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FSA Direct Farm Loan Program Graduation Rates and Reasons for Exiting

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  • Dixon, Bruce L.
  • Ahrendsen, Bruce L.
  • Nwoha, O. John
  • Hamm, Sandra J.
  • Danforth, Diana M.

Abstract

Farm Service Agency (FSA) direct loans are intended to provide transitory credit to creditworthy borrowers unable to obtain conventional credit at reasonable terms. Farm loan program (FLP) effectiveness is measured in part by how readily direct loan borrowers graduate to conventional credit. A survey of FSA borrowers originating direct loans during fiscal years 1994-1996 is used to estimate graduation rates. A majority of 1994-1996 loan originators did exit the direct FLP by November 2004. A multinomial logit model indicates financial strength at origination resulted in greater likelihood of farming without direct loans approximately 9 years after loan origination.

Suggested Citation

  • Dixon, Bruce L. & Ahrendsen, Bruce L. & Nwoha, O. John & Hamm, Sandra J. & Danforth, Diana M., 2007. "FSA Direct Farm Loan Program Graduation Rates and Reasons for Exiting," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 39(3), pages 471-487, December.
    • Handle: RePEc:cup:jagaec:v:39:y:2007:i:03:p:471-487_02
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    References listed on IDEAS

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    1. Escalante, Cesar L. & Brooks, Rodney L. & Epperson, James E. & Stegelin, Forrest E., 2006. "Credit Risk Assessment and Racial Minority Lending at the Farm Service Agency," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 38(1), pages 61-75, April.
    2. H. Frederick Gale, 2003. "Age-Specific Patterns of Exit and Entry in U.S. Farming, 1978–1997," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 25(1), pages 168-186.
    3. Nwoha, Ogbonnaya John & Ahrendsen, Bruce L. & Dixon, Bruce L. & Chavez, Eddie C. & Hamm, Sandra J. & Settlage, Daniel M. & Danforth, Diana M., 2005. "Farm Service Agency Direct Farm Loan Program Effectiveness Study," Research Reports 15772, University of Arkansas, Arkansas Agricultural Experiment Station.
    4. Bruce L. Ahrendsen & Charles B. Dodson & Bruce L. Dixon & Steven R. Koenig, 2005. "Research on USDA farm credit programs: past, present, and future," Agricultural Finance Review, Emerald Group Publishing, vol. 65(2), pages 165-181, July.
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    1. Dixon, Bruce L. & Ahrendsen, Bruce L. & Landerito, Aiko O. & Hamm, Sandra J. & Danforth, Diana M., 2010. "Determinants of FSA Direct Loan Borrowers' Financial Improvement and Loan Servicing Actions," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 28(2), pages 1-19.
    2. Goeringer, L. Paul & Goodwin, Harold L., Jr. & Dixon, Bruce L. & Popp, Michael P., 2013. "EnVesting in an Agricultural Legacy: Design and Implementation of a Targeted Young and Beginning Farmer Loan Program in Arkansas," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 143037, Southern Agricultural Economics Association.

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