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Pfluegr
and Barry
/ Crop
Insurance and Credit: A Farm Level Simulation Analysis
Jones
and Barry / Impacts
of Production Credit Associations on Future Loan Rates for Borrowers
Barry
/ Financial
Stress for the Farm Credit Banks: Impacts on Future Loan Rates for Borrowers
Harris,
Herr, and Njinkeu / Evaluation
of Alternative Models for the Federal Intermediate Credit Bank of St.
Louis
Fiske
/ A
Comparative Analysis of the Return to Equity and Weighted Average Cost
of Capital Approaches to Capital Budgeting
Saunders
and Bailey /
Effects of Monetary Changes on the Price Level and Output in the U.S.
Agricultural Sector
Hanson
and Eidman / Evidence
of the Stability of Income Tax Expenditures to Farmers
Abstracts
Pfluegr
and Barry
/ Crop
Insurance and Credit: A Farm Level Simulation Analysis
<top>
A combination
of survey and simulation procedures measured how a sample of nonreal
estate lenders in Illinois responded to a farmer's use of crop insurance
and evaluated the effects of the responses on farm financial performance. Survey results indicated a positive credit response by about 60 percent
of the lenders, and little change in interest rates on loan maturities. The simulation results for a highly leveraged farm indicated that crop
insurance and the credit response improve farm survival and liquidity,
although additional borrowing occurs at relatively high interest costs.
Jones
and Barry / Impacts
of Production Credit Associations on Future Loan Rates for Borrowers
<top>
Production
Credit Associations (PCAs) are farmer-owned cooperatives that are intended
to enhance in part the economic well-being of American farmers and ranchers
by decreasing and stabilizing the cost of credit services. Measuring
the financing costs of PCA borrowers is complex because borrowers are
investors in and patrons of the PCA. Thus, borrowers' financing
costs should be the net of returns the borrowers receive as investors. This study expresses the actual PCS borrower's costs in terms of the
interest rate the equates to zero the net present value of the cash
flow associated with a PCA loan.
Barry
/ Financial
Stress for the Farm Credit Banks: Impacts on Future Loan Rates for Borrowers
<top>
A loan-pricing
model is used to estimate the effects of financial stress on borrowing
costs from the Farm Credit Banks during an adjustment period in which
the banks restore their capital structure and repay any federal assistance. The magnitude and the duration of higher borrowing costs depend on the
level of loan loss, leverage targets, the adjustment period, earnings
on reserves, public subsidies, and other environmental changes. For example, an adjustment period of at least ten years would keep the
increment to loan rates under 1.5 percent for losses up to about $4
billion.
Harris,
Herr, and Njinkeu / Evaluation
of Alternative Models for the Federal Intermediate Credit Bank of St.
Louis <top>
The performance
of two single-equation econometric models, a univariate Box-Jenkins
model, and two composite models for forecasting Sixth District Federal
Intermediate Credit Bank (Bank) monthly loan volume outstanding are
compared with an averaging model now in use by the Bank. Senior Banks officers desire both accurate point forecasts and turning
point identification. Results suggest that for predictive accuracy
the monthly dummy variable econometric model or either composite model
are preferred to the averaging model used by the Bank. When turning
point predictions are the primary objective, the averaging model performs
best.
Fiske
/ A
Comparative Analysis of the Return to Equity and Weighted Average Cost
of Capital Approaches to Capital Budgeting <top>
Two widely
used variations on the net present vale formula- the weighted average
cost of capital approach and the return to equity approach- are reconciled
for both the single period and the multiperiod case. In both cases,
the differences in net present values emerging from the two approaches
can be attributed to alternative assumptions about the value and incidence
of the debt capacity.
Saunders
and Bailey /
Effects of Monetary Changes on the Price Level and Output in the
U.S. Agricultural Sector <top>
The U.S.
agricultural sector is often subjected to external shocks such as changes
in the money supply. A change in the money supply may have and
important impact on agricultural output prices. This study empirically
investigates two issues: the question of causality in the money-income
relationship (as applicable to the agricultural sector) and the effects
of monetary changes on the two components of nominal farm product (prices
and real farm product). The study fins that the impact of monetary
changes operates primarily through price level changes at both the retail
and the farm level.
Hanson
and Eidman / Evidence
of the Stability of Income Tax Expenditures to Farmers <top>
Estimates
of tax expenditures (savings on tax liabilities due to use of tax preferences,
credits and deductions) were estimated for a sample of southern Minnesota
farms. Tax savings remained at approximately the same real levels
in 1979-82 as in the growth period of the early and mid-1970s. Tax expenditures averages $5,971 (1972 dollars) for the sample and ranges
from $2,551 on small farms to $9,500 on large farms. A larger
proportion of the tax savings resulted from interest-related deductions
in 1979-82 relative to investment-related depreciation and investment
credits. Incomes declined in real terms and effective tax rates
increased in the later period. The level of unused credits and
deductions nearly doubled, reflecting economic difficulties in the early
1980s.
Send
questions and comments to Faye Butts: fsb1@cornell.edu
This
page was last modified on:
04/06/04
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