ResearchBPEA | 1986 No. 2
The Farm Debt Crisis and Public Policy
1986, No. 2
U. S. FARMS, and with them agriculturall ending institutions,a recurrently experiencing their most severe stress since the 1930s. From 1980 to 1984, the average real value of U.S. farmland dropped by 29 percent. The decline has been most pronounced in the Corn Belt and Northern Plains states that produce cash grains, general livestock, and dairy products; in Nebraska, for example, the real value of farmland is half what it was in 1980. The erosion in the value of equity has had the effect of increasing the leverage of many farm borrowers. Delinquent loans have increased substantially,h itting 7.5 percent of total loans at small agricultural banks by mid-1985.