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

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  • Williamson, James M.
  • Katchova, Ani L.

Abstract

The ‘‘Aggie Bond’’ program was established in the 1980s to provide beginning and lowequity farmers access to capital. The bonds, which pay tax-exempt interest, may be used by qualifying famers for purchases of farm real estate and equipment. Using Aggie Bond data collected from states and Census of Agriculture data spanning 25 years, we examine whether the program has had an impact on farm entrance, land ownership, and the size of operation. We do not find strong evidence that the program led to an increase in the proportion of beginning farmers; however, we find limited evidence the program helped beginning farmers become full land owners as well as increased the rate of growth in the proportion of beginning farmers who are full land owners.

Suggested Citation

  • Williamson, James M. & Katchova, Ani L., 2013. "Tax-Exempt Bond Financing for Beginning and Low-Equity Farmers: The Case of 'Aggie Bonds'," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 45, pages 1-12, August.
    • Handle: RePEc:ags:joaaec:155423
    DOI: 10.22004/ag.econ.155423
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    1. Adhikari, Arun & Mishra, Ashok K. & Chintawar, Sachin, 2009. "Adoption of Technology and Its Impact on Profitability of Young and Beginning Farmers: A Quantile Regression Approach," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46830, Southern Agricultural Economics Association.
    2. Jaclyn D. Kropp & Ani L. Katchova, 2011. "The effects of direct payments on liquidity and repayment capacity of beginning farmers," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 71(3), pages 347-365, November.
    3. Katchova, Ani L., 2010. "An Analysis of the Financial Performance of Beginning Farmers," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61513, Agricultural and Applied Economics Association.
    4. Hoppe, Robert A. & MacDonald, James M. & Korb, Penelope J., 2010. "Small Farms in the United States: Persistence Under Pressure," Economic Information Bulletin 58300, United States Department of Agriculture, Economic Research Service.
    5. Meyer, Lee & Hunter, Jennifer & Katchova, Ani L. & Lovett, Sarah & Thilmany, Dawn D. & Sullins, Martha & Card, Adrian, 2011. "Approaching Beginning Farmers As A New Stakeholder For Extension," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 26(2), pages 1-7.
    6. Barrett E. Kirwan, 2009. "The Incidence of U.S. Agricultural Subsidies on Farmland Rental Rates," Journal of Political Economy, University of Chicago Press, vol. 117(1), pages 138-164, February.
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    Cited by:

    1. Lange, Kelly Y., 2013. "Discussion: Challenges of Entering and Succeeding in Southeastern Agriculture: Access to Credit, Supply Chains, and Consumers," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 45, pages 1-4, August.
    2. Valliant, Julia C.D. & Ruhf, Kathryn Z. & Gibson, Kevin D. & Brooks, J.R. & Farmer, James R., 2019. "Fostering farm transfers from farm owners to unrelated, new farmers: A qualitative assessment of farm link services," Land Use Policy, Elsevier, vol. 86(C), pages 438-447.
    3. Jeremy G. Weber & Nigel Key, 2014. "Do Wealth Gains from Land Appreciation Cause Farmers to Expand Acreage or Buy Land?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(5), pages 1334-1348.
    4. Denis Nadolnyak & Valentina Hartarska & Bretford Griffin, 2019. "The Impacts of Economic, Demographic, and Weather Factors on the Exit of Beginning Farmers in the United States," Sustainability, MDPI, vol. 11(16), pages 1-17, August.
    5. Katchova, Ani & Ahearn, Mary, 2015. "Farmland Assets and Growth Trends for Young and Beginning Farmers in the U.S," 2015 Conference, August 9-14, 2015, Milan, Italy 211839, International Association of Agricultural Economists.
    6. Katchova, Ani L. & Ahearn, Mary Clare, 2014. "Farmland Ownership and Leasing: Implications for Young and Beginning Farmers," Staff Papers 184725, University of Kentucky, Department of Agricultural Economics.
    7. Ani L. Katchova & Mary Clare Ahearn, 2016. "Dynamics of Farmland Ownership and Leasing: Implications for Young and Beginning Farmers," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 38(2), pages 334-350.

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