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Financing Constraints and Access to Credit in Post Crisis Environment: Evidence from New Farmers in Alabama

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  • Hartarska, Valentina M.
  • Nadolnyak, Denis A.

Abstract

We use survey data to study the level of financing constrains faced by new farmers in Alabama post 2008, and identify who got loans. We find that new farmers are financially constrained but not impacted by the crisis. Lending was collateral driven, although lenders also considered profitability and cash flows.

Suggested Citation

  • Hartarska, Valentina M. & Nadolnyak, Denis A., 2012. "Financing Constraints and Access to Credit in Post Crisis Environment: Evidence from New Farmers in Alabama," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119799, Southern Agricultural Economics Association.
  • Handle: RePEc:ags:saea12:119799
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    File URL: http://purl.umn.edu/119799
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    References listed on IDEAS

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    1. Hartarska, Valentina & Nadolnyak, Denis, 2008. "An Impact Analysis of Microfinance in Bosnia and Herzegovina," World Development, Elsevier, vol. 36(12), pages 2605-2619, December.
    2. Briggeman, Brian C., 2011. "The Role Of Debt In Farmland Ownership," Choices, Agricultural and Applied Economics Association, vol. 26(2).
    3. Ellinger, Paul N., 2009. "Financial Markets and Agricultural Credit at a Time of Uncertainty," Choices, Agricultural and Applied Economics Association, vol. 24(1).
    4. Cleary, Sean & Povel, Paul & Raith, Michael, 2007. "The U-Shaped Investment Curve: Theory and Evidence," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 42(01), pages 1-39, March.
    5. Van de Ven, Wynand P. M. M. & Van Praag, Bernard M. S., 1981. "The demand for deductibles in private health insurance : A probit model with sample selection," Journal of Econometrics, Elsevier, vol. 17(2), pages 229-252, November.
    6. Suresh Sundaresan (ed.), 2008. "Microfinance," Books, Edward Elgar Publishing, number 13148.
    7. Geert Thijssen, 1996. "Farmers' Investment Behavior: An Empirical Assessment of Two Specifications of Expectations," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(1), pages 166-174.
    8. Hartarska, Valentina M. & Mai, Chi, 2008. "Financing Constraints and the Family Farm: How do Families React?," 2008 Annual Meeting, February 2-6, 2008, Dallas, Texas 6861, Southern Agricultural Economics Association.
    9. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    10. Ashok Mishra & Christine Wilson & Robert Williams, 2009. "Factors affecting financial performance of new and beginning farmers," Agricultural Finance Review, Emerald Group Publishing, vol. 69(2), pages 160-179, July.
    11. Ralph Bierlen & Allen M. Featherstone, 1998. "Fundamental q, Cash Flow, and Investment: Evidence from Farm Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(3), pages 427-435, August.
    12. Fabio R. Chaddad & Michael L. Cook & Thomas Heckelei, 2005. "Testing for the Presence of Financial Constraints in US Agricultural Cooperatives: An Investment Behaviour Approach," Journal of Agricultural Economics, Wiley Blackwell, vol. 56(3), pages 385-397.
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    Cited by:

    1. Liang, Lu, 2014. "Federal Crop Insurance and Credit Constraints: Theory and Evidence," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 169825, Agricultural and Applied Economics Association.

    More about this item

    Keywords

    financing constraints; access to agricultural credit; new farmers; Agricultural Finance; Financial Economics; Risk and Uncertainty; G31; Q12; Q14;

    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance

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