Farm Loan Research Articles

Agrarian Distress in Indian Agriculture: Causes, Socio-economic Consequences and Coping Strategies

Agrarian distress is the economic, political and social challenges faced by the farmers and rural communities due to factors such as low crop yields, fluctuating prices of agricultural produce, high input costs, indebtedness, and lack of access to credit, markets, and infrastructure. Over 8,00,000 individuals are dies by suicide each year because of various reasons. More over the suicides are happening in the families whose own land is less than 1-2 hectares, who are in debt, have been identified the most at risk for suicide. The present article aims at better understanding of the causes, consequences and possible coping strategies for the agrarian distress in India. Causes such as fluctuations in crop sales, weather and climate conditions, dependent on natural resources, etc. are discussed in detail. Consequences of agrarian stress are suicides of farmers, rural migration, food insecurity, environmental impacts and so on. Solutions such as strengthening the forward markets, comprehensive crop insurance schemes for the framers where the non-MSP (Minimum Support Price) crops also may be covered, assured price to the farmers are discussed. Many researchers argued that farmers suicides are increasing but the research is limited in the specialised area of interest. In addition to that, researchers are focussing only on the socio-economic variables rather than the psychological variables. In order to mitigate the risks out of agrarian distress, farmers should be encouraged by the government and extension service providers to take up the subsidiary occupations and secondary agricultural occupations which helps them in getting profits in the situations where the crop damages due to the extreme weather patterns. As rightly pointed out by National Bank for Agriculture and Rural Development (NABARD), distress of the framers should have a long-term potential solution such as major reforms in the existing agricultural laws rather than farm loan waivers which acts as the short-term relief to the farmers.

Ownership of Cash Value Life Insurance among Rural Households: Utilization of Machine Learning Algorithms to Find Predictors

This study examines the determinants of life insurance ownership with a focus on rural areas and farming households in the United States. Utilizing data from online surveys conducted in 2019 and 2021, this paper explores how psychological factors, financial knowledge, and household characteristics influence life insurance ownership. Traditional indicators like wealth, income, and age were evaluated alongside less frequently discussed variables such as farm loans and rural residency. Machine learning techniques, including neural networks, Support Vector Machine modeling, Gradient Boosting, and logistic regression, were employed to identify the most robust predictors of life insurance demand. The findings reveal that farming-associated factors, particularly holding a farm loan and living in a farming household, significantly predict life insurance ownership. The study also highlights the complexity of life insurance demand, showing that financial education and management practices are critical determinants. This research underscores the need for tailored financial risk management strategies for rural and farming households and contributes to a nuanced understanding of life insurance demand in varying contexts.

Resilience of agricultural banks during economic downturns

PurposeAgricultural banks likely respond differently to economic downturns compared to nonagricultural banks. Limited previous research has examined the performance of agricultural banks under economic crisis and in the presence of banking regulations. This study aims to explore agricultural banks' responses to economic and regulation shocks relative to nonagricultural banks.Design/methodology/approachThis study uses bank-quarter level data from 2002 to 2022 for virtually all commercial banks in the U.S. In this research, the Z-score measures the bank’s default risk, the return on assets measures bank profitability and changes in amount of farm loans indicate the wider impact on the agricultural sector. Effects of the financial crisis, Basel III reforms to banking regulation and the coronavirus (COVID-19) pandemic on these banking measures are assessed using distinct empirical frameworks. The empirical estimations use various subsamples based on bank types, bank sizes and time periods.FindingsEconomic downturns are associated with fluctuations in returns and the risk of default of commercial banks. Agricultural banks appeared to be more resilient to economic downturns than nonagricultural banks. However, Basel III regulated agricultural banks were more likely to fail amidst the pandemic-related economic shocks than the regulated non-agricultural banks.Originality/valueThis study examines the resiliency of agricultural banks during economic downturns and under postfinancial crisis regulation. This is one of the first empirical works to analyze the effectiveness of Basel III regulation across bank types and sizes considering the COVID-19 pandemic. The key finding suggests that banking regulation should consider not only size heterogeneity but also the heterogeneity in lending portfolios.

Differential taxation in agricultural credit market

AbstractThis study examines whether the market competitiveness of farm loan suppliers is affected by the US tax policy for the farm credit system (FCS) and its potential spillover on the farmers' cost of borrowing. We exploit the variation in the corporate income tax rate to estimate its relationship with the farm debt share of the FCS and the potential spillover effect on the estimated cost of borrowing for agricultural loans. Results suggest that a 10% rise in the state (federal) tax rate is associated with an increase in FCS's total farm debt market share by 1.76% (3.76%). A 10% rise in the FCS total farm debt market share tends to increase the cost of borrowing on agricultural loans by 0.06%. Overall, the findings imply that favorable tax treatment could increase FCS' competitiveness in the agricultural lending market. Also, an increase in the interest rate on farm debt is correlated with the increasing market share of FCS in the agricultural credit market. [EconLit Citations: Q14, N22, H2, H7, G21].

Racial disparities in farm loan application processing: Are Black farmers disadvantaged?

AbstractBlack farmers have historically been discriminated against in services from the federal government, including access to credit. Discrimination can take the form of delayed loan processing requests, which can affect timely planting, harvesting, feeding of livestock, and farm performance. This study uses nationwide, farm‐level data from 2009 to 2021 from the Farm Service Agency's direct farm loan program to investigate racial discrimination in the farm loan program. Findings reveal loan processing times average longer for Black borrowers on operating loans, though with a substantial state‐level variation. Specifically, it takes an average of more than two additional days for Black farmers' operating loan applications to be completed and another two additional days to be processed. However, there was no significant difference in time for farm ownership loans suggesting a more nuanced cause than outright racial discrimination. Other factors that increased loan processing time for borrowers included larger loan amounts, more complex loan types, a mix of collateral, and being a new borrower.

Agricultural Credit Utilization and Repayment by Farm Households in Tripura

The study was conducted in West Tripura district of Tripura to examine the utilization and repayment of farm loans obtained by borrowers based on a survey done in 2020.The development of agriculture depends on farmers receiving adequate and timely loans. Purposive multi-stage random sampling was used to pick 120 farmers and 20 lenders for a comprehensive investigation. The majority of the sample beneficiaries availed of crop loans (82.5%) as compared to allied activities loans (17.5%) and it was observed that marginal and small farmers diverted a portion of the loan as compared to medium farmers. The extent of repayment of loans by the medium farmers was higher than the small and marginal farmers. To improve the utilization and repayment pattern of credit by farm households, the Bank Field Officers need to conduct post-credit supervision to reduce credit diversion to unproductive uses and disbursement of the majority of the loan in kind form may be used.

Money, Power, and the People: The American Struggle to Make Banking Democratic by Christopher W. Shaw

Money, Power, and the People asserts that common Americans fed up with the repeated financial panics and economic downturns of the nineteenth and early twentieth centuries fixed the American banking system with New Deal banking reforms like federal-deposit insurance. In the decades of banking stability that followed World War II, however, the people forgot how to conduct “banking politics,” creating a vacuum that allowed bankers to exert “private power in the pursuit of profit without regard to the public welfare” (12). Another wave of crises and runaway-wealth inequality resulted. Occupy Wall Street and other grassroots movements, however, portend an end of the anomalous postwar detente between Americans and their financiers.Shaw, a historian by training, is silent about his methodology, which, so far as can be ascertained, is that of traditional narrative history. The story begins with the Panic of 1907 (Chapter 1) before moving to the Emergency Currency Act of 1908 (Chapter 2), which established the National Monetary Commission and led to the postal savings system and the Pujo investigation (Chapter 3). Next comes the formation of the Federal Reserve System and the Federal Farm Loan System (Chapter 4). The Federal Reserve System committed “the crime of 1920” and necessitated passage of the 1927 McFadden Act to prevent national banks from switching wholesale to state banking charters (Chapter 5). Depression-era debates about wages and depositor fees follow, as do discussions of bank runs and banking crises, the Reconstruction Finance Corporation, and the ideas of Rev. Charles E. Coughlin and Jacob S. Coxey, Sr. (Chapter 6). Shaw follows with a discussion of the New Deal reforms, including state and federal bank holidays and the Emergency Banking Act (Chapter 7), the Banking Act of 1933, including Glass-Steagall (Chapter 8), and the National Housing Act of 1934 and consumer-oriented financial institutions like credit unions (Chapter 9). Then he describes some non-banking New Deal reforms and calls for the nationalization of credit before moving to the Banking Act of 1935 (Chapter 11) and covering the decline (Chapter 12) and fall (Chapter 13) of banking politics in postwar America and recent signs of its resurrection (Epilogue).Citations (but no bibliography) reveal that Shaw used a mix of archival and printed primary and secondary sources to spin his story without citing, much less seriously engaging, financial, macroeconomic, or monetary histories that come to conclusions diametrically opposed to his. Since he collected no new data and makes no claims about discovering new archival material, readers have no objective reason to prefer Shaw’s interpretation over those of others.Objective reasons for rejecting Shaw’s interpretation, however, abound. Foremost is the large literature, ably summarized by Hogan and Johnson, showing that although federal-deposit insurance reduces the likelihood of bank runs, it also proportionally reduces depositor monitoring of the risks that bankers take and thus does nothing to reduce bank failure rates.1 Postwar banking stability (1940s–1960s) was due to America’s economic dominance and interest-rate regulation, not deposit insurance.Similarly, the Public Choice banking literature, best epitomized by the work of Calomiris and Haber, presents farmers, industrial workers, and other populists not as a sacrosanct majority but as special-interest groups with views that were often wrong or self-serving.2 Intentionally or not, Shaw insinuates that populist proposals represented valid policy choices even though contemporaries knew them to be problematical. He lauds North Dakota’s successful state-owned bank, for example, without noting that many other government-run banks, like one established by Peter Norbeck in South Dakota, failed decisively.In short, Money, Power, and the People cannot be recommended as a work of either interdisciplinary or financial history. Its sole value is as a tolerably well-written and researched social history of common people who disliked official U.S. banking and monetary policy in the first half of the twentieth century.

Does use of nontraditional credit increase risk?

PurposeA potential farm policy concern is that if nontraditional (vendor/point-of-sale) financing represents increased risk, it may have an aggregate effect on sector-wide farm financial risk. This analysis examines the use of nontraditional lender credit among borrowers in the US Department of Agriculture (USDA)'s Farm Service Agency (FSA)'s direct farm loan programs.Design/methodology/approachData source included the USDA FSA direct operating loan program for 2011–2020. A Cox proportional hazards model was used to estimate the occurrence of default over seven-year term direct operating loans.FindingsResults indicated that point-of-sale financing has a significant and positive relationship with risk for FSA direct operating loan borrowers. The presence of intermediate point-of-sale financing (mostly from machinery and equipment vendors) is associated with an increased probability of default of 9%, and the presence of such loan balances in the amount of $50,000 or more had a higher probability of default of 21%. Short-term nontraditional financing (for example from fertilizer vendors) was found to be positively related to borrower risk of default as indicated by a 22–25% increase in the likelihood of loan default.Originality/valueThrough FSA Farm Business Plan data, the authors were able to distinguish specific vendors and their loan purpose, which advances the knowledge beyond what is currently available through survey data. Findings indicate a minor increase in borrower risk for those with intermediate-term nontraditional financing. However, borrowers with short-term nontraditional financing and having large balances or greater number of nontraditional loans had increases in risk of default by substantive amounts.

Role of Radio Agricultural Programmes on farmers’ education: A case study of Radio Benue, Makurdi, Benue State.

The study analysed the use of radio programmes on farmers’ education in Benue State. The rationale of the study was to analyse the role of radio in educating farmers using Radio Benue, Makurdi as a case study. The study employed survey as research design, using questionnaire as instrument for data collection. Data were collected from a sample of three hundred and eighty-four respondents through purposive, stratified and simple random sampling technique. Using simple percentages, findings revealed that respondents gained knowledge through listening to the programmes. Farmers (28.4%) gained knowledge of appropriate fertilizer application through the agricultural programmes farming world and Tom Sule (in Tiv) aired by radio, 26.8% of the respondents gained knowledge of agricultural practices, and 25.8% of the farmers gained knowledge on the prevention of post- harvest losses. The study concluded that the radio plays a vital role in creating awareness on agricultural information among farmers. The study recommended amongst others that the government and Non-Governmental Organizations (NGO’s) should endeavour to introduce grants and farm loans to the farmers through agricultural programmes so as to encourage agricultural activities.

Perceived competition in agricultural lending: stylized facts and an agenda for future research

PurposeThis study examines agricultural lending by commercial banks and the competition they face from the Farm Credit System (FCS) and non-traditional lenders, including merchants, dealers and other input suppliers.Design/methodology/approachWe construct a measure of commercial banks' perceived competition with FCS or non-traditional lenders using the individual responses to the Federal Reserve Bank of Chicago's Land Values and Credit Conditions Survey between 1999 and 2019. Through regression analysis of an unbalanced panel of survey responses, we present a number of stylized facts on the relationship between perceived competition and farm loan rate spreads, collateral requirements, loan delinquencies and expected lending volumes.FindingsOur analysis shows that the two sources of competition have very different effects on commercial bank lending terms, loan portfolio riskiness and expected loan volumes. With these results in mind, we offer a number of suggestions for future research.Originality/valueWe leverage the unique characteristics of the Land Values and Credit Conditions Survey to examine the competition with non-traditional lenders that cannot be observed using administrative data.

Analysis of Credit Access, U.S. Agricultural Productivity, and Residual Returns to Resources

AbstractWe examine the relationship credit access has had with the U.S. agricultural productivity and residual returns to resources. Our theoretical analysis suggests that limited credit access can be sufficient to prevent a representative farmer from maximizing both short- and long-run profits. Empirical results show that increased credit access is positively associated with both productivity and residual returns to resources. Our findings imply that one way to stimulate the U.S. agricultural productivity growth is to increase credit access. They also provide strong empirical support for the productivity-stimulating value of programs such as the Farm Service Agency’s Farm Loan Program.

The impact of the China–USA trade war on USA Chapter 12 farm bankruptcies

PurposeThe purpose of this paper is to determine the effects of the 2018–2020 China–US trade war on US farm bankruptcies as filed under Chapter 12. The key task is to identify the economic factors affecting farm bankruptcies generally, and to then control for the trade war impacts including the Market Facilitation Program (MFP), floods, agricultural conditions and the health of agricultural finance leading into the trade war.Design/methodology/approachResults were obtained using ordinary least square regression and panel fixed effect model using bankruptcy rates and number as the dependent variable. Independent variables included market effects, credit conditions, yield variation, trade impacts, 2019 flooding, macroeconomic conditions and regional fixed effects. The authors use cubic splines to interpolate annual and quarterly data to a monthly base.FindingsBased on a fixed effect model, the authors find that all other things being equal the China–USA trade war would have had a significant impact on Chapter 12 farm bankruptcies, increasing the bankruptcy rate by 25.7%. The flooding in 2009 had minor effects of increasing the rate by only 0.05%. The overall impact will, however be substantially lower than the 25.7% because of the MFP. The MFP variables (binary) had mixed effects and its true impact is unknowable at this time; however, the authors also find that a 1% increase in the producer price index decreases bankruptcy rates by 2.62% and farm bankruptcy numbers by 3.70%. Likewise a 1% increase in GDP reduces bankruptcies by 3.25%. These suggest that the MFP program will have likely reduced farm bankruptcies considerably than what would have occurred in their absence. The authors also find that states heavily dependent on trade faced lower market uncertainty. Broader economic factors (net charge-offs of farm loans held by insured commercial banks, US real GDP, the average effective interest rate on nonreal estate farm loans) affect farm bankruptcy.Research limitations/implicationsThe authors use monthly bankruptcy statistics, however not all data were available in monthly measures requiring interpolation using cubic spline functions to approximate monthly changes in some variables. Although the MFP had mixed effects in the model, the mid- to longer-term effects may be more impactful. These longer-term effects (and even shorter-term effects through 2020) are complicated by the coronavirus disease 2019 (COVID-19) pandemic, which will require a different identification strategy than that employed in this paper.Originality/valueThe analysis and results of this paper are, to the authors' knowledge, the first to investigate the impact of the China–US trade war on Chapter 12 farm bankruptcy filings. The use of cubic splines in the interpolation of agricultural data is also a technical innovation.

Credit booms and financial instability in US agriculture

PurposeThis study examines the relationship between economic fluctuations and financial distress in the US agricultural sector, which is associated with a large degree of financial instability.Design/methodology/approachThe authors developed a parsimonious model of economic fluctuations in the US agricultural sector. The authors used statistical filter methods to identify the co-movement in cyclical fluctuations in real, cumulative growth rates in farm real estate values, farm sector debt and leverage.FindingsThe proposed model closely approximated the financial evolution of the US agricultural sector between 1960 and 2018. In addition, the authors proved that the proposed model is an early warning indicator of farm loan delinquencies and farm bankruptcies.Originality/valueThis study exploits recent advances in economic theory and empirical macroeconomic modeling to develop a model that is a robust predictor of financial distress in the agricultural sector. Further, the authors demonstrate that the policy interventions following the 1980s farm financial crisis demonstrate the likely long-run economic response to the policies enacted following the 2008 financial crisis.

Do farm service agency borrowers' double minority labels lead to more unfavorable loan packaging terms?

PurposeThis study adds a new dimension in the study of racial and gender bias in farm lending. Most previous studies analyzed the separate effects of race and gender attributes on loan approval decisions. The analysis focuses on the stipulation of loan terms (loan amount, interest rate and maturity) among approved farm loan applications. The time period analyzed spans from 2004 until 2014 during which the government has undertaken reforms to improve delivery of loan services to its clientele of minority farmers. Thus, this study's findings could help validate the effectivity of such institutional reforms affecting Farm Service Agency (FSA) lending operations.Design/methodology/approachThis study utilizes a national direct loan origination data from the FSA of the U.S. Department of Agriculture (USDA) collected from 2004 to 2014. The analysis begins by identifying significant differences in cross-tabulations of loan terms among different racial and gender classes. Seemingly unrelated regression (SUR) regression techniques are then applied for a system of equations involving the three loan packaging components. The combined effects of the prescribed loan packaging terms are subsequently analyzed under a simulation-optimization framework.FindingsRegression results validate that indeed, relative to White American borrowers, certain minority borrowers are accommodated with lower loan amounts at higher interest rates and with shorter maturities. However, these decisions seem to be prompted by credit risk management considerations. The most compelling findings include the insignificance of all double minority labeling variables, except for the interest rate equation that even produced favorable results for Hispanic American females. Simulation-optimization results further reinforce that even when one or two unfavorable loan terms are included in the packaging, double minority borrowers end up with better profitability and liquidity positions.Practical implicationsThis study provides a different perspective in dealing with the controversial minority bias in lending by presenting evidence gathered from a government farm lending institution. The USDA-FSA has been sued in numerous occasions by minority borrowers. Since then, however, it has deliberately implemented institutional reforms to rectify previous errors. This study provides empirical evidence strengthening FSA's claim of its intention to improve its delivery of loan services, especially for its socially disadvantaged borrowers with double minority classification.Originality/valueThis study pioneers the analysis of the double minority labeling effect on farm lending decisions. Its contributions to literature are further enhanced by its goal to validate the effectiveness of FSA institutional reforms undertaken since the early 2000s in order to improve credit access of and delivery of credit services to minority farm borrowers, especially those that belong to more than one minority classification.

Ready, willing, and able? USDA field staff as climate advisors

Natural resource advisors operate at a natural resource-climate nexus that presents opportunity for utilization of regionally relevant climate science and tools to support climate smart decision making among land managers. This opportunity, however, may be underutilized. In thousands of county offices across the country, USDA field staff with the Natural Resources Conservation Service (NRCS) and Farm Service Agency (FSA) interface with farmers on a daily basis to provide conservation technical assistance, farm loans, and disaster recovery assistance. In this study, we conducted a survey of NRCS field staff (n = 1,893) and a similar survey of FSA field staff (n = 4,621) to determine the following: (1) how concerned USDA field staff are with both general and specific climate and weather threats and their effect on agriculture and forestry, (2) what available climate and weather resources staff are currently using, (3) how these factors relate to USDA field staff9s confidence and interest in playing the role of climate advisor, and (4) the differences that exist between NRCS and FSA field staff related to these research questions. We found that many USDA field staff are concerned about climate change in general and about several specific impacts, but fewer are confident in their ability to support land managers in addressing these impacts. Additionally, increased concern about climate threats was related to higher levels of climate and weather resource use and an increased desire to play the role of climate advisor, but was also related to lower levels of self-reported ability to play that role. These findings can be used to inform appropriate application of professional development opportunities and creation of tools and resources to improve professional uses of weather and climate information.

Loan Waivers and Bank Credit: Reflections on the Evidence and the Way Forward

Executive Summary In the past decade, farm loan waivers have become a policy instrument to alleviate the financial distress of farmers. Despite agreement on the theoretical rationale for such debt forgiveness and its deep contextual relevance, many fear that in the long run, loan waivers might vitiate the repayment culture in the farm sector and undermine the financial status of banks. At present, critiques of large-scale loan waivers rest on limited evidence. This article reviews and synthesizes existing research and available data on the implications of loan waivers, especially for the flow of credit to farmers from banks. On most of the issues, such as farmer well-being and repayment culture, there seems to be mixed evidence on the consequences of debt waivers. Credible evidence on macroeconomic implications is limited, mainly on account of methodological challenges. This article concludes that even if loan waivers are an inappropriate strategy to support farm incomes in sustainable ways, the wide-ranging negative impacts on the formal banking sector are perhaps overstated. A more fruitful approach would be to focus on whether loan waivers can be designed to reduce the possible negative consequences for the formal banking system as well as for macroeconomic system. The article identifies three possible instruments—loan insurance products that will help banks cope with the consequences of large-scale defaults. Second, to explore the creation of a distress fund that will cushion state finances, should there be a need for debt waivers. Third, it would be useful to consider the operation of debt relief commissions to have an ongoing process for debt waivers.

Political Economy of Farm Loan Waivers in India

Political leadership of various states in India is under tremendous pressure to provide instant relief to the farmers reeling under debt trap, resulting in suicides in several cases. Often, suicides by peasants are widely covered in the media which in turn sway the people’s perception about apparent indifference of the government towards the farming communities of the country. This certainly brings in concerns related to political economy revolving around judicious distribution of wealth and national income of the country. State governments of India are generally reluctant to waive off the farm loans as a matter of routine due to concomitant burden on exchequer that might adversely affect their fiscal balances. However, political parties tend to use farm loan waiver as tactics to come to power in spite of the fact that such populist measures are not good for the economy, nor do they offer a long-term solution to the age-old problem of higher degree of incidence of indebtedness among the farming communities. This article explores the antecedents and consequences of farm loan waivers and the way forward. Besides, it also reconnoitres whether the state takes such decisions as farm loan waiver purely on the basis of economics or any hidden political agenda.

Heterogeneity of farm loan packaging term decisions: a finite mixture approach

ABSTRACTThis article revisits the minority borrowers’ discrimination issue in farm lending by departing from traditional loan approval-rejection or default rate-based analytical models to focus on loan packaging decisions. This study analyses such decisions using a Finite Mixture Model that optimally separates the borrowers into two sub-classes allowing for a priori unspecified heterogeneity in borrowers’ data, which has not been accounted for in previous loan discrimination analyses. Results show that non-white farm borrowers tend to receive larger loans among those in the lower loan latent class, but receive relatively lower loans in the larger loans borrower category. These farmers are also charged higher interest rates vis-à-vis their peers in both the low and high interest rate latent classes. This study’s results also indicate that male borrowers are accommodated with larger loans and longer maturities in all loan amount and maturity latent classes. This study validates the interplay among significant trends in loan packaging terms for racial and gender minority borrowers that seems logical from the lenders’ credit risk management perspective.

Economics of Subsidies in a Welfare State: Dynamics of Populist Policies and Farm Profitability

Economic gains from subsidies provided by welfare states have remained contentious in the literature due to their inherent paradoxical consequences in promoting competition, economic growth and equitable distribution in developing economies. State largesse on farm subsidies has increasingly become a populist tool for political gains. The politics involved with subsides have immense emotional appeal than fulfilling the objective of social and economic justice. Despite international consensus of removal of farm subsidies, its magnitude has grown in recent years. In India, the arguments in favour of farm subsidies have gained larger acceptance due to sudden spurts in farmer suicides during last two decades. Since electoral fortunes are hugely dependent on populist policies on subsidies, Minimum Support Prices (MSPs) and farm loan waivers, policymakers have not been able to introduce necessary reforms to make Indian agriculture competitive. The agricultural sector has become excessively dependent on government grants and remained unprofitable for most of the small and marginal farmers. The results of this study find that subsidies are poorly correlated with cost of cultivation and farm profitability with collateral interactions with other sectors of Indian economy.

A History of Mortgage Banking in the West: Financing America’s Dreams by E. Michael Rosser and Diane M. Sanders

Reviewed by: A History of Mortgage Banking in the West: Financing America’s Dreams by E. Michael Rosser and Diane M. Sanders Lincoln Bramwell A History of Mortgage Banking in the West: Financing America’s Dreams. By E. Michael Rosser and Diane M. Sanders. Boulder: University Press of Colorado, 2017. ix + 372 pp. Illustrations, bibliography, suggested readings, index. $35.00 cloth. A book titled A History of Mortgage Banking in the West sounds pretty easy to categorize and market: label it under economic history and call it good. However, this collaborative book by Michael Rosser and Diane Sanders is really a combination of multiple genres. Equal parts economic history, memoir, and geographic history, the book covers the creation and evolution of the mortgage banking industry through the eyes of Rosser, a third-generation mortgage-lending professional whose family ties stretch from Kansas to Colorado. It is here that the industry gets its start in the agricultural communities that blanketed the western Great Plains following the Civil War. The book’s narrative [End Page 219] weaves through the places, companies, and developments that Rosser knows best. Rosser is a deeply experienced insider who methodically explains the evolution of the mortgage industry and, with his coauthor, places it in a historical context. Much like the banking industry itself, Rosser views the history of the West from Euro-American settlement to the 2007 mortgage crisis through the lens of capital. While providing personal examples of home buying and business development, the narrative’s real thrust is an impersonal, clinical calculation of large capital moving across and shaping the landscape. The authors trace the beginning of the modern mortgage-lending industry to the financial needs of farmers that moved into the Plains states following the Civil War. The 1864 National Banking Act severely limited national banks’ investments in real estate, which translated into farmers paying higher land and home finance rates to regional and specialty banks willing to lend for real estate. Rectifying this disparity became a platform of the People’s Party in the 1890s and worked itself into later federal policy when the Federal Farm Loan Act of 1916 created the first government-sponsored enterprise—a privately owned entity backed by the federal government that had a social purpose, in this case “to expand the availability of credit and favorable conditions to underserved groups” (152). This 1916 act produced the first in a series of government-sponsored enterprises that include today’s familiar home mortgage giants, Fannie Mae and Freddie Mac. The book ends with a postmortem of the 2007 mortgage crisis and a look toward the future. Rosser breaks with consensus on the crashes’ causes by casting equal blame on Freddie Mac and Fannie Mae, whom he believes acted irresponsibly by focusing on increasing shareholder profits and senior management compensation and ended up overextended and in need of a bailout from the federal government. Readers of this journal will be most interested in the book’s ability to connect the Great Plains’ centrality to the mortgage industry and its impact on the nation’s transition from subsistence to commercial agriculture. Lincoln Bramwell USDA Forest Service Rocky Mountain Research Station Copyright © 2019 Center for Great Plains Studies, University of Nebraska–Lincoln