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Abstract
We use survey data to study the degree to which new farming operations in Alabama
were financially constrained after the 2008 financial crisis. Next, we control for farmers’
self-selection out of the credit market and identify which farmers were able to secure
loans during the period of 2009–2010. The results show that new farmers that started
any part of their operation after 2005 were financially constrained but no evidence that
their financing constraints were affected by the crisis. As expected, we find that lending
was collateral-driven, although lenders also considered farmers’ profitability and cash
flows.