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Environmental Considerations for Agricultural Intermediation: Potential Impacts of Cercla and Sara

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  • Moss, Charles B.
  • Olexa, Michael T.

Abstract

During the 1970s and 1980s the environmental agenda moved to prominent position among legal considerations in agriculture. One element of this agenda involves farmer and lender liability for cleanup cost under CERCLA as amended by SARA. This study examines the potential liability for lenders under this legislation. Next, the study investigates some potential actions and consequences for intermediaries from a theoretical finance perspective. Specifically, the paper addresses changes in credit risk resulting from the emerging agenda. In addition, the adverse selection problem in credit is examined for potential insights into the credit decision. Finally, the study concludes with practical advise for financial intermediaries in agriculture.

Suggested Citation

  • Moss, Charles B. & Olexa, Michael T., 1992. "Environmental Considerations for Agricultural Intermediation: Potential Impacts of Cercla and Sara," Staff Paper Series 239297, University of Florida, Food and Resource Economics Department.
    • Handle: RePEc:ags:uflsps:239297
    DOI: 10.22004/ag.econ.239297
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    References listed on IDEAS

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    1. Charles B. Moss & Richard N. Weldon & Ronald P. Muraro, 1991. "The impact of risk on the discount rate for different citrus varieties," Agribusiness, John Wiley & Sons, Ltd., vol. 7(4), pages 327-338.
    2. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    3. Collins, Robert A. & Barry, Peter J., 1988. "Beta-adjusted hurdle rates for proprietary firms," Journal of Economics and Business, Elsevier, vol. 40(2), pages 139-145, May.
    4. George Akerlof, 1976. "The Economics of Caste and of the Rat Race and Other Woeful Tales," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(4), pages 599-617.
    5. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
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