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External equity financing in agriculture via profit and loss sharing contracts: A proposed financial innovation

Author

Listed:
  • Laurence M. Crane

    (Department of Agricultural Economics, North Dakota State University)

  • David J. Leatham

    (Department of Agricultural Economics, Texas A&M University)

Abstract

An institutional arrangement and contracting procedure by which external suppliers could potentially satisfy the demand for farm equity in a profit and loss sharing arrangement is outlined. An accounting schedule for calculating the equity division of owner and external equity is developed and presented. © 1995 by John Wiley & Sons, Inc.

Suggested Citation

  • Laurence M. Crane & David J. Leatham, 1995. "External equity financing in agriculture via profit and loss sharing contracts: A proposed financial innovation," Agribusiness, John Wiley & Sons, Ltd., vol. 11(3), pages 223-233.
    • Handle: RePEc:wly:agribz:v:11:y:1995:i:3:p:223-233
    DOI: 10.1002/1520-6297(199505/06)11:3<223::AID-AGR2720110304>3.0.CO;2-X
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    References listed on IDEAS

    as
    1. Matthews, Stephen F. & Harrington, David H., 1986. "Analysis Of Nonfarm Equity Forms Of Investment Applicable To Agriculture," 1986 Annual Meeting, July 27-30, Reno, Nevada 278456, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Featherstone, Allen M. & Baker, Timothy G., 1986. "Farm Portfolio Adjustments To The Elimination Of U.S. Target And Support Price Provisions," 1986 Regional Committee NC-161, October 7-8, 1986, St. Paul, Minnesota 127210, Regional Research Committee NC-1014: Agricultural and Rural Finance Markets in Transition.
    3. John R. Fiske & Marvin T. Batte & Warren F. Lee, 1986. "Nonfarm Equity in Agriculture: Past, Present, and Future," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(5), pages 1319-1323.
    4. Robert A. Collins, 1985. "Expected Utility, Debt-Equity Structure, and Risk Balancing," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(3), pages 627-629.
    5. Laurence M. Crane & David J. Leatham, 1993. "Profit and loss sharing in agriculture: An application of Islamic banking," Agribusiness, John Wiley & Sons, Ltd., vol. 9(4), pages 403-412.
    6. Stephen F. Matthews & David H. Harrington, 1986. "Analysis of Nonfarm Equity Forms of Investment Applicable to Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(5), pages 1324-1329.
    7. Robert A. Collins & H. Joseph Bourn, 1986. "Market Requirements and Pricing for External Equity Shares in Farm Businesses," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(5), pages 1330-1336.
    8. Philip M. Raup, 1986. "Use of Equity Capital in Financing Future Agricultural Production: Discussion," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(5), pages 1337-1339.
    9. Stephen C. Gabriel & C. B. Baker, 1980. "Concepts of Business and Financial Risk," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 62(3), pages 560-564.
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    Citations

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    Cited by:

    1. Beal, Diana J., 1996. "Emerging Issues in Risk Management in Farm Firms," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 64(03), pages 1-12, December.
    2. Josep M. Argilés, 1998. "Accounting information and the prediction of farm viability," Economics Working Papers 277, Department of Economics and Business, Universitat Pompeu Fabra.
    3. Eric J. Slof & Josep M. Argilés, 1998. "An analysis of the accounting principles applied by the European Farm Accountancy Data Network," Economics Working Papers 342, Department of Economics and Business, Universitat Pompeu Fabra, revised Oct 1998.
    4. Seo, Sangtaek & Mitchell, Paul D. & Leatham, David J., 2008. "Risk Sharing and Incentives with External Equity Financing and Crop Insurance," Staff Papers 92204, University of Wisconsin-Madison, Department of Agricultural and Applied Economics.
    5. Josep Maria Argiles & Eric John Slof, 2001. "New opportunities for farm accounting," European Accounting Review, Taylor & Francis Journals, vol. 10(2), pages 361-383.
    6. Josep M. Argilés & Eric J. Slof, 2000. "New opportunities for farm accounting," Economics Working Papers 497, Department of Economics and Business, Universitat Pompeu Fabra.

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