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Thesis (M.A.)—University of Nebraska—Lincoln, 1958. Department of Agricultural Economics.


Copyright 1958, the author. Used by permission.


Low and highly variable incomes prevail in the area known as the West Loess Hills and Canyons of Central Nebraska. The geographic location of the area includes five counties: Custer, Greeley, Howard, Sherman, and Valley; as well as parts of four other counties: Boone and Nance on the east and Buffalo and Dawson on the south.

The supply of capital is an important variable which affects the level of income and financial success realized by farmers. Sources of capital available to farmers include family assistance, savings, renting, and borrowing. Specifically, this study was concerned with the granting and use of borrowed funds, a major source of the capital supply of the farm firm.

Within the general field of agricultural finance, one credit institution, the Farmer’s Home Administration, has as its stated objective the serving of the needs of low-income farmers. Commercial banks, Production Credit Associations, the Federal Land Bank, and insurance companies base their lending policies largely on a borrower’s net worth.

Borrowers of the Farmer’s Home Administration were selected for this study for three reasons: (1) Loans are granted only to farmers who are unable to obtain credit elsewhere. (2) The Farmer’s Home Administration is a supervised credit institution. The FHA substitutes supervision of the borrower for collateral. (3) Records kept by the Farmer’s Home Administration on each borrower were relatively complete, reliable, and readily available to the study.

The objectives of this study are listed as follows:

(1) To analyze the effect of various characteristics of the farm firm on certain measures of financial success.

(2) To examine the financial success of farmers who have obtained borrowed funds under the principle of supervised credit.

(3) To indicate suggestions in regard to the granting of borrowed funds to farmers within the study area.

Permission was granted by the State Director of the Farmer’s Home Administration to visit the various county offices serving the area. Data was recorded on a schedule from the records kept by the Farmer’s Home Administration on each individual borrower.

Advisor: Loyd K. Fischer