ABSTRACT
This chapter discusses the major changes occurring in the agricultural credit markets and in the systems/methods/procedures being used to provide credit to farm and agribusiness borrowers. It explains the dynamics of the markets and the changing role of various participants in those markets, and provides an overview of the opportunities and challenges these changes provide to lenders in their planning and strategic positioning. The chapter discusses the new lending environment for agriculture and the new competitors in the market. It focuses on the customer and market segmentation, the types of agricultural loans, and new delivery alternatives. The chapter reviews other challenges, including sourcing funds, managing risks, reducing costs, pricing loans and developing alliances. Financing farm and agribusiness firms, particularly those in rural communities, will become an increasingly complex business venture for lenders. The agricultural and food production and distribution system will continue to undergo major structural changes during the next decade.
