The United States experienced a major farm crisis during the 1980s. By the mid-1980s, the crisis had reached its peak. Land prices had fallen dramatically leading to record foreclosures.
Farm debt for land and equipment purchases soared during the 1970s and early 1980s, doubling between 1978 and 1984. Other negative economic factors included high interest rates, high oil prices (inflation) and a strong dollar. Record production led to a fall in the price of commodities. Exports fell at the same time, due in part to the 1980 United States grain embargo against the Soviet Union. The Farm Credit System experienced large losses, which were the first losses since the Great Depression. The price of farmland was a significant factor. Credit availability and inflation had contributed to an increase in the price of farm land. Demand was further bolstered by high farm incomes and capital gains on farm real estate, when many farmers expanded their existing operations. The value of farmland increased so drastically that it attracted investment from speculators.
Agricultural banks felt the impact of the crisis. There were 10 bank failures in 1981, only one of which was an agricultural bank. In 1985, the number rose to 62, of which agricultural banks accounted for over half.
References
- "1980s Farm Crisis". Iowa Public Television. Archived from the original on Apr 10, 2016.
- ^ "Banking and the Agricultural Problems of the 1980s" (PDF). History of the Eighties - Lessons for the Future: An Examination of the Banking Crises of the 1980s and Early 1990s. FDIC. Retrieved 7 June 2021.
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