Ad hoc government payments impact on non-real estate farm debt

Purpose: The authors examined the impact of the Market Facilitation Program (MFP) and Coronavirus Food Assistance Program (CFAP) payments to United States agricultural producers on non-real estate agricultural loans. Design/methodology/approach: The authors used quarterly, state-level commercial bank data from 2016–2020 to estimate dynamic panel models. Findings: The authors found MFP and CFAP payments not associated with the percentage of non-real estate agricultural loans with payments over 90 days late. However, these payments associated with the percentage of non-real estate agricultural loans with payments between 30 and 89 days late. The available data utilized cannot consider when producers received the actual payment and what they specifically did with those funds. Originality/value: The contribution of this study is for US policymakers and agricultural lenders. The findings could be helpful in designing and implementing future ad hoc payment programs and provide an understanding of potential shortcomings of the current safety net for agricultural producers in the Farm Bill. Additionally, findings can assist agricultural lenders in predicting the impact of ad hoc payments on their distressed loan portfolios. © 2022, Charles Martinez, Christopher N. Boyer, Tun-Hsiang Yu, S. Aaron Smith and Adam Rabinowitz.

Ad hoc government payments impact on non-real estate farm debt

Purpose>The authors examined the impact of the Market Facilitation Program (MFP) and Coronavirus Food Assistance Program (CFAP) payments to United States agricultural producers on non-real estate agricultural loans.Design/methodology/approach>The authors used quarterly, state-level commercial bank data from 2016–2020 to estimate dynamic panel models.Findings>The authors found MFP and CFAP payments not associated with the percentage of non-real estate agricultural loans with payments over 90 days late. However, these payments associated with the percentage of non-real estate agricultural loans with payments between 30 and 89 days late. The available data utilized cannot consider when producers received the actual payment and what they specifically did with those funds.Originality/value>The contribution of this study is for US policymakers and agricultural lenders. The findings could be helpful in designing and implementing future ad hoc payment programs and provide an understanding of potential shortcomings of the current safety net for agricultural producers in the Farm Bill. Additionally, findings can assist agricultural lenders in predicting the impact of ad hoc payments on their distressed loan portfolios.

COVID-19 and perceived effects on agricultural financing in Africa: Evidence and policy implications.

This study examines the potential effect of COVID-19 on agricultural financing by drawing lessons from past global crises and their link to agricultural financing. With significant impact in multiple sectors, COVID-19 has caused significant liquidity shortage in the banking and financial institutions sectors that led to widespread business failure. Analysis at the macro, sectoral, and farmer levels confirms the decline in the financing allotted to the agricultural sector in Africa, which could exacerbate the existing structural gap in agricultural financing. Many policy responses and stimulus packages designed to address the negative effects of the crisis are found not to be enough. At the farmer level, findings indicate that many farmers are finding it more difficult to access credit than before the COVID-19 crisis. For individual governments, a better understanding of the magnitude of the agricultural sector financing and investment needs to propose appropriate complementary responses is lacking. We suggest that, in the face of such a crisis, while in the short term the agricultural sector needs emergency funding, in the medium and long term, greater financial support is required, including long-term resources at concessional rates, guarantee funds, and more suitable insurance products combined with social safety nets.

Ad hoc government payments impact on non-real estate farm debt

Purpose The authors examined the impact of the Market Facilitation Program (MFP) and Coronavirus Food Assistance Program (CFAP) payments to United States agricultural producers on non-real estate agricultural loans. Design/methodology/approach The authors used quarterly, state-level commercial bank data from 2016-2020 to estimate dynamic panel models. Findings The authors found MFP and CFAP payments not associated with the percentage of non-real estate agricultural loans with payments over 90 days late. However, these payments associated with the percentage of non-real estate agricultural loans with payments between 30 and 89 days late. The available data utilized cannot consider when producers received the actual payment and what they specifically did with those funds. Originality/value The contribution of this study is for US policymakers and agricultural lenders. The findings could be helpful in designing and implementing future ad hoc payment programs and provide an understanding of potential shortcomings of the current safety net for agricultural producers in the Farm Bill. Additionally, findings can assist agricultural lenders in predicting the impact of ad hoc payments on their distressed loan portfolios.