Factors Affecting Farm Loan Delinquency in the Southeast

This study examines the factors and behaviors that affect Southeast US farmers’ ability to meet their loan repayment obligations within the stipulated loan term. The study uses a 10-year (2003-2012) pooled cross-sectional data from the USDA ARMS survey data (Phase III). A probit approach is used to regress delinquency against various borrower-specific, loan-specific, lender-specific, macroeconomic and climatic variables for the first part. The results show that farmers with larger farms, farmers with insurance, farmers with higher net income, farmers with smaller debt to asset ratio, farmers with single loans and those that take majority of their loans from sources apart from commercial banks are those that are less likely to be delinquent. Temperature and precipitation also affect outcomes, but by minute magnitudes.


Issue Date:
Dec 12 2017
Publication Type:
Journal Article
Language:
English
Total Pages:
17
JEL Codes:
Q12; Q14; Q55
Note:
IN: Research in Applied Economics, 9(4), 75-92. doi:10.5296/rae.v9i4.12165.

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 Record created 2018-01-10, last modified 2018-01-22

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