Abstract
Ongoing structural change in agriculture is significantly affecting the nature of risks faced by agricultural producers, the menu of available risk management practices, and the distributions of risk and returns within the food system (Boehlje and Lins 1998). A tri-model structure has emerged in production agriculture characterized by the co-existence of large industrialized units, commercial-scale family operations, and small, part-time or limited resource farms (see Economic Research Service 2000) for a more extensive typology). The industrialized component is characterized in part by large size, high levels of vertical coordination between agricultural production and other stages of the food system, and internalization of numerous risk management functions and other services (e.g., legal, accounting, communications, government relationships). Small farms, while numerous, make limited contributions to overall economic activity, are heavily dependent on non-farm income, and engage in minimal risk management.
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsPreview
Unable to display preview. Download preview PDF.
References
Ahrendsen, B.L., R.N. Collender, and B.L. Dixon. 1994. “An Empirical Analysis of Optimal Farm Capital Structure Decisions.” Agricultural Finance Review 54: 108–119.
Baker, C.B. 1968. “Credit in the Production Organization of the Firm.” American Journal of Agricultural Economics 49: 507–521.
Barry, P.J. 1980. “Capital Asset Pricing and Farm Real Estate.” American Journal of Agricultural Economics 62: 41–46.
Barry, P.J. 1995. The Effects of Credit Policies on U.S. Agriculture. Washington, D.C.: The AEI Press.
Barry, P.J., and C.B. Baker. 1971. “Reservation Prices on Credit Use: A Measure of Response to Uncertainty.” American Journal of Agricultural Economics 53: 222–227.
Barry, P.J., C.B. Baker, and L.R. Sanint. 1981. “Farmers’ Credit Risks and Liquidity Management.” American Journal of Agricultural Economics 63: 216–227.
Barry, P.J., R. Bierlen, and N. Sotomayor. 2000. “Financial Structure of Farm Businesses Under Imperfect Capital Markets.” American Journal of Agricultural Economics 82: 920–933.
Barry, P.J., L.M. Moss, N.L. Sotomayor, and C.L. Escalante. 2000. “Lease Pricing for Farm Real Estate.” Review of Agricultural Economics 22: 2–16.
Barry, P.J., B. Roberts, M. Boehlje, and T. Baker. 1997. “Financing Capacities of Independent Versus Contract Hog Production.” Journal of Agricultural Lending 10: 8–14.
Barry, P.J., and L.J. Robison. 2001. “Agricultural Finance: Credit, Credit Constraints and Consequences.” In B. Gardner and R. Rausser, eds., Handbook of Agricultural Economics. Amsterdam: North-Holland. Forthcoming.
Barry, P.J., L.J. Robison, and G. Nartea. 1996. “Changing Time Attitudes in Intertemporal Analysis.” American Journal of Agricultural Economics 78: 972–981.
Barry, P.J., and D.R. Willmann. 1976. “A Risk Programming Analysis of Forward Contracting With Credit Constraints.” American Journal of Agricultural Economics 58: 62–70.
Berglof, E. 1990. “Capital Structure as a Mechanism of Control: A Comparison of Financial Systems.” In M. Aoki, B. Gustafson, and O. Williamson, eds., The Firm as a Nexus of Treaties. London: Sage Publications
Bester, H. 1985. “Screening Vs. Rationing in Credit Markets With Imperfect Information.” American Economic Review 75: 850–855.
Bjornson, B., and R. Innes. 1992. “Another Look at Returns to Agricultural and NonAgricultural Assets.” American Journal of Agricultural Economics 74: 109–119.
Boehlje, M.D., and D.A. Lins. 1998. “Risks and Risk Management in an Industrialized Agriculture.” Agricultural Finance Review 58: 1–16.
Bosworth, B., A. Carron, and E. Rhyne. 1987. The Economics of Federal Credit Programs. Washington, D.C.: The Brookings Institution.
Brigham, E.F., and L.C. Gapinski. 1991. Financial Management: Theory and Practice ( 6th ed. ). Chicago: Dryden Press.
Caouette, J.B., E.I. Altman, and P. Narayanan. 1998. Managing Credit Risk. New York: John Wiley Sons.
Chavas, J.P., and B. Jones. 1993. “An Analysis of Land Pricing Under Risk.” Review of Agricultural Economics 15: 351–366.
Collins, R.A. 1993. “The Robustness of Single Index Models in Crop Markets: Comment.” Journal of Agricultural and Resource Economics 18: 131–134.
Collins, R.A., and P.J. Barry. 1988a. “Beta-Adjusted Hurdle Rates for Proprietary Firms.” Journal of Economics and Business 40: 139–145.
Collins, R.A., and P.J. Barry. 1988b. “Risk Analysis With Single Index Models: An Application to Farm Planning.” American Journal of Agricultural Economics 68: 152–161.
Collins, R.A., and L.S. Karp. 1993. “Lifetime Leverage Choice for Proprietary Farmers in a Dynamic, Stochastic Environment.” Journal of Agricultural and Resource Economics 18: 225–238.
Economic Research Service, USDA. 2000. “Farm Resource Regions.” Agricultural Information Bulletin No. 760 (September).
Ellinger, P.N., C.L. Escalante, P.J. Barry, and D. Raab. 2000. Financial Characteristics of Illinois Farms. University of Illinois: The Center for Farm and Rural Business Finance.
Gabriel, S.C., and C.B. Baker. 1980. “Concepts of Business and Financial Risk.” American Journal of Agricultural Economics 62: 560–564.
Gale, D., and M. Hellwig. 1985. “Incentive-Compatible Debt Contracts: The One-Period Problem.” Review of Economic Studies 52: 647–663.
Gardner, B.L. 1978. “Farm Policy and Research on Risk Management.” In Market Risks in Agriculture: Concepts, Methods, and Policy Issues, Technical Report No. 78–1, Texas Agricultural Experiment Station, College Station, TX.
Gwinn, A.S., P.J. Barry, and P.N. Ellinger. 1992. “Farm Financial Structure Under Uncertainty: An Application to Grain Farms.” Agricultural Finance Review 52: 43–56.
Hussain, A., and G. Pederson. 1994. “Application of the Single Index Model to Minnesota’s Agriculture.” Journal of the ASFMRA 58: 102–108.
Jensen, F.E., and L.N. Langemeier. 1996. “Optimal Leverage With Risk Aversion: Empirical Evidence.” Agricultural Financial Review 56: 85–97.
Jensen, M.C. 1986. “Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers.” American Economic Review 76: 323–329.
Jensen, M.C., and W. Meckling. 1976. “Theory of the Firm: Managerial Behavior, Agency Costs, and Ownership Structure.” Journal of Finance Economics 3: 305–360.
LaDue, E. 1990. “Moral Hazard in Federal Farm Lending.” American Journal of Agricultural Economics 72: 774–779.
Lajili, K., P.J. Barry, S.T. Sonka, and J.T. Mahoney. 1997. “Farmers’ Preferences for Crop Contracts.” Journal of Agricultural and Resource Economics 22: 264–280.
Lee, W., and C.B. Baker. 1984. “Agricultural Risks and Lender Behavior.” In P.J. Barry, ed., Risk Management in Agriculture. Ames: Iowa State University Press.
Mapp, H., and G. Helmers. 1984. “Methods of Risk Analysis for Farm Firms.” In P.J. Barry, ed., Risk Management in Agriculture. Ames: Iowa State University Press.
Matten, C. 2000. Managing Bank Capital: Capital Allocation and Performance Measurement ( 2nd ed. ). New York: Wiley.
Miller, L.H., and E.L. LaDue. 1989. “Credit Assessment Models for Farm Borrowers: A Logit Analysis.” Agricultural Finance Review 49: 22–36.
Moss, C.B., R.N. Weldon, and R.P. Muraro. 1991. “The Impact of Risk on the Discount Rate for Different Citrus Varieties.” Agribusiness 7: 327–338.
Moss, L.E. 2000. “A Transaction Cost Economics and Property Rights Theory Approach to Farmland Lease Preferences.” Ph.D. thesis, University of Illinois.
Nasr, R., P.J. Barry, and P.N. Ellinger. 1998. “Financial Structure and Efficiency of Grain Farms.” Agricultural Finance Review 58: 33–46.
Pflueger, B.W., and P.J. Barry. 1986. “Crop Insurance and Credit: A Farm Level Simulation Analysis.” Agricultural Finance Review 46: 1–14.
Robison, L.J., and P.J. Barry. 1996. Present Value Models and Investment Analysis. East Lansing: Michigan State University Press.
Saunders, A. 1999. Credit Risk Management. New York: John Wiley Sons.
Sherrick, B., P.J. Barry, and P.N. Ellinger. 2000. “Valuation of Credit Risk in Agricultural Mortgages.” American Journal of Agricultural Economics 82: 71–81.
Sonka, S., B.L. Dixon, and B.L. Jones. 1980. “Impact of Farm Financial Structure on the Credit Reserve of the Farm Business.” American Journal of Agricultural Economics 62: 565–570.
Splett, N., P.J. Barry, B.L. Dixon, and P.N. Ellinger. 1994. “A Joint Experience and Statistical Approach to Credit Scoring.” Agricultural Finance Review 54: 39–135.
Stiglitz, J.E. 1985. “Credit Markets and the Control of Capital.” Journal of Money, Credit, and Banking 17: 133–152.
Stiglitz, J.E., and A. Weiss. 1981. “Credit Rationing in Markets With Imperfect Information.” American Economic Review 71: 393–411.
Tauer, L.W. 2000. “Estimating Risk-Adjusted Interest Rates for Dairy Farms.” Paper presented at the NC-221 Annual Meeting, Federal Reserve Bank of Minneapolis, October 2–3, 2000.
Townsend, J.P., and D.W. Brorsen. 2000. “Cost of Forward Contracting Hard Red Winter Wheat.” Journal of Agricultural and Applied Economics 32: 89–94.
Turvey, C.G. 1991. “Credit Scoring for Agricultural Loans: A Review With Applications.” Agricultural Finance Review 51: 43–54.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2002 Springer Science+Business Media New York
About this chapter
Cite this chapter
Barry, P.J. (2002). Finance and Risk Bearing in Agriculture. In: Just, R.E., Pope, R.D. (eds) A Comprehensive Assessment of the Role of Risk in U.S. Agriculture. Natural Resource Management and Policy, vol 23. Springer, Boston, MA. https://doi.org/10.1007/978-1-4757-3583-3_17
Download citation
DOI: https://doi.org/10.1007/978-1-4757-3583-3_17
Publisher Name: Springer, Boston, MA
Print ISBN: 978-1-4419-4924-0
Online ISBN: 978-1-4757-3583-3
eBook Packages: Springer Book Archive