The W. I. Myers Professorship of Agricultural Finance

This paper reviews the establishment and funding of the W. I. Myers Professorship of Agricultural Finance and the activities and accomplishments of early chair holders. Because considerable time has passed since the formation of the Chair, this record will undoubtedly be incomplete in unknown ways. William I. Myers (1891-1976) was born and reared on a dairy and tobacco farm in Chemung County, New York. He received his Ph. D. from Cornell and was appointed to the faculty in 1918. In 1920 he was the first person ever appointed full professor of agricultural finance. In 1932, during the depth of the depression, Myers was asked by Henry Morgenthau to prepare recommendations for a legislative program to solve the agricultural finance problem. His ideas were approved by president-elect Roosevelt who asked him to come to Washington to assist with development of the Farm Credit Administration. In 1933, Myers was appointed Governor of the Farm Credit Administration, succeeding original Governor Henry Morgenthau, when Morgenthau was appointed Secretary of the Treasury. As Governor of FCA he was the principal architect and top administrator during the revitalization, reorganization and expansion of what beacame the Farm Credit System. In 1938, he returned to Cornell as head of the Department of Agricultural Economics, and he later served as Dean of the College of Agriculture from 1943 to 19592.Agricultural Finance, Teaching/Communication/Extension/Profession,

APPLICATION OF RECURSIVE PARTITIONING TO AGRICULTURAL CREDIT SCORING

Recursive Partitioning Algorithm (RPA) is introduced as a technique for credit scoring analysis, which allows direct incorporation of misclassification costs. This study corroborates nonagricultural credit studies, which indicate that RPA outperforms logistic regression based on within-sample observations. However, validation based on more appropriate out-of-sample observations indicates that logistic regression is superior under some conditions. Incorporation of misclassification costs can influence the creditworthiness decision.finance, credit scoring, misclassification, recursive partitioning algorithm, Agricultural Finance,

THE EFFECT OF INTERSTATE BANKING ON FARM LENDER MARKET SHARES IN NEW YORK STATE

Commercial bank loans to New York farmers are significantly overestimated in the reported USDA statistics due to out-of-state lending and reporting of some agribusiness loans as agricultural loans by New York State banks. Correcting for this distortion lowers the 1978-84 average New York agricultural credit market share held by banks from 36 to 24 percent. As deregulation allows more interstate banking activity, the overestimate of agricultural loan volume in states with money center banks and the corresponding underestimate of loan levels and market shares in nonmoney center states could cause increased distortion of state level farm debt statistics.Agricultural Finance,

INVESTMENT BEHAVIOR AND ENERGY CONSERVATION

Binary logit and bivariate probit models were used to investigate the investment behavior of farmers relative to two energy-conserving assets, heat-recovery systems and precoolers. The bivariate probit procedure was useful in correcting for self-selectivity bias. Holdout samples and cross-validation procedures were used to develop true model statistics. Farm size, educational level of the operator, and the type of milking system in use were the important factors influencing investment behavior.Farm Management,

VARIABLE INTEREST RATES AND THE FINANCIAL PERFORMANCE OF DAIRY FARM BUSINESSES

Resource /Energy Economics and Policy,

CREDIT RISK MIGRATION EXPERIENCED BY AGRICULTURAL LENDERS

Loan records and lender credit risk classifications are used to examine agricultural credit risk migration. The results include estimates of the likelihood of borrowers transitioning among five credit risk tiers. The paper also examines factors that influence or predict credit risk migration and its impact on loan pricing.credit risk, agricultural lending, credit risk migration, credit quality, Agricultural Finance,

Farm savings accounts: Examining income variability, eligibility, and benefits

Government subsidized farm savings accounts have gained attention as possible risk management tools. These accounts encourage farmers to set aside funds in high income years to be drawn upon in low income years. This study considers two potential savings programs, Farm and Ranch Risk Management (FARRM) accounts and Counter-Cyclical (CC) farm savings accounts. FARRM accounts use tax deferral as the primary incentive for participation and under CC accounts the government would match farmer deposits up to $5,000. This report examines the potential benefits of these accounts for New York dairy farmers. The study illustrates how the selection of different income to define eligibility will impact the potential eligibility and benefits received by the accounts. In particular, if measures do not correct for changes in farm size, the value of the accounts to commercial farmers will be greatly reduced. Although participation and benefit estimates vary by the specific net and gross income measures used to define participation and allow withdrawals, the differences were relatively small. The analysis indicates that most commercial dairy farms would be eligible to build substantial balances in the accounts. The use of net income measures as opposed to gross income measures increases the likelihood that farmers will be able to access the funds deposited in the accounts. The next sections of the study describe the construction of the farm data used to analyze the account programs. Then, the analysis of Farm and Ranch Risk Management (FARRM) and Counter-Cyclical (CC) farm savings accounts is presented. The analysis begins by describing the magnitude and degree of variability in measures of net income and gross farm income. Next, the analysis considers the ability of farmers to contribute to FARRM and CC accounts. Finally, the study considers the likelihood that farmers will be able to withdraw funds from the accounts and provides some very basic estimates of the potential benefits associated with FARRM and CC accounts

An Analysis of the investment Related Characteristics of New York Farmers

A.E. Res. 89-1