A Summary of the Report on the Relative Cost Effectiveness of the Farm Service Agency’s Farm Loan Programs

Results of a study completed for Congress indicate direct program borrowers are more financially stressed than guaranteed borrowers and that many current farm loan program borrowers may not be able to continue farming, at least in the short-term, without access to government subsidized credit. The study findings are generally consistent with the missions of the direct and guaranteed farm loan programs, yet the combination of higher delivery costs and loan subsidy costs means direct lending programs require larger amounts of federal resources to meet their objectives than do similar guaranteed farm loan programs. However, serving many limited resource or otherwise economically disadvantaged farmers through guaranteed loan programs may be difficult without significant program adjustments or additional financial subsidies.

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 Record created 2017-04-01, last modified 2018-01-17

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