Work

The Financial Status and Local Credit Market Conditions of U.S. Farms Engaged in Multiple Borrowing

Year: 2025

Type: article

Abstract: ABSTRACT Agricultural producers often borrow from multiple lenders, raising concerns about credit risk and monitoring. We construct detailed farm‐level measures of how debt is distributed across lenders and examine how farm financial status and the physical presence of local lenders are linked to this practice. Using nearly two decades of farm financial records from Kansas, we find that larger, more leveraged, and more profitable farms are more likely to engage in multiple borrowing. Proximity to Farm Credit locations is unrelated to multiple borrowing, while more banks are linked to less, underscoring the importance of maintaining relationship lending for banks.

Source: Applied Economic Perspectives and Policy

DOI: 10.1002/aepp.70027

Authors: Sylvanus Gaku, Jennifer Ifft, Brady Brewer, Luke Byers

Institutions: University of Wisconsin–Madison, Kansas State University

Language: English

Topic: Agricultural economics and policies

Subfield: Safety Research

Field: Social Sciences

Domain: Social Sciences

SDG: Zero hunger

Open Access status: hybrid

Estimated APC paid: $3,750