AGRICULTURAL FINANCE 



23 



The agency which showed the greatest seasonal variation in loans outstanding 

 was the Farm Credit Administration's Emergency Crop and Feed loans. Even 

 their loans were more than two-thirds as large in January as in July. Of course 

 there are trends in the amount being loaned by these different agencies from year 

 to year, but the trend is not sufficient to account for the small spread between 

 Januarj^ 1 loans and July 1 loans. The fact is that the amount of loans other 

 than real estate mortgages continues at a high level throughout the year. The 

 seasonality on individual farms will be greater than for farming as a whole; 

 but by necessity, since the amount loaned bj' agencies does not vary considerably 

 by seasons, the amount outstanding on individual farms must in a large part be 

 fairly constant. 



In reality it appears that "short-term" and "intermediate-term" credit have 

 become a source for long-time credit, the difference being that the security is 

 different and the refinancing is much more frequent. As has already been pointed 

 out, most of the current debt owed by those with debts over $1,000 for other than 

 mortgages was for the purpose of financing losses in their farming operations. 

 Many of the other smaller borrowers use this credit to buy machinery, to meet 

 feed bills, etc. They never get caught up — when they pay one debt they incur 

 another, or they use an open-book account on feed and are always behind. 



Notes 



The total amount of notes outstanding amounted to 57 percent of the credit 

 other than mortgages. The number of farms using notes and the number of notes 

 per farm is shown in Table 28. Nine percent of the farms, with notes totaling 

 over $1,000, owed 75 percent of the amount outstanding on notes. Sixty-one 

 percent of the farms had no notes outstanding. Of the 106 which owed on notes, 

 58 percent were in debt on only one note, and 13 percent had more than two notes. 



A discussion of notes is made difficult by the fact that a small proportion of the 

 borrowers owed such a large proportion of the amount outstanding. If emphasis 

 is placed on the bulk of the borrowers, insufficient attention would be paid to the 

 large proportion of the debt represented. To get around this difficulty, frequency 

 distribution of notes by amount outstanding is used. 



Another difficulty results from the fact that a farmer may borrow from more 

 than one source (22 percent of the borrowers had notes from two sources and 8 



