Skip to main content Accessibility help

Some Evidence on the Relationship Between Loan Insurance and the Supply of Agricultural Credit From Commercial Banks

  • L. Upton Hatch (a1) and Wesley N. Musser (a2)


Insured farm loans have evolved to be an important component of the federal role in the agricultural credit subsector. Currently, agricultural credit is supplied by three sets of institutions: (1) private firms and individuals, (2) the quasiprivate cooperative Farm Credit System, and (3) the federal public programs of the Farmers Home Administration (FmHA) and Small Business Administration. Statuatory authority currently limits federal programs to a residual role of lending to borrowers who cannot receive credit from the other segments. Though a large component of public programs consists of emergency loans in areas of economic disaster, the FmHA also makes farm operating and real estate loans to farmers who meet the statuatory requirements. The source of funds for some FmHA loans is federal appropriations and money market certificates. However, guaranteed loans have become an important component of FmHA programs. These loans are made in cooperation with other agricultural finance agencies. The public agency insures or guarantees repayment of the loan. The cooperating firm negotiates the loan and provides the funds. Usually the interest payment is below the current market interest rate structure.



Hide All
Akerloff, George A.The Market for ‘Lemons&: Quantity Uncertainty and the Market Mechanism.Quar. J. Econ. 84(1970):488500.
Barry, Peter J.Rural Banks and Farm Loan Participation.A mer. J. Agr. Econ. 60(1978):214–24.
Barry, Peter J.Hopkins, John A., and Baker, C. B.. Financial Management in Agriculture, 2nd edition. Danville, Illinois: The Interstate Printers and Publishers, Inc., 1979.
Boehlje, Michael, Harris, Duane G., and Hoskins, James. “A Modeling Approach to Flows of Funds in Localized Financial Markets.Amer. J. Agr. Econ. 61(1979):145–50.
Carlin, Thomas A. and Wise, James O.. An Economic Analysis of the Georgia Development Authority. Ga. Ag. Exp. Sta. Res. Rep. #3. May 1967.
Krause, Kenneth R. and Kyle, Leonard R.. “Economics Factors Underlying the Incidence of Large Farming Units: The Current Situation and Probable Trends.Amer. J. Agr. Econ. 52(1970):748–60.
Lipton, Michael. “Agricultural Risk, Rural Credit, and the Inefficiency of Inequality,” in Risk, Uncertainty and Agricultural Development, James Roumasset, al., editors. New York: Agricultural Development Council, 1979.
Markowitz, Harry M.Portfolio Selection. “ J. Fin. 12(1952):7791.
Mullineaux, Donald J.Economies of Scale and Organizational Efficiency in Banking.J. Fin. 33(1978):259–80.
Musser, Wesley N. and Marable, Ulysses Jr.The Impact of Energy Prices on Optimum Machinery Size and the Structure of Agriculture.S. J. Agr. Econ. 8(1976):205–11.
Robison, L. J. and Barry, Peter J.. “Portfolio Adjustments—An Application to Rural Banking.Amer. J. Agr. Econ. 59(1977):311–20.
Roe, Terry and Nygaard, David. “Subjective Production Function Parameters and Risk: Wheat Production in Tunisia.” Staff Paper P79-43, Department of Agricultural and Applied Economics, University of Minnesota, Dec. 1979.
Sharpe, William F.Portfolio Theory and Capital Markets. New York: McGraw-Hill Book Company, 1970.
Smith, Adam.An Inquiry into the Nature and Causes of the Wealth of Nations. New York: Random House, Inc., 1937.
U.S. Department of Commerce, Bureau of the Census. “Estimates of the Population of Georgia Counties and Metropolitan Areas: July 1, 1972 and 1973.” Current Population Reports, Series P-26, No. 92. Washington, D.C. Oct. 1974.
U.S. Department of Commerce 1974 Census of Agriculture, Preliminary Report, No. Ag. 74-P-13. Washington, D.C. Aug. 1976.
U.S. Department of CommerceStatistical Abstract of the United States 1975. Washington, D.C. 1975.

Some Evidence on the Relationship Between Loan Insurance and the Supply of Agricultural Credit From Commercial Banks

  • L. Upton Hatch (a1) and Wesley N. Musser (a2)


Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed