On agricultural prices and changes in its profit

Several centuries ago in Europe there have been three consecutive years of massive crop failure led to soaring food prices, sales plummet, but also why the credit rating of its farmers would be down?

Him a price rise is not just a few sales offset you why banks will reduce their credit rating do?

Just to see .. sorry ...

Simple .. I think ...
Bank credit to farmers because of the assessment should be based on their food production and sales forecasts ...
To these two points is the subject as the evaluation criteria ...
But the food as highly liquid collateral (in the broad sense ... because, unlike other physical assets such as fixed assets, etc. ... there is a similar valuation of the flowers is difficult because the food is not nurseries, etc. ... there may be long kept in the bank ... even if the breach of the collateral taken away it is difficult to realize ... the same time banks have to pay a high management costs ... like you can not find someone to stare at it every day). ..
finance question and answers

Fluctuations in the market is not the year is still relatively easy to market valuation ... (because food is generally limited price)

However, large-scale crop failure in the case of ... the bank will lower its credit rating due to rising food prices ... ... is attached to the supply reduction effect ...
In other words ... for now ... do
VaR may be calculated by the bank if you do not lower their credit .... and so on ... even after the breach of contract farmers to offset ... may not cover food (popular that banks still have to put it ... realization of the .. . ... but also their own to find someone to sell a variety of costs here)

I've also participated in research through a survey of loans of similar flowers ...
Bank is also to do so ..

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