14— Lancaster Farming, Saturda
During the Sixties
Fewer fanners owe money these
days but their total debt load has
never been greater.
Only about half of the Nation’s
fanners were in debt In 1970, a de
cline from 1960. But even though
there were fewer operators and a
smaller percentage of all operators
in debt, total operator debt has more
than doubled during the 1960’5.
For all farms with debt, the aver
age amount owed per farm jumped
from $49,000 to $82,000 on Class I
farms with yearly earnings of $40,-
000 and over) and from $3,000 to
$7,000 on the smallest farms.
The proportion of indebted farm
ers varied according to the economic
size of a farm. There were outstand
ing debts on 4 out of 5 Glass I
farms but only 2 out of 5 of the
smallest farms. Between 1960 and
1970, debt became increasingly con
centrated on larger farms.
Similarly, larger farms increased
their share of farm income earned
and land and buildings owned during
this period.
The higher debt level for larger
farms doesn’t necessarily mean that
these farms are in an unfavorable
economic position. In fact, the re
payment ability on larger farms, as
determined by a ratio of farm in
come to debt, appears more favora-
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DIRTY BIRD!
f STOMP 1
(DOWN ON
> WASTE <
POLLUTION.
Get tough with your
trash and smash your
cans Then put them in
a separate box from
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It makes recycling
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and helps keep America
a great place to live
There are other ways
you can help They re
on the Woodsy Owl
anti-pollution poster
It’s free when you write
Woodsy Owl
Forest Service U S D A ,
Washington, D C 20250
And Remember
Woodsyfe
Words of Wisdom:
Give a Hoot!
Don’t Pollute!
@PSC
Sent. 14. 1
Farm Debts Soar
IcOMl
I Are You Ready?
il
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%
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fiMlfo ,
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ble now than 10 years ago. Also, debt
appears to be an important factor in
explaining farm growth.
Income from off-farm sources also
affects a farm’s debt-carrying capac
ity. Off-farm income becomes in
creasingly important as farm size
decreases. In 1970, off-farm income
ranged from 15 percent of total in
come for Class I farms to 96 percent
for the smallest units. .
When both farm and off-farm in
come are considered in relation to
debt, operators in Classes II and 111
(with annual incomes of $20,000-
$39,999 and $lO,OOO-$19,999, respec
tively) are often worse off than oper
ators of either larger or smaller
farms. These farms are apparently
too large to let the operator engage
in extensive off-farm work, but not
large enough to benefit fully from
the greater returns of larger units.
The larger farms which carry
most of the farm debt seem to be
the most efficient economically. For
instance, Class I farms in 1970 pro
duced $1 of net income for each $l7
of assets utilized. In contrast. Class
II farms had $2O and Class 111 and
smaller units, over $3O of assets for
each dollar of income. Thus, there is
incentive for increasing farm size,
and, consequently, the size of debts.
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