Friday, October 21, 2011

Delinquency Rates on Agricultural Loans are the Lowest of All Loan Types

Above: Given the wide range of commercial banks lending to agriculture, some banking institutions are quite vulnerable to a downturn in the agricultural economy.

Losses in consumer, real estate, construction, and development loans have weakened the financial positions of a number of rural and urban banks.

However, delinquency rates on agricultural loans at commercial banks are the lowest across other major loan types and substantially lower than the financial crisis of the 1980s.

source: A Symposium for Recognizing Risk in Global Agriculture; Federal Reserve Bank of Kansas City; July 19-20, 2011 [pdf]