U.S. farmers’ problems expected to continue

Press, 3 February 1986, Page 14

U.S. farmers’ problems expected to continue

NZPA staff correspondent Washington

Severe financial problems facing about 12 per cent of United States fanners are likely to persist through this year, says the United States Agriculture Departent. Some signs had been shown that farmers’ depressed financial positions might stabilise in 1986, it said.

The department said there were some signs that the sector had begun to adjust to the financial stress of the last several years. Investment in expanding capacity had stopped, capital continued to leave the farming sector and low commodity prices could begin to strengthen demand, it said. “The trade-weighted value of the dollar has declined steadily since March, 1985, and may slip further. However, because of lags in response, farm exports are not likely to expand appreciably this year. "Input use has started to decline as fanners attempt to cut costs. Also, farm debt and interest expenses have begun to shrink due to reduced purchases of land and equipment, as well as

lower interest rates, thereby improving prospects for eventual gains in liquidity,” the department said. The declines in farm values during 1984 and 1985 were forecast to slow in 1986, it said. “However, the nearly SUS2SO billion ($475 billion) cumulative loss in farm sector wealth since 1981 has undermined the financial security and threatened the viability of many indebted farmers,” the department said. .