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Abstract
Most agricultural lenders extend loans based on their assessment of a borrower’s ability to repay debt. Because of this, some farmers may not be able to secure as much credit as they would like for their farm businesses. A lack of credit could prevent these farmers from expanding production or could restrict investments in productivity-enhancing technologies. Off-farm income may help some farm households qualify for larger loans, which could lead to higher farm output, productivity, and profit. Using farm-level data from USDA’s Agricultural Resource Management Survey, the USDA, Economic Research Service (ERS) estimated the effect of off-farm income on farm borrowing, investment, operation size and productivity from 2007 to 2016.