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The Effects of Business Maturity, Experience and Size on the Farms’ Economic Vitality: A Credit Migration Analysis of Farm Service Agency Borrowers

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  • Rusiana, Hofner D.
  • Escalante, Cesar L.

Abstract

This paper examines the relative financial strength and endurance of several paired classes of farmers according to business maturity (beginning versus mature farm businesses), farm operators’ age/experience (young versus older, more experienced farm operators), and farm size (small versus large farm businesses) by utilizing random-effects ordered logistic techniques. Results show that increasing farm size will lead to a higher probability of class upgrades. Being a young farm operator, meanwhile, decreases this probability. Positive changes in money supply and farm real estate values were found to increase the likelihood of credit upgrades. Results also show trend reversal of credit risk movement, where upgrades (downgrades) are more likely to be followed by downgrades (upgrades).

Suggested Citation

  • Rusiana, Hofner D. & Escalante, Cesar L., 2015. "The Effects of Business Maturity, Experience and Size on the Farms’ Economic Vitality: A Credit Migration Analysis of Farm Service Agency Borrowers," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205282, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea15:205282
    DOI: 10.22004/ag.econ.205282
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    References listed on IDEAS

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