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Acquisition of Institutional Capital by Niche Agricultural Producers

Abstract This study examines the relationship between niche agricultural producers’ information about and acquisition of capital from government or private agencies. Communities and governments need policies that facilitate the flow of capital, especially during periods of economic weakness. Niche agricultural producers may be skilled in production but weak in terms of developing successful financial acquisition strategies, which limits their access to capital. Using survey data from a sample 169 niche agricultural producers in the USA, we find that a positive relationship exists between niche agricultural producers’ familiarity with and acquisition of capital from government or private agencies, as does an association between capital acquisition and the receipt of advice from agencies. However, in contrast with the conventional wisdom, local commercial banks do not represent information hubs for securing funding or providing technical assistance. This study suggests that producers must fully explore information about government and private agencies instead of relying only on familiar capital sources. Providers of institutional capital also should attempt to provide better information and market their programs to niche agricultural producers. Finally, program managers should reevaluate methods for disseminating information to increase their programs’ visibility, such as through cooperation with local commercial banks.