Farmers who rent the majority of their land are under the most financial stress. Purdue University Agricultural Economist Mike Boehlje says those farmers have higher cash costs and may be overextended on working capital. According to Boehlje, the current downturn in the farm economy does not compare to the farm crisis days of the 1980s. “At that time, we had a land that went through the foreclosure process and we increased the supply in the market and that collapsed the land values, similar to the 2008 housing crisis.” Similar to the 1980s, Boehlje is seeing distressed loan lenders showing up in the agricultural market. “Sometimes they’re called bottom-feeders in the market; they typically aren’t local lenders, but put a lot of security requirements on it and don’t provide much flexibility in the structuring of it.” Boehlje cites payday loans in the consumer market as an analogy to the predatory loans in agriculture.
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