Purpose – This paper illustrates that natural disasters can significantly threaten financial institutions serving the poor. The authors test the case of a microfinance institution (MFI) in Northern Peru, where severe El Niño events create catastrophic flooding. Design/methodology/approach –...

Purpose – For many farm families and operators across the OECD countries, off‐farm income has become a major determinant of their well‐being. The purpose of this paper is to investigate the potential role of off‐farm employment as a risk management tool among farm operators....

Purpose – US decoupled direct payments, paid to farm operators based on historic yields and base acreage under the 2002 Farm Bill, may alter a farmer's access to credit or his ability to meet debt servicing obligations. More specifically, direct payments might improve the farmer's liquidity...

Purpose – The purpose of this research is to evaluate the financial performance measures calculated and reported by the Economic Resource Service (ERS) from Agricultural Resource Management Survey (ARMS) data. The evaluation includes the calculation method and the underlying assumptions used...

Purpose – Agribusinesses represent a fundamental link in connecting farmers with retailers and consumers, yet little research has been done to examine the historical financial performance of these food processing firms. This paper aims to address this issue. Design/methodology/approach – The...

This study analyzes the personal and farm characteristics that influence the use of farm credit, the degree of indebtedness, and debt consolidation for U.S. farms. Whereas previous studies have examined the supply side of agricultural credit using lender‐based data, this study considers the...

The first theme addressed in this paper is agricultural asset performance. The low rate of return on agricultural assets has been of particular interest to policy makers. From a market portfolio perspective, several studies have analyzed the relationship between farm asset returns and systematic...

This paper examines the contract design problem of microfinance institutions seeking to maximize outreach to the poor while remaining financially sustainable. A dynamic model of group lending is developed that shows how optimal interest rates depend on information regarding moral hazard and...

This study examines credit score migration rates of farm businesses, testing whether migration probabilities differ across business cycles. Results suggest that agricultural credit ratings are more likely to improve during expansions and deteriorate during recessions. The analysis also tests...

Economic theory implies that firms in a competitive market will adjust to long‐run equilibrium levels of profitability, resulting in mean reversion of profitability. Partial adjustment models are applied to farm‐level data from Illinois to test for mean reversion and autocorrelation in...