Agricultural Finance & Farm Management

Various trends in today’s society have sparked interest in investment in the agricultural sector. This increased interest has provided a signal for the need in understanding the historical performance of the various components of the agricultural sector and what it might reveal about future performance.

This session is a compilation of papers dealing with the application of various techniques in risk and efficiency analyses to such issues as the recent surge of bank failures among agricultural and non-agricultural lending institutions, the financial sustainability of microfinance operations in various regions in Asia and Europe, and the effect of the ethanol demand surge on livestock feed markets. Novel techniques such as traditional and ‘value at risk’ analytical methods as well as stochastic frontier approach to efficiency analysis are explored in a couple of papers in this session.

This session focuses on decision making in agriculture, covering production, investment and finance decisions. Three papers investigate what factors influence crop production choices, farm machinery investment decisions, and farm borrowing decisions. Another paper studies choices and returns of agribusiness and farm related investment portfolios.

This session presents discussions on the effects of changes in the ethanol and real estate markets on farmland values. Specifically, farmland ownership and production decisions may be affected by recent changes in ethanol and agricultural policies as well as the housing boom-bust trends of the recessionary period. In addition, the impact of the design of farm programs on cash rents is also analyzed. Another paper demonstrates the use of non-stationary panel time series techniques in analyzing the determinants of farmland values.

This session features papers that discuss the role of credit access and the idea of a targeted loan program in entry and exit farm business decisions, with a special focus on young and beginning (new) farmers. The survival and sustenance of newly-established farm businesses will rest on, among others, the availability of effective financing programs that will mitigate financing constraints and allow these young businesses to flourish into maturity. This session also includes analyses on the profitability and business viability effects of farm succession decisions and the implementation of a targeted loan program.

This session presents studies on production practices. Production practices studied include integrated pest management (IPM), best management practices for biogas recovery system in dairy operations, and organic and conventional production systems and their farm characteristics and costs/returns structures. Another paper studies the impact of weather events on the ability to conduct field operations.