The level of debt held by farmers may be more of problem for future land values than previously thought if farm incomes drop sharply or interest rates spike, argues Nick Paulson at the University of Illinois. He looks at the argument that the current run-up in farmland values is not the same type of bubble as seen in the 1970s due to the low relative level of debt held by agriculture. He suggests that while that may be true, the absolute level of debt has still surged sharply and that high level could still prove a problem if incomes should drop and/or interest rates rise.
Click here to read his article "Farm Debt and the Farm Real Estate Bubble."
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