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An Analysis Of Lenders' Influence On Agricultural Producers' Risk Management Decisions


  • Knight, Thomas O.
  • Lovell, Ashley C.
  • Rister, M. Edward
  • Coble, Keith H.


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.

Suggested Citation

  • Knight, Thomas O. & Lovell, Ashley C. & Rister, M. Edward & Coble, Keith H., 1989. "An Analysis Of Lenders' Influence On Agricultural Producers' Risk Management Decisions," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 21(02), December.
  • Handle: RePEc:ags:sojoae:30092

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    References listed on IDEAS

    1. Anderson, Jock R. & Feder, Gershon, 2007. "Agricultural Extension," Handbook of Agricultural Economics, Elsevier.
    2. Meyer, Jack, 1987. "Two-moment Decision Models and Expected Utility Maximization," American Economic Review, American Economic Association, vol. 77(3), pages 421-430, June.
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    1. repec:oup:revage:v:31:y:2009:i:4:p:834-852. is not listed on IDEAS
    2. Hudson, Darren, 2000. "Contracting In Agriculture: A Primer For Farm Lenders," Research reports 15789, Mississippi State University, Department of Agricultural Economics.
    3. Steven C. Blank & Jeffrey McDonald, 1996. "Preferences for crop insurance when farmers are diversified," Agribusiness, John Wiley & Sons, Ltd., vol. 12(6), pages 583-592.
    4. Perry, Janet E. & Mishra, Ashok K., 1999. "Forward Contracting Of Inputs: A Farm-Level Analysis," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 17(2).
    5. Andrea E. Woolverton & Michael E. Sykuta, 2009. "Do Income Support Programs Impact Producer Hedging Decisions? Evidence from a Cross-Country Comparative," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 31(4), pages 834-852.

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    Agricultural Finance; Risk and Uncertainty;


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