Annual Meeting of the American Agricultural & Applied Economics Association (AAEA)

Declining interest payments and low financial leverage have insulated most farms in the crisis regions from excessive risk exposure. This was one of the messages of a talk Martin Petrick, deputy head of the department 'External Environment for Agriculture and Policy Analysis’ of IAMO, gave during the Annual Meeting of the American Agricultural & Applied Economics Association (AAEA) in Seattle/USA on 13 August 2012. The talk was based on findings of the FP7 project “Factor Markets" and formed part of an Organised Symposium 'The European Economic and Financial Crisis and its Impact on Agriculture in the United States, the European Union, and the Nations of the Former Soviet Union’. Petrick argued that the financial crisis so far had little impact on agricultural production in the EU. Single exceptions are cases like Denmark where high leverage in the past has now led to credit constraints in agriculture. Institutional weaknesses in banking slow down structural change and inhibit further modernisation of the sector. Future institutional reforms thus should not bypass agricultural banking. Furthermore, it is likely that the crisis will curb public spending on rural development, thus further dampening the competitiveness of agriculture. The Symposium was organised by Evert Van der Sluis, Professor of Economics, South Dakota State University.