farm work opportunities. The net entry is positively associated with higher input/output price index and the use of insurance but is unaffected by government payments and farm and off-farm income. The authors observe substitutability between farming and alternative self-employment for more entrepreneurial young people. Net entry increases with availability of non-real-estate loans but decreases with real estate credit. Thus, for BFRs to acquire the assets needed to reach optimal scale, access to credit remains essential.Originality/valueThe authors are not aware of other work that estimates how barriers to entry and other economic factors including access to credit affect entry and exit of BFRs of various ages and young and women farmers using the Census of Agriculture data up to 2017.","PeriodicalId":46748,"journal":{"name":"Agricultural Finance Review","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2022-01-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48688432","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-12-30DOI: 10.1108/afr-02-2021-0022
Mehmet Bulut, Harun Çelik
PurposeThe purpose of this paper is to examine the factors that influence farmers' preference for the use of Islamic banks in Turkey and to investigate their knowledge level and perception about Islamic finance.Design/methodology/approachSurvey data used in this study is obtained by drawing a sample of 1902 farmers who are members of the Agricultural Credit Cooperatives Union (ACCU) from 37 provinces of Turkey. Pearson's Chi-square test is used to analyze the association between the demographic features of farmers, conventional bank usage and Islamic bank usage. Binary logistic regression model is used to estimate the factors influencing the preference for Islamic banks. Explanatory variables include knowledge on Islamic banking and finance, perception of compliance to religion, saving ability and cost concern along with the control variables of Islamic bank branch number in the region and age of respondent. Robustness check is conducted via alternative models using ordinary least squares (OLS) and logistic regression.FindingsLess than 10% of the participant farmers use Islamic banks and 59% declare they know nothing about Islamic banking. Age, education level, income level, nonagricultural income level, saving ability, duration of working in agriculture, land size and region are significantly related to farmers' preference of using Islamic banks. Knowledge level, perception of religious compliance, saving ability and cost concern are statistically significant factors that influence the probability of using Islamic banks.Research limitations/implicationsThis study does not include the analysis of the relationship between being religious and using Islamic banks because questions related to the assessment of religious practice were excluded due to the ACCU's sensitivity to investigate personal beliefs. Therefore, future studies can expand the scope of this research by investigating religiousness. The sample is chosen from the ACCU members who are already benefiting from a formal source of credit; therefore, the results should not be attributed to all farmers.Practical implicationsIslamic banks and microfinance institutions' further engagement in the agricultural sector and ACCU's implementation of Islamic finance instruments.Social implicationsIslamic banks' further diversification in the agricultural sector and ACCU's implementation of Islamic finance instruments.Originality/valueTo the best of the authors' knowledge, this paper is the first to investigate the farmers' perception and preference of Islamic banking in Turkey. The sample size of 1902 is much larger and geographically diversified compared to studies in agricultural finance. This study will be valuable for the agricultural finance empirical studies in Turkey as well as an important addition to the emerging literature on Islamic finance.
{"title":"Farmers' perception and preference of Islamic Banking in Turkey","authors":"Mehmet Bulut, Harun Çelik","doi":"10.1108/afr-02-2021-0022","DOIUrl":"https://doi.org/10.1108/afr-02-2021-0022","url":null,"abstract":"PurposeThe purpose of this paper is to examine the factors that influence farmers' preference for the use of Islamic banks in Turkey and to investigate their knowledge level and perception about Islamic finance.Design/methodology/approachSurvey data used in this study is obtained by drawing a sample of 1902 farmers who are members of the Agricultural Credit Cooperatives Union (ACCU) from 37 provinces of Turkey. Pearson's Chi-square test is used to analyze the association between the demographic features of farmers, conventional bank usage and Islamic bank usage. Binary logistic regression model is used to estimate the factors influencing the preference for Islamic banks. Explanatory variables include knowledge on Islamic banking and finance, perception of compliance to religion, saving ability and cost concern along with the control variables of Islamic bank branch number in the region and age of respondent. Robustness check is conducted via alternative models using ordinary least squares (OLS) and logistic regression.FindingsLess than 10% of the participant farmers use Islamic banks and 59% declare they know nothing about Islamic banking. Age, education level, income level, nonagricultural income level, saving ability, duration of working in agriculture, land size and region are significantly related to farmers' preference of using Islamic banks. Knowledge level, perception of religious compliance, saving ability and cost concern are statistically significant factors that influence the probability of using Islamic banks.Research limitations/implicationsThis study does not include the analysis of the relationship between being religious and using Islamic banks because questions related to the assessment of religious practice were excluded due to the ACCU's sensitivity to investigate personal beliefs. Therefore, future studies can expand the scope of this research by investigating religiousness. The sample is chosen from the ACCU members who are already benefiting from a formal source of credit; therefore, the results should not be attributed to all farmers.Practical implicationsIslamic banks and microfinance institutions' further engagement in the agricultural sector and ACCU's implementation of Islamic finance instruments.Social implicationsIslamic banks' further diversification in the agricultural sector and ACCU's implementation of Islamic finance instruments.Originality/valueTo the best of the authors' knowledge, this paper is the first to investigate the farmers' perception and preference of Islamic banking in Turkey. The sample size of 1902 is much larger and geographically diversified compared to studies in agricultural finance. This study will be valuable for the agricultural finance empirical studies in Turkey as well as an important addition to the emerging literature on Islamic finance.","PeriodicalId":46748,"journal":{"name":"Agricultural Finance Review","volume":" ","pages":""},"PeriodicalIF":1.6,"publicationDate":"2021-12-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47360806","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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