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Factors Affecting Commercial Bank Lending to Agriculture

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  • Betubiza, Eustacius N.
  • Leatham, David J.

Abstract

A tobit econometric procedure was used to examine the effect of selected demand and supply factors on nonreal estate agricultural lending by commercial banks in Texas. Results show that banks have reduced their agricultural loan portfolios in response to increased use of interest sensitive deposits after deregulation. Moreover, almost half of this decrease came from banks that stopped making agricultural loans. Also, results show that banks affiliated with multi-bank holding companies lend less money to agriculture relative to their assets than do independent banks.

Suggested Citation

  • Betubiza, Eustacius N. & Leatham, David J., 1995. "Factors Affecting Commercial Bank Lending to Agriculture," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 27(1), pages 112-126, July.
    • Handle: RePEc:cup:jagaec:v:27:y:1995:i:01:p:112-126_01
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    References listed on IDEAS

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    1. Bundt, Thomas P & Schweitzer, Robert, 1989. "Deregulation, Deposit Markets, and Banks' Costs of Funds," The Financial Review, Eastern Finance Association, vol. 24(3), pages 417-430, August.
    2. R. Alton Gilbert, 1986. "Requiem for Regulation Q: what it did and why it passed away," Review, Federal Reserve Bank of St. Louis, issue Feb, pages 22-37.
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