Limits to capital: Assessing the role of race on the Paycheck Protection Program for African American farmers in America

Sant’Anna, Ana Cláudia; Kim, Kevin N.; Demko, Iryna

doi:10.1002/aepp.13338

Applied Eco Perspectives Pol

2023

DOI: 10.1002/aepp.13338

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Limits to capital: Assessing the role of race on the Paycheck Protection Program for African American farmers in America

Ana Cláudia Sant’Anna

Kevin N. Kim

Iryna Demko³

Abstract: We examine Paycheck Protection Program (PPP) lending among African American and white farmers. Using data from the U.S. Small Business Administration we run fixed effect estimations with a Mills inverse ratio. Our findings suggest discrimination due to limited capital access. We find statistically significant differences between approved loan amounts among African American farmers due to income level and location of their farms. These had minimal effects on white farmers. Our results call for policymakers to c… Show more

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Cited by 3 publications

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“…There have been studies investigating differences across race in the distribution of government programs like crop insurance (Teal & Stevens, 2023), Market Facilitation Program and Coronavirus Food Assistance Program (Giri et al, 2022), Paycheck Protection Program (Demko & Sant'Anna, 2023; Sant'Anna et al, 2023), and Farm Service Agency loans (Escalante et al, 2018; Ghimire et al, 2020; Mishra et al, 2023; Wu et al, 2012). To our knowledge this is the first paper to examine the distribution of tax benefits to farm households by race and ethnicity.…”

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An analysis of tax benefits by race and ethnicity for farm households

McDonald,

Durst

2024

Applied Eco Perspectives Pol

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This research simulates the impact on tax liabilities of five tax provisions that provide benefits to farm households by race and ethnicity. Using pooled data from the Agricultural Resource Management Survey (2017–2021), we find that, relative to White non‐Hispanic principal operator farm households, certain business tax benefits are less prevalent and of lower value for Hispanic, African American, and Native American principal operator farm households due to differences in income and investment levels. Household tax credits are significantly higher for Hispanic and Native American principal operator farm households and Asian principal operator farm households have significantly higher total tax benefits from the five provisions examined.

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An analysis of tax benefits by race and ethnicity for farm households

McDonald,

Durst

2024

Applied Eco Perspectives Pol

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Explaining the source of racial disparities in market facilitation program payments

Hendricks,

Murphy,

Morgan

et al. 2024

American J Agri Economics

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This paper provides new insights on the distribution of agricultural government payments by farm operator race and the sources of disparities. We use farm‐level data from the Census of Agriculture to estimate the payments each farm was eligible to receive from the 2018 and 2019 Market Facilitation Program. We find that farms with a White operator were eligible to receive significantly more payments than farms with a non‐White operator. Most of the disparity for farms with a Black operator is due to differences in average farm size, because there are few large farms with a Black operator. The disparities for farms with an American Indian, Asian, or Pacific Islander operator were roughly half due to farm size and half due to the location of these farms and the types of commodities they tend to produce.

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Paycheck Protection Program and lending discrimination in the US hospitality industry

Lelo de Larrea,

Altin,

Koçak

et al. 2024

Tourism Economics

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This study aims to assess lending discrimination in the Paycheck Protection Program (PPP) in the hospitality industry. PPP is one of the initiatives of the US government in response to the COVID-19 pandemic to support small businesses. While the US Congress aimed to target minority-owned and other businesses at a disadvantage, early research on the program found lending discrimination. This study contributes to this research stream by being the first to focus on the nationwide hospitality industry and consider all three funding rounds. Specifically, the study analyzed differences in approval amounts based on race and gender and found significant differences between White- and Black or African American-owned businesses and between male- and female-owned businesses, with the latter of these groups at a considerable disadvantage. The results of this study could guide policymakers in creating assistance programs with more stringent clauses to ensure the support gets to those most in need.

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Limits to capital: Assessing the role of race on the Paycheck Protection Program for African American farmers in America

Cited by 3 publications

References 25 publications

An analysis of tax benefits by race and ethnicity for farm households

An analysis of tax benefits by race and ethnicity for farm households

Explaining the source of racial disparities in market facilitation program payments

Paycheck Protection Program and lending discrimination in the US hospitality industry

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