Credit Constraints and Beginning Farmers’ Production in the U.S.: Evidence from Propensity Score Matching with Principal Component Clustering

Griffin, Bretford; Hartarska, Valentina; Nadolnyak, Denis A.

doi:10.3390/su12145537

Cited by 13 publications

(18 citation statements)

References 24 publications

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“…These landowner inquiries could resemble the in-depth primary inquiries into BFR finances relative to other factors that influence their viability (Bruce, 2019;Munden-Dixon et al, 2019;Pilgeram and Amos, 2015;Rissing, 2019;Suryanata et al, 2021). They could also resemble a landowner version of secondary data analyses of BFR financial circumstances (Griffin et al, 2020;Katchova and Ahearn, 2017;Nadolnyak et al, 2019;Williamson, 2017). Landowners' responses demonstrated the widespread appeal of the notion of transferring to a BFR.…”

Section: Discussionmentioning

confidence: 99%

See 1 more Smart Citation

The landowner role in beginning farmer/rancher land access: predictors of landowners' views of extrafamilial farm transfer to a BFR

Valliant¹,

Dickinson²,

Zhang³

et al. 2021

AFR

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PurposeBeginning farmers and ranchers (BFRs) are more likely to access land through an unrelated landowner than through family. Thus, farm and ranch owners who might transfer their land or businesses out of family are potential sources of land access for BFRs and are the most frequent participants in incentive programs to facilitate land transfer to BFRs. To assist in identifying landowners who might transfer out of family, the paper aims to explore similarities and differences between landowners according to their expectations for intra-familial versus extra-familial farm transfer.Design/methodology/approachPairwise and regression analysis of USA Midwestern and Plains landowners' responses to an online survey (n = 322).FindingsLandowners who might transfer out of family were likely to need the proceeds from a land sale to finance their retirement. Landowners' financial needs interacted with their widespread interest in transferring to a BFR such that 97% of owners who expected extra-familial transfer wanted to transfer to a BFR. There were also statistical patterns around the size of owners' landholdings in relation to their transfer plans.Research limitations/implicationsThis exploratory inquiry suggests patterns for future research to examine, especially around landowners' juxtaposition of their retirement income and their interest in transferring to a BFR and how to align these priorities and values.Originality/valueBy exploring the characteristics of landowners who are the most likely to provide land access to BFRs, the authors begin to examine how to target these owners in program outreach. Patterns for further exploration point to landowners' financial needs in relation to their interest in helping a BFR to get started in agriculture.

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Section: Discussionmentioning

confidence: 99%

“…, 2019; Pilgeram and Amos, 2015; Rissing, 2019; Suryanata et al , 2021). They could also resemble a landowner version of secondary data analyses of BFR financial circumstances (Griffin et al. , 2020; Katchova and Ahearn, 2017; Nadolnyak et al.…”

Section: Discussionmentioning

confidence: 99%

The landowner role in beginning farmer/rancher land access: predictors of landowners' views of extrafamilial farm transfer to a BFR

Valliant¹,

Dickinson²,

Zhang³

et al. 2021

AFR

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“…In related work, Adhikari et al (2009) show that the profitability to young and beginning farmers of adopting genetically modified crops varies by crop type and operation profitability level. More directly related to this article, Griffin et al (2020) explore how credit constraints relate to production on beginning farms. Using ARMS data and a propensity score matching approach, the authors argue that lower production by beginning farmers and ranchers is associated with credit constraints.…”

Section: Land Tenure and Profitability For Young Farmersmentioning

confidence: 99%

“…(2009) show that the profitability to young and beginning farmers of adopting genetically modified crops varies by crop type and operation profitability level. More directly related to this article, Griffin et al. (2020) explore how credit constraints relate to production on beginning farms.…”

Section: Literaturementioning

confidence: 99%

Land tenure and profitability among young farmers and ranchers

Stevens¹,

Wu²

2021

AFR

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PurposeThe purpose of this article is to investigate how land tenure correlates with measures of profitability among young farmers and ranchers in the United States. The authors hypothesize that young producers who own a larger proportion of their operation face different incentives between short- and long-run returns than young producers who primarily rent their land. The authors analyze whether these differing incentives result in observable differences in various measures of profitability.Design/methodology/approachThe authors use state-level data from the Agricultural Resource Management Survey (ARMS) from 2003 to 2018 to estimate fixed-effects panel models correlating land tenure with the value of farm production, expenditures on repairs and maintenance, net farm income, total operator household income from farming, rate of return on assets (ROA) and rate of return on equity (ROE).FindingsThe authors find different correlations for crop farms and livestock farms, as well as different correlations for farms with the lowest and highest gross sales. For crop farms, renting land is associated with higher production, higher income, higher ROA and higher ROE. For livestock farms, renting land is associated with lower production.Originality/valueThis study rigorously investigates the role of land tenure specifically among young farmers and ranchers in the United States. By better understanding how land ownership affects profitability among beginning farmers and ranchers, policymakers will be able to better target public resources to support the next generation of producers.

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“…In two USDA reports on beginning farmers and ranchers, a beginning farm or ranch is defined as one in which all operators have no more than 10 years of experience as a farm or ranch operator (Key and Lyons, 2019;Ahearn and Newton, 2009). Griffin et al (2020) have a similar definition by confining their analysis to soleproprietor operations. In other cases, while data appear to be based on the farm operation, it is not entirely clear how the jump is made from beginning operator to beginning operation (Mishra et al, 2009;Inwood and Clark, 2013;Kauffman, 2013;Katchova andAhearn, 2015, 2017;Key et al, 2018;Katchova and Dinterman, 2018).…”

Section: Definitions Of Beginning Farmersmentioning

confidence: 99%

Unique financing strategies among beginning farmers and ranchers: differences among multigenerational and beginning operations

McFadden

Bauman

Hadrich

et al. 2021

AFR

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PurposeBeginning farmers have unique challenges securing credit because they are less likely to have established sales and collateral for secured loans. This article explores US beginning farmers’ financing strategies relative to those of established operations, with a focus on the source of financing and debt structure (short- vs long-term usage). Agricultural operations commonly use nontraditional financing tools and strategies to start, build and/or sustain their businesses. This article provides a comparative overview of financing strategies comparing established operators to operations with only beginning operators, as well as those multigenerational operations with at least one beginning operator.Design/methodology/approachThe study uses 2013–2016 USDA Agricultural Resource Management Survey data to explore how various financing patterns vary across US beginning farmers and ranchers with a particular focus on understanding differences where (1) all operators are beginning, (2) there is a mix of beginning and established operators and (3) all operators are established.FindingsThis article explores how the nature of beginning farmer status, human capital resources and alternative marketing strategies may influence financial management strategies and lead to differential use of nontraditional financing sources for beginning farmers and ranchers.Originality/valueThough exploratory, the authors hope that attention to patterns among US beginning farmers and ranchers of reliance on human capital resources including off-farm income and type of beginning farm operation, nontraditional government support programs and alternative marketing strategies can provide important information as to the role of nontraditional credit in the US farm economy.

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Credit Constraints and Beginning Farmers’ Production in the U.S.: Evidence from Propensity Score Matching with Principal Component Clustering

Cited by 13 publications

References 24 publications

The landowner role in beginning farmer/rancher land access: predictors of landowners' views of extrafamilial farm transfer to a BFR

The landowner role in beginning farmer/rancher land access: predictors of landowners' views of extrafamilial farm transfer to a BFR

Land tenure and profitability among young farmers and ranchers

Unique financing strategies among beginning farmers and ranchers: differences among multigenerational and beginning operations

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