ABSTRACT
This chapter presents the series of economic changes leading to the reversal of fortunes, as well as the causal forces underlying them. It examines the economic and financial changes that have driven many farm families to, and in many cases over, the brink of bankruptcy. The chapter summarizes the financial status of the farm economy. Although the factors are intertwined, they can be viewed as a convergence of national and international economic trends, federal monetary and fiscal policies, and evolutionary changes in the structure of United States (US) agriculture. Changes in federal monetary and fiscal policies, in policies regulating financial institutions, and in policies directly affecting farm prices and incomes have all played a substantial role in determining the current economic and financial status of US agriculture. Revised expectations of future conditions in agriculture led to sharp reductions in land values, and agricultural lenders were forced to reassess the security of many of their loans.
