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Abstract

Long-term trends to fewer and larger farms appear to have slowed sharply in the late seventies and early eighties. High leverage of farm assets, declining asset values, and low commodity prices caused severe cash flow problems for the farm sector In the early eighties, and many farmers incurred sizable losses. Computer simulation models of representative farms in six regions of the country suggest that fully owned farms with modest or no debt should fare reasonably well over the next few years. But part-owner farms and heavily indebted farmers will likely face financial difficulty and declining net worths. Commodity programs were found to contribute significantly to the survival ability of farms.

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