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Long Term Impact of the Farm Financial Analysis Training Curriculum on FSA Borrowers in Pennsylvania

Kenneth Balliet

Summary

Structured finance and production management borrower training was an explicit mandate in the 1990 Farm Bill (The Food, Agriculture, Conservation, and Trade Act of 1990). Since 1993 Penn State Cooperative Extension has been meeting the finance training needs of farmers using the Farm Financial Analysis Training (FFAT) curriculum materials. The FFAT course covers fundamental skills and concepts in liquidity, profitability, solvency and efficiency using basic financial statements. The FFAT curriculum uses a combination of short explanations, examples, exercises, quizzes, and own-farm homework to present and demonstrate the use and applicability of these important concepts. The goal of this research was to identify and measure the impacts of FFAT training on participants. Specifically: 1) quantify perceived gains in knowledge, 2) measure changes in management behavior, 3) measure change in specific farm assets and profitability, and 4) assess changes in attitudes regarding farm finance and lending. This research project surveyed participants of FFAT one to five years after taking the finance training. Two hundred and thirty-three (233) participants were sent a numerically-coded survey in September of 2006. Of the initial mailing, sixty-nine (30%) completed surveys were returned. Farm financial training(FFAT) is demonstrated to provide new and at-risk producers with cost effective educational materials that will: significantly increase their knowledge about financial statements, increase their use of financial management tools, improve their comfort and even attitudes when dealing with agricultural lenders, and increase farm profit and net worth.

Details

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