Beginning farmer and rancher credit usage by socially disadvantaged status

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Bruce L. Ahrendsen ◽  
Charles B. Dodson ◽  
Gianna Short ◽  
Ronald L. Rainey ◽  
Heather A. Snell
Keyword(s):  
Census Data ◽  
White Men ◽  
Service Agency ◽  
Upper Midwest ◽  
Agricultural Credit ◽  
Content Type ◽  
Alaskan Native ◽  
Socially Disadvantaged ◽  
The Us ◽  
Farm Service Agency

PurposeThe purpose of this paper is to examine credit usage by beginning farmers and ranchers (BFR). BFR credit usage is stratified by location (state) and by socially disadvantaged farmer and rancher (SDFR, also known as historically underserved) status. SDFR groups are defined to include women; individuals with Hispanic, Latino or Spanish Origin; individuals who identify as American Indian or Alaskan Native, Black or African American, Asian, Native Hawaiian or other Pacific Islander. Non-SDFR is defined as individuals who identify as non-Hispanic, White men.Design/methodology/approachThe US Department of Agriculture’s Census of Agriculture, Agricultural Resource Management Survey (ARMS) is linked with Farm Service Agency (FSA) loan program administrative data to estimate shares of BFR operations using FSA credit. Census data provided information on population changes in total farms and BFR operations from 2012 to 2017 which are compared by SDFR status.FindingsResults reveal differences among BFR operations active in agricultural credit markets by SDFR status and state. BFR were more common among SDFR groups as well as in regions where farms tend to be smaller, such as the Northeast, compared to a more highly agricultural upper Midwest. Among BFR, non-SDFR are more likely to utilize credit than SDFR, however, FSA appeared to be crucial in enabling BFR and especially beginning SDFR groups to access loans.Originality/valueThe results are timely and of keen interest to researchers, industry and policymakers and are expected to assist in developing and adjusting policies to effectively promote and improve BFR success in general and for beginning SDFR groups.

Do farm service agency borrowers' double minority labels lead to more unfavorable loan packaging terms?

2020 ◽  
Vol 80 (5) ◽  
pp. 633-646
Author(s):  
Jyotsna Ghimire ◽  
Cesar L. Escalante ◽  
Ramesh Ghimire ◽  
Charles B. Dodson
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Simulation Optimization ◽  
Service Agency ◽  
Institutional Reforms ◽  
Content Type ◽  
Loan Terms ◽  
And Gender ◽  
Farm Service Agency ◽  
Double Minority

PurposeThis study adds a new dimension in the study of racial and gender bias in farm lending. Most previous studies analyzed the separate effects of race and gender attributes on loan approval decisions. The analysis focuses on the stipulation of loan terms (loan amount, interest rate and maturity) among approved farm loan applications. The time period analyzed spans from 2004 until 2014 during which the government has undertaken reforms to improve delivery of loan services to its clientele of minority farmers. Thus, this study's findings could help validate the effectivity of such institutional reforms affecting Farm Service Agency (FSA) lending operations.Design/methodology/approachThis study utilizes a national direct loan origination data from the FSA of the U.S. Department of Agriculture (USDA) collected from 2004 to 2014. The analysis begins by identifying significant differences in cross-tabulations of loan terms among different racial and gender classes. Seemingly unrelated regression (SUR) regression techniques are then applied for a system of equations involving the three loan packaging components. The combined effects of the prescribed loan packaging terms are subsequently analyzed under a simulation-optimization framework.FindingsRegression results validate that indeed, relative to White American borrowers, certain minority borrowers are accommodated with lower loan amounts at higher interest rates and with shorter maturities. However, these decisions seem to be prompted by credit risk management considerations. The most compelling findings include the insignificance of all double minority labeling variables, except for the interest rate equation that even produced favorable results for Hispanic American females. Simulation-optimization results further reinforce that even when one or two unfavorable loan terms are included in the packaging, double minority borrowers end up with better profitability and liquidity positions.Practical implicationsThis study provides a different perspective in dealing with the controversial minority bias in lending by presenting evidence gathered from a government farm lending institution. The USDA-FSA has been sued in numerous occasions by minority borrowers. Since then, however, it has deliberately implemented institutional reforms to rectify previous errors. This study provides empirical evidence strengthening FSA's claim of its intention to improve its delivery of loan services, especially for its socially disadvantaged borrowers with double minority classification.Originality/valueThis study pioneers the analysis of the double minority labeling effect on farm lending decisions. Its contributions to literature are further enhanced by its goal to validate the effectiveness of FSA institutional reforms undertaken since the early 2000s in order to improve credit access of and delivery of credit services to minority farm borrowers, especially those that belong to more than one minority classification.

FSA farm loan repayment under economic recession and drought conditions

2016 ◽  
Vol 76 (4) ◽  
pp. 445-461 ◽  
Author(s):  
Cesar Escalante ◽  
Minrong Song ◽  
Charles Dodson
Keyword(s):  
Commodity Prices ◽  
Economic Recession ◽  
Analytical Framework ◽  
Duration Model ◽  
Service Agency ◽  
Data Set ◽  
Content Type ◽  
Drought Conditions ◽  
Business Structures ◽  
Farm Service Agency

Purpose The purpose of this paper is to analyze the repayment records of Farm Service Agency (FSA) borrowers in two distinct US farming regions that have been experienced serious drought conditions even as the US economy was going through a recession. The analysis will identify factors that significantly influence both the probability of FSA borrowers’ survival (capability to remain in good credit standing) and temporal endurance (or length of period of good standing with creditor). Design/methodology/approach This analysis utilizes a data set of farm borrowers of the Farm Service Agency that regular farm lenders have classified as “marginal” relative to other borrowers. The research goal is addressed by confining this study’s regional focus to the Southeast and Midwest that have both dealt with financial stress arising from abnormal natural and economic conditions prevailing during the same time period. A split population duration model is employed to separately identify determinants of the probability and duration of survival (condition of good credit standing). Findings This study’s results indicate that larger loan balances, declining commodity prices, and the severity of drought conditions have adversely affected both the borrowing farms’ probability of survival and temporal endurance in terms of maintaining non-delinquent borrower standing. Notably, Midwestern farms have been relatively less affected by drought conditions compared to Southeastern farms. This study’s results validate the contention that the farms’ capability to survive and the duration of their survival can be attributed to differences in regional resource endowments, farming activities, and business structures. Originality/value This study’s analytical framework departs from the basic duration model approach by considering temporal endurance, in addition to survival probability analysis. This study’s original contributions are enhanced by its specific focus on the contrasting farm business structures and operating environments in the Midwest and Southeast regions.

Market microstructure and the historical relationship between the US farm credit system, farm service agency and commercial bank lending

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Calum G. Turvey ◽  
Amy Carduner ◽  
Jennifer Ifft
Keyword(s):  
Market Microstructure ◽  
Credit System ◽  
Agricultural Credit ◽  
Agricultural Finance ◽  
Content Type ◽  
Demand Elasticities ◽  
The Us ◽  
Farm Credit ◽  
Farm Credit System

PurposeThe purpose of this paper is to investigate the market microstructure related to the Farm Credit System (FCS), Commercial Banks (CB) and Farm Services Administration (FSA). The commercial banks frequently call out the FCS as having an unfair advantage in the agricultural finance market place due to tax exempt bonds, and an implied guarantee of those bonds. This paper addresses the issue by examining the interrelationships since 1939, while addressing the historically distinctive roles that the FCS, CB and FSA have played in the US agricultural credit market.Design/methodology/approachThere are two components to our model. The first is the estimation of short and long run credit demand elasticities, as well as land elasticities. These are estimated from a dynamic duality model using seemingly unrelated regression. The point elasticity measures are then used as independent variables in least square regressions, combined with farm specific and related macro variables, for the Cornbelt states. The dependent variable is the year-over-year changes in paired FCS, CB and FSA loans.FindingsThe genesis of the FCS was to provide credit to farmers in good and bad years. Therefore, we expected to see a countercyclical relationship between FCS and CB. This is found for the farm crisis years in the 1980s but is not a continuous characteristic of FCS lending. In good times the FCS and CB appear to compete, albeit with differentiated market segmentation into short- and long-term credit. The FSA, which was established to provide tertiary support to both the FCS and CB, appears to be responding as designed, with greater activity in bad years. The authors find the elasticity measures to be economically significant.Research limitations/implicationsThe authors conclude that the market microstructure of the agricultural credit market in the US is important. Our analysis applies a broader definition of market microstructure for institutions and intermediaries and reveals that further research examining the economic frictions caused by comparative bond vs deposit funding of agricultural credit is important.Originality/valueThe authors believe that this is the first paper to examine agricultural finance through the market microstructure lens. In addition our long-term data measures allow us to examine the economics through various sub-periods. Finally, we believe that our introduction of credit and land demand elasticities into a comparative credit model is also a first.

Tight US job market may persist due to demographics

2021 ◽  
Keyword(s):  
Monetary Policy ◽  
Baby Boomers ◽  
Inflation Rate ◽  
White Men ◽  
Retirement Age ◽  
Job Market ◽  
Content Type ◽  
Diversity And Inclusion ◽  
Generation Z ◽  
The Us

Significance Shortages vary by sector and geography. The US workforce will shrink as baby boomers (born between 1946 and 1964) retire and are replaced by the smaller cohort of Generation Z (born between 1997 and 2012). Pre-pandemic, many boomers worked past retirement age, slowing the workforce decline, but the pandemic broke that trend. Impacts The US labour market holds the key to the inflation outlook and thus the timing of the Fed’s tightening of monetary policy. Unemployment is set to drop below the so-called ‘natural’ unemployment level, the non-accelerating inflation rate of unemployment (NAIRU). Diversity and inclusion policies will accelerate the workforce exit of baby boomers as that generation has the largest share of white men.

China agreement will not help US manufacturers

2019 ◽  
Keyword(s):  
United States ◽  
The United States ◽  
Trade Negotiations ◽  
Upper Midwest ◽  
Donald Trump ◽  
Content Type ◽  
China Trade ◽  
The Us ◽  
The Impact ◽  
Trade Wars

Subject The impact of the US-China trade wars on US manufacturers. Significance The United States and China reached a tentative agreement in trade negotiations on October 11 that President Donald Trump described as "a substantial phase one deal". The deal, which is yet to be finalised, centres on China's agreement to purchase some 40-50 billion dollars' worth of additional US agricultural goods annually, and Trump's agreement to suspend a planned increase in tariffs on 250 billion dollars' worth of Chinese goods, from 25% to 30%, that was due to take effect tomorrow. However, existing tariffs on both sides remain in place. Impacts A manufacturing recession could lead to greater upper Midwest voters’ discontent. Midwestern voter discontent could help a Democrat win the presidency in 2020, and a populist win the party’s nomination. US-based manufacturers could benefit from new contracts as supply lines are revised, but costs would rise. A second Trump tax cut in 2020 could temporarily help US-based firms avoid competitiveness gaps.

scholarly journals LOOKING BEYOND FARM LOAN APPROVAL DECISIONS: LOAN PRICING AND NONPRICING TERMS FOR SOCIALLY DISADVANTAGED FARM BORROWERS

2017 ◽  
Vol 50 (1) ◽  
pp. 129-148 ◽  
Author(s):  
CESAR L. ESCALANTE ◽  
ADENOLA OSINUBI ◽  
CHARLES DODSON ◽  
CARMINA E. TAYLOR
Keyword(s):  
Interest Rates ◽  
Minority Groups ◽  
Service Agency ◽  
Loan Pricing ◽  
Credit Risks ◽  
Socially Disadvantaged ◽  
Lending Decisions ◽  
And Gender ◽  
Farm Service Agency ◽  
Loan Approval

AbstractThis study utilizes Farm Service Agency lending data to verify if previous racial and gender bias allegations still persist in more recent lending decisions. Beyond loan approval decisions, this study focuses on trends in direct loan packaging terms for approved single proprietorship farm borrowers. Results indicate that although no significant disparities were noted in loan amounts and maturities prescribed for various racial and gender minority groups, nonwhite male and female borrowers were usually charged higher interest rates than the others. Loan pricing differentials could have been the lenders' strategy for price management of borrowers' credit risks.

Clonal Structure of Invasive Cattail (Typhaceae) Stands in the Upper Midwest Region of the US

Wetlands ◽  
2011 ◽  
Vol 31 (2) ◽  
pp. 221-228 ◽  
Author(s):  
Steven E. Travis ◽  
Joy E. Marburger ◽  
Steve K. Windels ◽  
Barbora Kubátová
Keyword(s):  
Clonal Structure ◽  
Upper Midwest ◽  
The Us ◽  
Midwest Region

OCIE issues risk alert on the most frequently identified advisory fee and expense compliance issues

2018 ◽  
Vol 19 (4) ◽  
pp. 1-3
Author(s):  
Robert Van Grover
Keyword(s):  
Design Methodology ◽  
Best Practice ◽  
Investment Management ◽  
Content Type ◽  
Informed Decisions ◽  
Policies And Procedures ◽  
The Us ◽  
Investment Advisers ◽  
Practical Implications

Purpose To summarize and interpret a Risk Alert issued on April 12, 2018 by the US SEC’s Office of Compliance Inspections and Examinations (OCIE) on the most frequent advisory fee and expense compliance issues identified in recent examinations of investment advisers. Design/methodology/approach Summarizes deficiencies identified by the OCIE staff pertaining to advisory fees and expenses in the following categories: fee billing based on incorrect account valuations, billing fees in advance or with improper frequency, applying incorrect fee rates, omitting rebates and applying discounts incorrectly, disclosure issues involving advisory fees, and adviser expense misallocations. Findings In the Risk Alert, OCIE staff emphasized the importance of disclosures regarding advisory fees and expenses to the ability of clients to make informed decisions, including whether or not to engage or retain an adviser. Practical implications In light of the issues identified in the Risk Alert, advisers should assess the accuracy of disclosures and adequacy of policies and procedures regarding advisory fee billing and expenses. As a matter of best practice, advisers should implement periodic forensic reviews of billing practices to identify and correct issues relating to fee billing and expenses. Originality/value Expert guidance from experienced investment management lawyer.

Absence of the weekend effect and industry-style portfolios

2019 ◽  
Vol 12 (4) ◽  
pp. 463-475
Author(s):  
Selma Izadi ◽  
Abdullah Noman
Keyword(s):  
New York ◽  
Stock Market ◽  
Structural Breaks ◽  
Stock Exchange ◽  
Structural Break ◽  
Weekend Effect ◽  
Content Type ◽  
Market Portfolio ◽  
The Us ◽  
Using Data

Purpose The existence of the weekend effect has been reported from the 1950s to 1970s in the US stock markets. Recently, Robins and Smith (2016, Critical Finance Review, 5: 417-424) have argued that the weekend effect has disappeared after 1975. Using data on the market portfolio, they document existence of structural break before 1975 and absence of any weekend effects after that date. The purpose of this study is to contribute some new empirical evidences on the weekend effect for the industry-style portfolios in the US stock market using data over 90 years. Design/methodology/approach The authors re-examine persistence or reversal of the weekend effect in the industry portfolios consisting of The New York Stock Exchange (NYSE), The American Stock Exchange (AMEX) and The National Association of Securities Dealers Automated Quotations exchange (NASDAQ) stocks using daily returns from 1926 to 2017. Our results confirm varying dates for structural breaks across industrial portfolios. Findings As for the existence of weekend effects, the authors get mixed results for different portfolios. However, the overall findings provide broad support for the absence of weekend effects in most of the industrial portfolios as reported in Robins and Smith (2016). In addition, structural breaks for other weekdays and days of the week effects for other days have also been documented in the paper. Originality/value As far as the authors are aware, this paper is the first research that analyzes weekend effect for the industry-style portfolios in the US stock market using data over 90 years.

The effect of Medicare Part D on prescription drug composition and demand

2015 ◽  
Vol 42 (2) ◽  
pp. 170-185 ◽  
Author(s):  
David Zimmer
Keyword(s):  
Prescription Drug ◽  
Medicare Part D ◽  
Medicare Part ◽  
Part D ◽  
Content Type ◽  
The Us ◽  
Upper Respiratory ◽  
Nationally Representative ◽  
The Impact ◽  
Shed Light

Purpose – The US Medicare Modernization Act of 2003 introduced optional prescription drug coverage, beginning in 2006, widely known as Medicare Part D. This paper uses up-to-date nationally representative survey data to investigate the impact of Part D not only on drug spending and consumption, but also on the composition of drug consumption. The paper aims to discuss these issues. Design/methodology/approach – Specifically, the paper investigates whether Part D impacted the number of therapeutic classes for which drugs were prescribed, and also whether Part D lead to increased usage of drugs for specific medical conditions that typically receive drug-intensive therapies. Findings – In addition to confirming findings from previous studies, this paper shows that Part D increased the number of therapeutic classes to which seniors receive drugs by approximately four classes. Part D also lead to increased usage of drugs used to treat upper respiratory disease, hypertension, and diabetes. Originality/value – While mostly concurring with previous studies on the spending impacts of Part D, this paper is the first to shed light on other impacts of Part D, specifically with respect to its impact on therapeutic classes for which drugs are prescribed.

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