Dr. John S. Toll (center), president of the University of Maryland, stands with latest
group of agricultural leaders in the Old Line State to whom he has presented the
university’s Certificate of Merit Award in Agriculture. Recipients are (left to right):
Wallace D. Miller of Chestertown (Kent County); Carville M. Akehurst of Perry Hall
(Baltimore County); Dr. Albin O. Kuhn of Woodbine (Carroll County), and William I. Guy
of Salisbury (Wicomico County). Presentation was made Nov. 4 during the twentieth
annual Maryland Agricultural Leaders Forum on the College Park campus. The annual
recognition now has been bestowed on 254 men and women during its 70-year
existence.
Researchers study how
farm credit is established
COLLEGE PARK,' MD. - The
“Three R’s of credit” - risk
bearing capacity, returns, and
repayment capacity are often
considered the foundation for
securing agricultural credit. But
research suggests that a farm
producer’s experience, character,
and integrity are more important
in obtaining a loan.
In a study done by Stover, Teas,
and Gardner (American Journal of
Agricultural Economics, August,
1985), loan officers were given
hypothetical loan situations and
asked to sort them by preference
based on several attributes.
When the attributes were ranked
using a mathematical model,
management variables such as
ability, character, and honesty
appeared to be most important to
these lenders. Repayment
capacity, risk bearing ability, and
loan purpose were ranked second,
third, and fourth. Other attributes
included were the interest yield of
the loan agricultural market
conditions.
One other insight gained by this
study is that loan officers appear to
place a greater emphasis on the
negative effect of any one
characteristic which means that
the strengths of the farm business
may be overshadowed by one
noticeable weakness.
John Crowgey, Vice President-
Farm Credit Banks of Baltimore,
supports the findings of this study.
Mr. Crowgey strongly emphasizes
the importance of integrity and
honesty in evaluating a loan ap
plicant. He indicates that he would
not work with a dishonest person
regardless of the strength of the
farm business, but that he might
work with a person experiencing
business problems provided that
person is trustworthy.
Mr. Crowgey also confirmed the
importance of management
ability. He indicates that shrewd
management exhibited by a young
farmer just starting may offset a
weak balance sheet.
Finally, Mr. Crowgey em
phasized the importance of a sound
economic foundation in a farm
business and not one that is based
on fluctuating agricultural trends.
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