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An Analysis of Lenders' Influence on Agricultural Producers' Risk Management Decisions

Published online by Cambridge University Press:  05 September 2016

Thomas O. Knight ,
Ashley C. Lovell ,
M. Edward Rister  and
Keith H. Coble
Thomas O. Knight
Affiliation:
Texas A&M University System
Ashley C. Lovell
Affiliation:
Texas A&M University System
M. Edward Rister
Affiliation:
Texas A&M University System
Keith H. Coble
Affiliation:
Texas A&M University System
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Abstract

Agricultural lenders have a stake in and are in a position to influence their borrowers' management decisions. Risk management practice adoption is an area in which lenders might want to exercise this influence. This study employs logistic statistical models to estimate lenders' influence on crop producers' decisions regarding use of three alternative risk management practices: federal multiple-peril crop insurance, crop hail and fire insurance, and forward contracting. Results suggest lenders can exert significant influence on these decisions but that poor communication between lenders and borrowers likely reduces this influence.

Keywords

risk managementcrop insuranceforward contracting
Type
Submitted Articles
Information
Journal of Agricultural and Applied Economics , Volume 21 , Issue 2 , December 1989 , pp. 21 - 33
Copyright
Copyright © Southern Agricultural Economics Association 1989

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