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Objective Evaluation for Agricultural Lending

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  • Hardy, William E.
  • Weed, Johno B.

Abstract

One of the more significant changes in the U. S. agricultural industry in recent years has been the increased use of credit to finance production and capital expenditures. Since 1970, outstanding farm debt has more than doubled, rising at an average annual rate of 9.3 percent. However, because net farm income has not increased as fast, the debt burden for farm operators has become relatively higher (Melichar and Waldheger).This increase in debt load has made financial evaluation more difficult for lenders. Narrow profit margins and increased average loan size have made financial institutions more aware of the need to determine, for their loan portfolio, how borrower and agricultural business characteristics relate to debt repayment ability and loan quality.

Suggested Citation

  • Hardy, William E. & Weed, Johno B., 1980. "Objective Evaluation for Agricultural Lending," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 12(1), pages 159-164, July.
    • Handle: RePEc:cup:jagaec:v:12:y:1980:i:01:p:159-164_01
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    Citations

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    Cited by:

    1. Novak, Michael P. & LaDue, Eddy L., 1999. "Application Of Recursive Partitioning To Agricultural Credit Scoring," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 31(1), pages 1-14, April.
    2. Novak, Michael P. & LaDue, Eddy L., 1997. "Introducing Recursive Partitioning To Agricultural Credit Scoring," Working Papers 127878, Cornell University, Department of Applied Economics and Management.
    3. Mattia Iotti & Giuseppe Bonazzi, 2018. "Analysis of the Risk of Bankruptcy of Tomato Processing Companies Operating in the Inter-Regional Interprofessional Organization “OI Pomodoro da Industria Nord Italia”," Sustainability, MDPI, vol. 10(4), pages 1-23, March.
    4. Sanjay J. Bhayani & Butalal Ajmera, 2011. "A Study on Performance Evaluation of Dinesh Mills Ltd," Indian Journal of Commerce and Management Studies, Educational Research Multimedia & Publications,India, vol. 2(6), pages 114-123, September.
    5. de Jager, Fritz & Swanepoel, Vernon, 1994. "Factors Associated With Farm Financial Failure In The Northern Springbok Flats," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 33(4), December.
    6. Gustafson, Cole R. & Crane, Laurence M. & Fischer, William R., 1995. "Agronomic, Economic, and Demographic Characteristics of Crop Farms in the Great Plains and Corn Belt," Agricultural Economics Reports 23221, North Dakota State University, Department of Agribusiness and Applied Economics.
    7. Babetskaya, Lyubov, 2001. "Enhancing The Performance Of Risk-Rating Models At Community Banks," 2001 Annual meeting, August 5-8, Chicago, IL 20690, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    8. Paul N. Ellinger & Nate S. Splett & Peter J. Barry, 1992. "Consistency of credit evaluations at agricultural banks," Agribusiness, John Wiley & Sons, Ltd., vol. 8(6), pages 517-536.
    9. Otima, Ruth M. A., 1994. "Predicting loan repayment performance: a case of Kenyan farm borrowers," ISU General Staff Papers 1994010108000018175, Iowa State University, Department of Economics.
    10. Mário Santiago Céu & Raquel Medeiros Gaspar, 2022. "Vegetative cycle and bankruptcy predictors of agricultural firms," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 68(12), pages 445-454.
    11. Buffier, B.D. & Metternick-Jones, M.A., 1995. "Income Equalisation Deposits: Enhancing Farm Viability," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 63(01), pages 1-9, April.
    12. Hardy, William E., Jr. & Spurlock, Stanley R. & Parrish, Donnie R. & Benoist, Lee A., 1987. "An Analysis Of Factors That Affect The Quality Of Federal Land Bank Loans," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 19(2), pages 1-8, December.
    13. Pederson, Glenn D. & Rao, Ananth & Boehlje, Michael, 1990. "Analysis Of Loan Settlements And Restructured Loan Performance," Staff Papers 13257, University of Minnesota, Department of Applied Economics.
    14. William E. Hardy & John L. Adrian, 1985. "A linear programming alternative to discriminant analysis in credit scoring," Agribusiness, John Wiley & Sons, Ltd., vol. 1(4), pages 285-292.
    15. Barry, Peter J. & Ellinger, Paul N., 1989. "Credit Scoring, Loan Pricing, And Farm Business Performance," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 14(1), pages 1-11, July.

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