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Financing of Niche Agricultural Producers
The purpose of the project was to analyze issues related to the
access to capital by owners of small niche agriculture producers in
Iowa. This project conducted two surveys. The first survey was sent
to 138 potential funding agencies of niche agricultural producers in
Iowa. A total of 56 questionnaires were returned, providing a
response rate of 40 percent. The purpose of this survey was to
identify niches served by the specific providers of capital, funding
criteria, and technical assistance provided. The second survey was
sent to 693 niche market agricultural producers in Iowa. A total of
169 questionnaires were returned, providing a response rate of
24.percent. The questionnaire asked questions about sources of
capital, funding agencies, and technical assistance.
Results of the first survey indicated: 1) the highest recommended
methods to increase flow of capital were more technical assistance,
government involvement, and capital. 2) Insufficient collateral was
the most common reason for rejecting funding requests. 3) Most
agencies do not offer technical assistance. 4) The mean number of
investments during the past three years made by funding agencies was
<2.0. Results of the second survey indicated: 1) Most producers were
unfamiliar with potential sources of capital. 2) Community banks
were the most common source of technical assistance. Other agencies
were not often used. 3) Savings, friends/family, and community banks
were the most common sources of financing. 4) Seasonal needs and
equipment financing were the most common reasons for acquiring
capital. Overall, the findings suggest a disjointed relationship
between potential funders and niche producers. Better flow of
information could improve the flow of capital. Improved and more
widely available technical assistance could help overcome
difficulties in access to capital.
Contact:
Howard Van Auken
College of Business, Department of Finance
Gerdin 363
Iowa State University
Ames, IA 50011
vanauken@iastate.edu
515-294-2478 |