AGRICULTURAL CREDIT

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AGRICULTURAL CREDIT

• Original PowerPoint Created by
• Jonathon Pike
• Copied from Cal Poly
• Modified by Georgia Agriculture Education
  Curriculum Office
• June 202

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Capital Resources

• Intermediate goods used to produce other goods
  which typically generate income over extended
  periods of time

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Examples of Agricultural Capital

• Buildings
• Equipment
• Houses
• Livestock
• Fuel

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Credit is Capital

• CapitalLaborManagementProfits

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Most businesses are interested in expanding. Two
ways to increase the size of a business are
toa. Physically increase by purchasing or
renting more propertyb. increase the efficiency
and productive capacity of existing business
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Productive Credit is used to increase production
or income.

• Purchase Land
• Livestock
• Equipment
• Seed
• Feed
• Fuel

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Consumption Credit is use to purchase consumable
items used by the family and does not contribute
to the business income

• Food
• Clothing
• Household goods

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Sources of Credit

• Short Term Credit
• Intermediate Credit
• Long Term Credit

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Short Term

• Trade Creditors - Major Equipment Manf.
• 1) Merchants supply -for production
• 2) Equipment Dealers provide financing for
  purchase
• Short Term Continued

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Short Term Continued

• Contract Farming
• -dealer supplies all materials
• -farmer paid flat fee
• -risk is small, farmer still gets
• Commercial Banks
• Production Credit Association (PCA)

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Long Term Credit

• Federal Land Bank
• Life Insurance Companies
• Commercial Banks
• Individual Relatives

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Intermediate Term Credit

• Through PCA
• Through Farmers Home Administration
• Life Insurance Companies
• Commercial Banks
• Individual Relatives

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Collateral or Security

• -Long Term Loans covered by a mortgage
• -Intermediate Short Term covered by assets as
  collateral