MacroeconomicPolicy and Agriculture

Chapter 15Introduction to Agricultural Economics, 4/eJohn B. Penson, Jr., Oral Capps, Jr., C. Parr Rosson III

Can macroeconomic policy affect agriculture? Sure!

financial stress caused by double-digit interest rates…

Can macroeconomic policy affect agriculture? Sure!

financial stress caused by double-digit interest rates…

Note the high realinterest rates, risingexchange rates andhigh real price of fuel in the mid-1980s.

Note the high realinterest rates, risingexchange rates andhigh real price of fuel in the mid-1980s.

Drop in real net farmincome and higherreal interest rates ledto declines in farmlandvalues.

Drop in real net farmincome and higherreal interest rates ledto declines in farmlandvalues.

As real net farm incomesdeclined and real interestrates rose, investmentexpenditures fell sharply.Outlays for operating inputsalso declined.

As real net farm incomesdeclined and real interestrates rose, investmentexpenditures fell sharply.Outlays for operating inputsalso declined.

This table summarizes the impacts that expansionaryand contractionary monetary and fiscal policy haveupon key variables that have a distinct effect on thefinancial health of farm operator families.

This table summarizes the impacts that expansionaryand contractionary monetary and fiscal policy haveupon key variables that have a distinct effect on thefinancial health of farm operator families.

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This table summarizes the impacts that expansionaryand contractionary monetary and fiscal policy ultimatelyhave upon such farm sector variables as commodityprices, input costs, net farm income and farmland price.

This table summarizes the impacts that expansionaryand contractionary monetary and fiscal policy ultimatelyhave upon such farm sector variables as commodityprices, input costs, net farm income and farmland price.