Farm-level Capital: Capital positions, structures, the dynamics of farm-level investments, capital accumulation and leverage positions
Farm-level Capital: Capital positions, structures, the dynamics of farm-level investments, capital accumulation and leverage positions

Author(s): Anna-Maija Heikkilä, Kyösti Pietola, Sami Myyrä
Subject(s): Politics / Political Sciences, Politics, Economy, Agriculture, Economic policy, Financial Markets
Published by: CEPS Centre for European Policy Studies
Keywords: Farm-Level capital; capital positions; farm-level investments; capital structures; agricultural market;
Summary/Abstract: This paper aims to describe and highlight the key issues of farm capital structures, the dynamics of investments and accumulation of farm capital, and the financial leverage and borrowing rates on farms in selected European countries. Data collected from the Farm Account Data Network (FADN) suggest that the European farming sector uses quite different farm business strategies, capabilities to generate capital revenues, and segmented agricultural loan market regimes. Such diverse business strategies have substantial, and perhaps more substantial than expected, implications for the financial leverage and performance of farms. As an illustration, the financial risks clearly increased in the Danish agricultural sector with loan rates following an upward sloping trend in 2006; the first sign of the forth coming financial crisis that may also severely hit highly leveraged agricultural firms.

• Details
• Contents