IDEAS home Printed from https://ideas.repec.org/a/ags/sojoae/30092.html

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

Author

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

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.

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(2), pages 1-13, December.
    • Handle: RePEc:ags:sojoae:30092
    DOI: 10.22004/ag.econ.30092
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/30092/files/21020021.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.30092?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. Oral Capps & Randall A. Kramer, 1985. "Analysis of Food Stamp Participation Using Qualitative Choice Models," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(1), pages 49-59.
    2. Patrick, George F., 1984. "Producer's Attitudes, Perceptions and Management Responses to Variability," Regional Research Projects >1984: S-180 Annual Meeting, March 25-28, 1984, New Orleans, Louisiana 307239, Regional Research Projects > S-180: An Economic Analysis of Risk Management Strategies for Agricultural Production Firms.
    3. repec:cup:jagaec:v:17:y:1985:i:02:p:105-116_02 is not listed on IDEAS
    4. Peter J. Barry & David R. Willmann, 1976. "A Risk-Programming Analysis of Forward Contracting with Credit Constraints," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 58(1), pages 62-70.
    5. Boggess, William G. & Anaman, Kwabena A. & Hanson, Gregory D., 1985. "Importance, Causes, And Management Responses To Farm Risks: Evidence From Florida And Alabama," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 17(2), pages 1-12, December.
    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. 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, December.
    2. Bullock, W. I. & Ortmann, G. F. & Levin, J. B., 1994. "Farmer Characteristics, Risk Sources And Managerial Responses To Risk In Vegetable Farming: Evidence From Large- And Small-Scale Commercial Vegetable Farmers In Kwazulu-Natal," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 33(3), September.
    3. Aymeric Ricome & Arnaud Reynaud, 2022. "Marketing contract choices in agriculture: The role of price expectation and price risk management," Agricultural Economics, International Association of Agricultural Economists, vol. 53(1), pages 170-186, January.
    4. Todd H. Kuethe & Mitch Morehart, 2012. "The profit impacts of risk management tool adoption," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 72(1), pages 104-116, May.
    5. Jamal Shah & Majed Alharthi, 2025. "The recursive impact in the multivariate probit model: An application on farmers’ decisions for opting risk management strategies," Agricultural Economics, International Association of Agricultural Economists, vol. 56(1), pages 124-144, January.
    6. Hudson, Darren, 2000. "Contracting In Agriculture: A Primer For Farm Lenders," Research Reports 15789, Mississippi State University, Department of Agricultural Economics.
    7. 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.
    8. 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), pages 1-15.

    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. Young, Katherine D. & Shumway, C. Richard, 1991. "Cow-Calf Producers' Perceived Profit Maximization Objective: A Logit Analysis," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 23(01), pages 1-8, July.
    2. Meiring, J. A. & Oosthuizen, L. K., 1995. "Risiko-Bronne En Gepaardgaande Bestuursoptrede: Persepsies Van Besproeiingsboere Benede Die P.K. Le Rouxdam," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 34(01), March.
    3. Asplund, Nathan M. & Forster, D. Lynn & Stout, Thomas T., "undated". "Participation By Farmers In Forward Contracting And Hedging," 1989 Annual Meeting, July 30-August 2, Baton Rouge, Louisiana 270516, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Garcia, Philip & Hudson, Michael A. & Waller, Mark L., 1988. "The Pricing Efficiency Of Agricultural Futures Markets: An Analysis Of Previous Research Results," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 20(01), pages 1-12, July.
    5. Wang, H. Holly & Young, Douglas L. & Camara, Oumou M., 2000. "The Role Of Environmental Education In Predicting Adoption Of Wind Erosion Control Practices," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(2), pages 1-12, December.
    6. Gempesaw, Conrado M., II & Tambe, A.M. & Nayga, Rodolfo M., Jr. & Toensmeyer, Ulrich C., 1988. "The Single Index Market Model In Agriculture," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 17(2), pages 1-9, October.
    7. R. M. Wasantha Rathnayake, "undated". "Estimating Demand for Turtle Conservation at the Rekawa Sanctuary in Sri Lanka," Working papers 92, The South Asian Network for Development and Environmental Economics.
    8. Huang, Ying, 2012. "an econometric study of the impact of economic variables on adult obesity and food assistance program participation in the NLSY panel," ISU General Staff Papers 201201010800003717, Iowa State University, Department of Economics.
    9. McAleer, Michael, 1995. "The significance of testing empirical non-nested models," Journal of Econometrics, Elsevier, vol. 67(1), pages 149-171, May.
    10. Wilson, Paul N. & Gundersen, Carl E., 1985. "Financial Risk In Cotton Production," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 17(2), pages 1-8, December.
    11. Caffey, Rex H. & Kazmierczak, Richard F., Jr., 1994. "Factors Influencing Technology Adoption In A Louisiana Aquaculture System," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 26(01), pages 1-11, July.
    12. McCarl, Bruce A. & Musser, Wesley N., 1985. "Modeling Long Run Risk In Production And Investment Decisions," Regional Research Projects > 1985: S-180 Annual Meeting, March 24-27, 1985, Charleston, South Carolina 271799, Regional Research Projects > S-180: An Economic Analysis of Risk Management Strategies for Agricultural Production Firms.
    13. Boyer, Christopher N. & Larson, James A. & Roberts, Roland K. & McClure, Angela T. & Tyler, Donald D. & Smith, S. Aaron, "undated". "Probability of Irrigated Corn Being Profitable in a Humid Region," 2014 Annual Meeting, February 1-4, 2014, Dallas, Texas 162470, Southern Agricultural Economics Association.
    14. Lillywhite, Jay M. & Simonsen, J., 2008. "Understanding Factors That Influence Breeders to Sell Bulls at Performance Tests," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 40(3), pages 1-13, December.
    15. Boggess, William G. & Anaman, Kwabena A. & Hanson, Gregory D., 1985. "Importance, Causes, And Management Responses To Farm Risks: Evidence From Florida And Alabama," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 17(2), pages 1-12, December.
    16. Waweru, Caroline Waithira & Nyikal, Rose & Busienei, John R, "undated". "An Analysis Of Risk Attitudes And Risk Management Strategies Among Dairy Farmers In Murang’A County, Kenya," Dissertations and Theses 271063, University of Nairobi, Department of Agricultural Economics.
    17. Musser, Wesley N. & Shurley, W. Donald & Williams, Floyd W., 1980. "An E-V Analysis Of Beef Calf Backgrounding Systems In Georgia," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 12(2), pages 1-6, December.
    18. Eddleman, Bobby R. & Moya-Rodriguez, J.E., 1979. "Influence Of Market Diversification On Farm Income Variability Of Soybean Producers," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 11(01), pages 1-5, July.
    19. S. Martin & F. McLeay, 1998. "The Diversity of Farmers' Risk Management Strategies in a Deregulated New Zealand Environment," Journal of Agricultural Economics, Wiley Blackwell, vol. 49(2), pages 218-233, June.
    20. Djokoto, Justice Gameli & Afari-Sefa, Victor, 2017. "Alternative functional forms for technology choice: Application to cocoa production technologies," Technology in Society, Elsevier, vol. 50(C), pages 110-120.

    More about this item

    Keywords

    ;
    ;

    Statistics

    Access and download statistics

    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:sojoae:30092. 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: https://edirc.repec.org/data/saeaaea.html .

    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.