Nixon and Richardson / The Economic Recovery Tax Act of 1981: Consequences for Farm Operators

Harris and Baker / Financing East-central Illinois Farmers Who Hedge

Lamm / Investment in Agriculture: An Empirical Analysis

Sundell and Teigen / A Reduced Form Model for PCA Interest Rates

Dahl, Dobson, and Veium / Mandatory Equity Retirement Plans and Cooperative Strength

Jones and Mazzocco / Agricultural Record Systems and the Information Needs of Farmers and Lenders

Abstracts

Nixon and Richardson / The Economic Recovery Tax Act of 1981: Consequences for Farm Operators <top>

The passage of the Economic Recovery Tax Act of 1981 will enable most continuing farm operators to realize a significant reduction in their income tax liabilities. FLIPSIM II was utilized to simulate a typical farm in the Texas Southern High Plains with a resulting tax savings of $20,000 over a 10-year planning horizon.

Harris and Baker / Financing East-central Illinois Farmers Who Hedge <top>

Survey responses of lenders in east-central Illinois suggest that lender policy toward financing of initial and maintenance margin funding may discourage a farmers who needs margin fund financing in order to hedge. The wide range of policy preference reported by lenders regarding hedge financing seems to signal that potential crop hedgers seeking hedge financing would do well to search for a lender with the hedging policies that best suit their particular needs. Certain differences in responses by type of lender (banks versus Production Credit Associations) are statistically significant.

Lamm / Investment in Agriculture: An Empirical Analysis <top>

This paper applies generally accepted macroeconomic investment theories to explain aggregate agricultural investment behavior. Empirical results indicate that changes in agricultural output, farm-level prices, and the cost of capital have statistically significant effects on the real farm investment. A Bischoff-type investment function id found to fit the data best. The findings show specifically that a 1-percent increase in output or farm prices causes a $.11 billion to $.24 billion increase in real agricultural investment, while increases in the cost of capital have a substantial negative effect on investment. Implications are that investment will likely be more unstable in the future.

Sundell and Teigen / A Reduced Form Model for PCA Interest Rates <top>

This paper derives a simple unrestricted reduced form model for Production Credit Associations interest rates, primarily for prediction purposes, that can be easily integrated in to macroeconomic and agricultural econometric models. The performance of the basic model is compared with tow more complicated variants of the basic model on both an in-sample and out-of-sample basis. The results indicates that although the more complicated variants performed better on an in-sample basis, the basic model had a superior out-of-sample forecasts.

Dahl, Dobson, and Veium / Mandatory Equity Retirement Plans and Cooperative Strength <top>

America's agricultural cooperatives are experiencing pressures from members and legislation to lessen financial sacrifices of members and retire equity capital members who die, retire, or leave the cooperative's service area. Proposals have been raised as the feasibility of cooperatives adopting mandatory equity retirement practices to remedy various management problems. Results of a study conducted in Wisconsin, however, suggest that mandatory equity retirement plans would severely reduce solvency and financial strength for most cooperatives included in the study.

Jones and Mazzocco / Agricultural Record Systems and the Information Needs of Farmers and Lenders <top>

Agricultural accounting is a major source of data for evaluating the economic performance of farm units and the agricultural sector as a whole. As interested data users adjust the scope of their analyses, their data needs change. These changes are in turn translated into adjustments into the accounting systems which gather relevant information. This report uses three surveys to identify how users of accounting systems have influences the structure of those systems. The survey results indicate probable directions agricultural accounting will follow given the unsatisfied needs of report users.

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