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Commercial Bank Usage of the Farm Service Agency Interest Assistance Program


  • Ahrendsen, Bruce L.
  • Dixon, Bruce L.
  • Bacchus, Chris
  • Settlage, Latisha A.


The Farm Service Agency’s (FSA) interest assistance interest assistance program allows lenders to enter into an agreement with FSA to subsidize a guaranteed farm operating loan by reducing the interest rate charged to the borrower by up to four percentage points. With fiscal 1997-2003 data, an incidental truncation model framework is used to analyze: 1) commercial bank usage of the program; and 2) intensity of commercial bank usage. The results suggest bank characteristics, farm and non-farm financial characteristics, region, and time are important factors in determining bank usage of the interest assistance program and its intensity.

Suggested Citation

  • Ahrendsen, Bruce L. & Dixon, Bruce L. & Bacchus, Chris & Settlage, Latisha A., 2006. "Commercial Bank Usage of the Farm Service Agency Interest Assistance Program," 2006 Agricultural and Rural Finance Markets in Transition, October 2-3, 2006, Washington, DC 132773, Regional Research Committee NC-1014: Agricultural and Rural Finance Markets in Transition.
  • Handle: RePEc:ags:nc2006:132773
    DOI: 10.22004/ag.econ.132773

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    References listed on IDEAS

    1. Koenig, Steven R. & Dodson, Charles B., 1998. "When Are Farm Interest Rate Subsidy Programs Most Effective?," Agricultural Information Bulletins 33693, United States Department of Agriculture, Economic Research Service.
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