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Financing Constraints and Access to Credit in a PostcrisisEnvironment: Evidence from New Farmers in Alabama

Published online by Cambridge University Press:  26 January 2015

Valentina Hartarska  and
Dennis Nadolnyak
Valentina Hartarska
Affiliation:
Department of Agricultural Economics and Rural Sociology, Auburn University, Auburn, Alabama
Dennis Nadolnyak
Affiliation:
Department of Agricultural Economics and Rural Sociology, Auburn University, Auburn, Alabama
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Abstract

We use survey data to study the degree to which new farming operations inAlabama were financially constrained after the 2008 financial crisis. Next,we control for farmers' self-selection out of the credit market and identifywhich farmers were able to secure loans during the period of 2009–2010. Theresults show that new farmers that started any part of their operation after2005 were financially constrained but no evidence that their financingconstraints were affected by the crisis. As expected, we find that lendingwas collateral-driven, although lenders also considered farmers'profitability and cash flows.

Keywords

financing constraintsaccess to creditfinancial crisisbeginning farmersG31Q12Q14
Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 44 , Issue 4 , November 2012 , pp. 607 - 621
Copyright
Copyright © Southern Agricultural Economics Association 2012

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