March 10, 2023 · 1 min read
The current state of the economy has many small farmers experiencing déjà vu from the 1980s. A recession, skyrocketing inflation and environmental issues are straining farmers’ ability to operate and compete across the global marketplace. In addition, many farmers struggle to secure necessary capital.
For banks, assessing agricultural risk has historically been complex due to a lack of standardized farm production information. The good news is that we have reached a new inflection point with modern technology. The many agtech companies that offer specific solutions for data collection and aggregation methods have revolutionized farm risk assessment.
Community banks that have otherwise run manual processes from loan origination to credit risk can harness these new solutions to drive efficiency, increase accuracy and better manage portfolio risk. Agricultural data solutions can help risk-averse banks provide loans to small farmers, meaning they are in a better position to serve their customers than they were 40 years ago.
In this ABA Banking Journal article, Jim O’Brien discusses the impact of the 1980’s on today’s lending environment, and how new tools collect and analyze dozens of farm-specific data points that are traditionally left out of the loan process.
Read the full article here!