Following close on the heels of the 1980's farm financial crisis, the 1988 drought aroused concerns that hard-pressed lenders might desert farmers and other rural borrowers. The evidence suggests, however, that farm and rural credit continues to be readily extended, even in areas hit hardest by the drought, and that 1988 was a relatively good year for farm and rural lenders. The combination of drought-induced rises in crop prices, crop stocks left over from earlier years, and Federal disaster assistance seems to have kept farm losses well below what was initially feared.