IDEAS home Printed from https://ideas.repec.org/p/ags/aaea84/279062.html
   My bibliography  Save this paper

Subsidized Credit And Investment In Agriculture: The Special Case Of Farm Real Estate

Author

Listed:
  • Hughes, Dean W.
  • Penson Jr., John B.
  • Bednarz, Curtis R.

Abstract

The purpose of this paper is to provide initial estimates of the impact that government farm credit policies have on the market for farm land. Three specific questions are addressed. How have government farm credit programs influenced (1) farm land prices, (2) farm indebtedness and the (3) the fraction of farm land owned by farmers? The paper is divided into three major sections. First, a theoretical model of the farm land market capable of capturing the effects of interest rate subsidies is developed. The second section presents the results of estimating the model and simulating it under different subsidy regimes.1 The final section summarizes the findings of this paper and raises some questions for further research.

Suggested Citation

  • Hughes, Dean W. & Penson Jr., John B. & Bednarz, Curtis R., 1984. "Subsidized Credit And Investment In Agriculture: The Special Case Of Farm Real Estate," 1984 Annual Meeting, August 5-8, Ithaca, New York 279062, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea84:279062
    DOI: 10.22004/ag.econ.279062
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/279062/files/aaea-1984-116.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.279062?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. John B. Penson, 1972. "Demand for Financial Assets in the Farm Sector: A Portfolio Balance Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 54(2), pages 163-174.
    2. Michael Boehlje & Steven Griffin, 1979. "Financial Impacts of Government Support Price Programs," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 61(2), pages 285-296.
    3. John B. Penson & Robert F. J. Romain & Dean W. Hughes, 1981. "Net Investment in Farm Tractors: An Econometric Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 63(4), pages 629-635.
    4. J. Tobin, 1958. "Liquidity Preference as Behavior Towards Risk," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 25(2), pages 65-86.
    5. Peter J. Barry, 1980. "Capital Asset Pricing and Farm Real Estate," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 62(3), pages 549-553.
    6. Peter J. Barry, 1980. "Financial Impacts of Government Support Price Programs: Comment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 62(3), pages 599-602.
    7. Emanuel Melichar, 1979. "Capital Gains versus Current Income in the Farming Sector," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 61(5), pages 1085-1092.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Herr, William, 1991. "Beef packing, beef processing, livestock slaughter, meatpacking costs, computer applications," Staff Reports 278517, United States Department of Agriculture, Economic Research Service.
    2. Kułyk Piotr, 2012. "The imperfections of a credit market in agriculture," Management, Sciendo, vol. 16(1), pages 250-263, May.
    3. Stam, Jerome M., 1995. "Credit as a Factor Influencing Farmland Values," Staff Reports 278779, United States Department of Agriculture, Economic Research Service.
    4. Mishra, Ashok K. & Moss, Charles B. & Erickson, Kenneth W., 2004. "Effect Of Debt Solvency On Farmland Values: A Panel Cointegration Approach," 2004 Annual meeting, August 1-4, Denver, CO 20261, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Penson, John B. & Taylor, C. Robert, 1990. "Modeling the Interface Between Agriculture and the General Economy," Working Papers 258042, Texas A&M University, Agricultural and Food Policy Center.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Moore, Kevin Clare, 1985. "Predictive econometric modeling of the United States farmland market: an empirical test of the rational expectations hypothesis," ISU General Staff Papers 198501010800008872, Iowa State University, Department of Economics.
    2. Li, Xin, 2016. "The Farmland Valuation Revisited," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 4(2), pages 1-14, April.
    3. Feng, Xiaoguang, 2017. "Three essays on agricultural insurance and farm real estate investment," ISU General Staff Papers 201701010800007133, Iowa State University, Department of Economics.
    4. Shaik, Saleem & Atwood, Joseph A. & Helmers, Glenn A., 2012. "Did 1933 new deal legislation contribute to farm real estate values: A regional analysis," Journal of Policy Modeling, Elsevier, vol. 34(6), pages 801-816.
    5. Sanchirico, James & Newell, Richard & Papps, Kerry, 2005. "Asset Pricing in Created Markets for Fishing Quotas," RFF Working Paper Series dp-05-46, Resources for the Future.
    6. Chi Su & Richard A. Schoney & James F. Nolan, 2023. "Buy, sell or rent the farm: succession planning and the future of farming on the Great Plains," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 18(3), pages 627-669, July.
    7. B. James Deaton & Chad Lawley, 2022. "A survey of literature examining farmland prices: A Canadian focus," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 70(2), pages 95-121, June.
    8. Lowenberg-DeBoer, James M., 1985. "The impact of farmland price changes on farm size, financial structure enterprise choice," ISU General Staff Papers 198501010800009722, Iowa State University, Department of Economics.
    9. Erickson, Kenneth W., 1991. "Rates of Return in the Farm and Non-Farm Sectors: How do They Compare?," WAEA/ WFEA Conference Archive (1929-1995) 321418, Western Agricultural Economics Association.
    10. Penson, John B. & Chen, Dean T., 1988. "Design and Application of a Structural General Equilibrium Model to Farm Policy Analysis," Staff Reports 257926, Texas A&M University, Agricultural and Food Policy Center.
    11. Allen, Pamela & McConnell, Kenneth E., 1991. "Explaining Risk in Asset Markets: A Varying Parameters Approach," 1991 Annual Meeting, August 4-7, Manhattan, Kansas 271159, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Mishra, Ashok K. & Moss, Charles B. & Erickson, Kenneth W., 2004. "Effect Of Debt Solvency On Farmland Values: A Panel Cointegration Approach," 2004 Annual meeting, August 1-4, Denver, CO 20261, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    13. Stam, Jerome M., 1995. "Credit as a Factor Influencing Farmland Values," Staff Reports 278779, United States Department of Agriculture, Economic Research Service.
    14. Hanson, Steven D., 1999. "A Simple Framework For Determining The Fundamental Agricultural-Use Value Of Michigan Farmland," Staff Paper Series 11641, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    15. Painter, Marvin J., 2015. "Assessing the Required Risk Premium for North American Farmland Investment," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2015, pages 1-19.
    16. Mark A. Sunderman & Ronald W. Spahr & John W. Birch & Russell M. Oster, 2000. "Impact of Ranch and Market Factors on an Index of Agricultural Holding Period Returns," Journal of Real Estate Research, American Real Estate Society, vol. 19(2), pages 209-234.
    17. Erickson, Kenneth W. & Mishra, Ashok K. & Moss, Charles B., 2001. "Rates Of Return In The Farm And Non-Farm Sectors: A Time Series Comparison," 2001 Annual Meeting, July 8-11, 2001, Logan, Utah 36148, Western Agricultural Economics Association.
    18. Sherrick, Bruce J. & Irwin, Scott H. & Forster, D. Lynn, 1986. "Returns to Capital in Agriculture: A Historical View Using Portfolio Theory," 1986 Annual Meeting, July 27-30, Reno, Nevada 278457, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    19. C. Arden Pope III & H. L. Goodwin, 1984. "Impacts of Consumptive Demand on Rural Land Values," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(5), pages 750-754.
    20. Penson, John B. & Taylor, C. Robert, 1990. "Modeling the Interface Between Agriculture and the General Economy," Working Papers 258042, Texas A&M University, Agricultural and Food Policy Center.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aaea84:279062. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: http://www.aaea.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.