IDEAS home Printed from https://ideas.repec.org/a/eme/afrpps/v74y2014i1p38-54.html

Measuring the efficiency of the Farm Credit System

Author

Listed:
  • Trang Dang
  • David Leatham
  • Bruce A. McCarl
  • Ximing Wu

Abstract

Purpose - – The purpose of this paper is to develop information on the relative efficiency of Farm Credit System (FCS) lenders. Also the evolution of relative efficiency is examined as influenced by the biofuel boom, the financial crisis, and farm income increases. The paper aims to discuss these issues. Design/methodology/approach - – A stochastic frontier production function is used to estimate technical efficiency of FCS banks and associations. Findings - – A significant difference is found in efficiency between large and small associations and banks. Larger asset bases and management compensation are found to be positively associated with efficiency. Banks are found to have higher technical efficiency than associations (66-46 percent). Association efficiency is found to be increasing indicating likely effects of recent consolidation. The financial crisis was not found to have a significant effect with the bioenergy and farm income booms being likely countervailing forces. Research limitations/implications - – Further work is needed on the impact of the biofuel boom, increases in farm income, and new regulations. Practical implications - – The study provides information and indications of strategies for FCS management including additional consolidation. Originality/value - – This does an updated assessment of FCS efficiency taking into account changes in consolidation, lending practices, and economic conditions. Implications are developed for management actions such as more consolidation. The study also uses a more advanced methodology compared to older studies.

Suggested Citation

  • Trang Dang & David Leatham & Bruce A. McCarl & Ximing Wu, 2014. "Measuring the efficiency of the Farm Credit System," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 74(1), pages 38-54, April.
    • Handle: RePEc:eme:afrpps:v:74:y:2014:i:1:p:38-54
    DOI: 10.1108/AFR-12-2011-0035
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/AFR-12-2011-0035/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/AFR-12-2011-0035/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/AFR-12-2011-0035?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
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    Citations

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


    Cited by:

    1. Gregory McKee & Albert Kagan, 2019. "The differential impact of the Dodd–Frank Act on niche non-metro lenders," Journal of Banking Regulation, Palgrave Macmillan, vol. 20(4), pages 291-301, December.
    2. Song, Minrong & Escalante, Cesar L., 2014. "Pre- and Post- Recession Input Allocation Decisions of Farm Credit System Lending Units," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170080, Agricultural and Applied Economics Association.

    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:eme:afrpps:v:74:y:2014:i:1:p:38-54. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Emerald Support (email available below). General contact details of provider: .

    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.