Grain Receipts as Collateral for Agribusiness' Financing

Jalisco s corn producers from the Cienega province
are locked in a cycle of low profitability. The corn
producers have been affected by the lack of access
to adequate financial intermediaries such as banks.
The cycle of low profitability contributes towards a
low quality of life and a lack of competitiveness.
Hence, farmers have not been able to adjust to the
fierce competition from the US producers. A lack of
trustworthy collateral is a major problem in order
to get access to credits. The grain receipts system
(GRS) provides a method of collateralizing crops for
access to credits. With the GRS the risk is not
intended to be eliminated; instead it is a mechanism
where the risk is shared between the corn producers,
elevators and banks which are the subject of
analysis in this study using the agency theory.

Autorentext

Ivan Garcia, holds a B.A. in Agribusiness from the "Tecnológico de Monterrey", Monterrey, Mexico (ITESM) and a MSc In Business Administration from the University of Agricultural Sciences in Uppsala, Sweden. He has also attended the University of Manchester Institute of Science and Technology, UK and New Mexico State University, USA.

Klappentext

Jalisco's corn producers from the Cienega province are locked in a cycle of low profitability. The corn producers have been affected by the lack of access to adequate financial intermediaries such as banks. The cycle of low profitability contributes towards a low quality of life and a lack of competitiveness. Hence, farmers have not been able to adjust to the fierce competition from the US producers. A lack of trustworthy collateral is a major problem in order to get access to credits. The grain receipts system (GRS) provides a method of collateralizing crops for access to credits. With the GRS the risk is not intended to be eliminated; instead it is a mechanism where the risk is shared between the corn producers, elevators and banks which are the subject of analysis in this study using the agency theory.