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The Costs and Returns of Agricultural Credit Delivery

Author

Listed:
  • Brent A. Gloy
  • Michael A. Gunderson
  • Eddy L. LaDue

Abstract

Borrower-level data from 963 agricultural lending relationships are used to examine how several factors influence the costs and returns of extending agricultural credit. The results provide estimates of the costs and returns of agricultural lending and the extent to which these costs and returns are influenced by factors such as loan volume, lender/borrower relationship factors, and contract terms. The findings indicate that economies of size exist in agricultural credit delivery and that lenders pass most of these benefits on to borrowers through lower interest rates. In addition, the impacts of lender/borrower relationship factors were relatively small. Copyright 2005, Oxford University Press.

Suggested Citation

  • Brent A. Gloy & Michael A. Gunderson & Eddy L. LaDue, 2005. "The Costs and Returns of Agricultural Credit Delivery," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(3), pages 703-716.
    • Handle: RePEc:oup:ajagec:v:87:y:2005:i:3:p:703-716
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    File URL: http://hdl.handle.net/10.1111/j.1467-8276.2005.00757.x
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    Cited by:

    1. Gloy, Brent A. & LaDue, Eddy L. & Gunderson, Michael A., 2004. "Credit Risk Migration Experienced By Agricultural Lenders," 2004 Annual meeting, August 1-4, Denver, CO 19944, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Gunderson, Michael A. & Gloy, Brent A. & LaDue, Eddy L., 2005. "Pricing Agricultural Loans to Account for Long-Term Default Risk," 2005 Agricultural and Rural Finance Markets in Transition, October 3-4, 2005, Minneapolis, Minnesota 132750, Regional Research Committee NC-1014: Agricultural and Rural Finance Markets in Transition.
    3. repec:ags:aaea22:343924 is not listed on IDEAS
    4. Fiechter, Chad M. & Miller, Noah J. & Ifft, Jennifer & Nelson, Blaine, 2024. "Farm Characteristics and Cost of Borrowing," 2024 Annual Meeting, July 28-30, New Orleans, LA 343924, Agricultural and Applied Economics Association.
    5. Cadot, Julien, 2011. "Collaterals, Bank Monitoring and Performance: the Case of Newly Established Wine Farmers," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103414, Agricultural and Applied Economics Association.

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