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FSA Direct Farm Loan Program Graduation Rates and Reasons for Exiting

Published online by Cambridge University Press:  28 April 2015

Bruce L. Dixon ,
Bruce L. Ahrendsen ,
O. John Nwoha ,
Sandra J. Hamm  and
Diana M. Danforth
Bruce L. Dixon
Affiliation:
University of Arkansas, Division of Agriculture, Fayetteville, AR
Bruce L. Ahrendsen
Affiliation:
University of Arkansas, Division of Agriculture, Fayetteville, AR
O. John Nwoha
Affiliation:
Grambling State University, Grambling, LA
Sandra J. Hamm
Affiliation:
University of Arkansas, Division of Agriculture, Fayetteville, AR
Diana M. Danforth
Affiliation:
University of Arkansas, Division of Agriculture, Fayetteville, AR
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Abstract

Farm Service Agency (FSA) direct loans are intended to provide transitory credit to creditworthy borrowers unable to obtain conventional credit at reasonable terms. Farm loan program (FLP) effectiveness is measured in part by how readily direct loan borrowers graduate to conventional credit. A survey of FSA borrowers originating direct loans during fiscal years 1994-1996 is used to estimate graduation rates. A majority of 1994-1996 loan originators did exit the direct FLP by November 2004. A multinomial logit model indicates financial strength at origination resulted in greater likelihood of farming without direct loans approximately 9 years after loan origination.

Keywords

direct loansFarm Service Agencygraduationmultinomial logitG20G28Q12Q14
Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 39 , Issue 3 , December 2007 , pp. 471 - 487
Copyright
Copyright © Southern Agricultural Economics Association 2007

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