ABSTRACT
This chapter describes the tools available to farm policy-makers and industry decision-makers to project future financial conditions in the farm sector. It deals with historic problems to chapters describing future issues in farm finance by providing an example set of projections. The implications for the farm sector of continued slow growth in incomes and higher interest rates are obvious: low incomes, declining asset values, and restricted use of debt financing. Farm incomes are likely to remain low, asset values will probably continue to decline, and debt financing might be constrained. The decline in real farm asset values with faster growth in money is slower in the first few years of the projections, but faster in later years because farm profitability is lower. Large farms may well develop new ways of tapping equity funds, perhaps by growing large enough to sell stock. A profitable sector would bring about increased competition in the farm credit markets.
