Inflation, a rise in the general price level, affects agriculture in four basic ways. It increases prices of farm products and inputs, encourages farmers to purchase more capital inputs, increases the wealth of those who own the land, and strengthens the relative economic position of high-income people, farm and nonfarm, in buying land. Since the late sixties, changes in prices paid for farm inputs and changes in prices received for farm products have closely corresponded to changes in the general price level. Under inflationary conditions, gains by some often depend on losses by others. This report provides a basis for understanding the causes and effects of inflation as related to agriculture and the conflicting objectives of aiding clientele groups and stopping inflation.