ABSTRACT
People notice the problem during the bust-when the bottom drops out for large numbers of farmers. Paradoxically, since the real problem has to do with the structure of the farm sector, the problem is always there-even when farmers seem to be doing the best financially. A story of financial distress in the farm sector, like the one which the 1981-83 statistics outline, comes about whenever beliefs about the level of future returns to farm assets change and expectations of substantially lower returns lurk behind every market report. Yet farmers, like other people, have a short historical attention span. Farmers, as primary producers, are among those who experience the most extreme effects of the situation. The formulators of all of these policies intended to help farmers weather the crisis and to move the economy back toward a healthy condition. In addition to the land market being a thin or illiquid market, land has substantial liquidity risk for farmers.
