Working Paper

Perceived Competition in Agricultural Lending: Stylized Facts and an Agenda for Future Research

Abstract: This study examines agricultural lending by commercial banks and the competition they face from the Farm Credit System and non-traditional lenders, including merchants, dealers, and other input suppliers. We construct a measure of commercial banks’ perceived competition with FCS or non-traditional lenders using the individual responses to the Federal Reserve Bank of Chicago's Land Values and Credit Conditions Survey between 1999 and 2019. Our analysis shows that the two sources of competition have very different effects on commercial bank lending terms, loan portfolio riskiness, and expected loan volumes. With these results in mind, we offer a number of suggestions for future research.

Keywords: competition; agricultural lending; non-traditional lenders;

JEL Classification: G21; Q14;

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Bibliographic Information

Provider: Federal Reserve Bank of Chicago

Part of Series: Working Paper Series

Publication Date: 2021-10-01

Number: WP-2021-16