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Looking Beyond Farm Loan Approval Decisions: Loan Pricing And Nonpricing Terms For Socially Disadvantaged Farm Borrowers

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  • ESCALANTE, CESAR L.
  • OSINUBI, ADENOLA
  • DODSON, CHARLES
  • TAYLOR, CARMINA E.

Abstract

This study utilizes Farm Service Agency lending data to verify if previous racial and gender bias allegations still persist in more recent lending decisions. Beyond loan approval decisions, this study focuses on trends in direct loan packaging terms for approved single proprietorship farm borrowers. Results indicate that although no significant disparities were noted in loan amounts and maturities prescribed for various racial and gender minority groups, nonwhite male and female borrowers were usually charged higher interest rates than the others. Loan pricing differentials could have been the lenders' strategy for price management of borrowers' credit risks.

Suggested Citation

  • Escalante, Cesar L. & Osinubi, Adenola & Dodson, Charles & Taylor, Carmina E., 2018. "Looking Beyond Farm Loan Approval Decisions: Loan Pricing And Nonpricing Terms For Socially Disadvantaged Farm Borrowers," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 50(1), pages 129-148, February.
    • Handle: RePEc:cup:jagaec:v:50:y:2018:i:01:p:129-148_00
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    Cited by:

    1. Sant'Anna, Ana Claudia, 2023. "Examining the Relationship Between Women, Minority Farmers, and Diversity in the Leadership of Farm Credit Institutions," 97th Annual Conference, March 27-29, 2023, Warwick University, Coventry, UK 334564, Agricultural Economics Society - AES.
    2. Ashok K. Mishra & Gianna Short & Charles B. Dodson, 2024. "Racial disparities in farm loan application processing: Are Black farmers disadvantaged?," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 46(1), pages 111-136, March.
    3. Ana Claudia Sant'Anna & Kevin N. Kim & Iryna Demko, 2024. "Limits to capital: Assessing the role of race on the Paycheck Protection Program for African American farmers in America," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 46(1), pages 217-233, March.
    4. Anil K. Giri & Dipak Subedi & Kathleen Kassel, 2024. "Analysis of the payments from the coronavirus food assistance program and the market facilitation program to minority producers," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 46(1), pages 189-201, March.
    5. Tia M. McDonald & Ron Durst, 2024. "An analysis of tax benefits by race and ethnicity for farm households," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 46(2), pages 677-697, June.

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