AGRICULTURAL FINANCE 



Table 9. — Frequency Distribution of 177 Purchased Farms by the Amount 

 Paid for Farm and Average Annual Change in Net Worth, Massachusetts. 



*With one farm omitted, averages are: Decrease in mortgage +$1,039; Increase in price of land 

 and buildings $-2,994; Net worth 50 percent. 



The proportion of farms showing a decrease in net worth was greater for the 

 higher-priced farms (over $9,000). This, combined with the fact that most of 

 the higher-priced farms were purchased during the period 1916-30, may explain 

 why a greater proportion of the farms purchased during this period failed to in- 

 crease their net worth. 



The three factors, percent net worth, income, and change in net worth, may 

 now be combined into one analysis. For this anatysis the following points are 

 used to indicate an unfavorable position: (1) percent net worth, 49 percent or 

 less; (2) income, $500 or less; (3) net worth since acquiring farm, unchanged or 

 decreased. Table 10 shows the results by this classification for 177 purchased 

 farms for which all the information is available. 



The distribution of farms under this triple sort would appear theoretically to 

 give a good picture of the financial standing of these farmers. However, upon 

 further examination, other factors which complicate the picture are found. For 

 instance, the net worth of some farmers has decreased because of a drop in prices, 

 but they have been able to stand the fall and are still in good standing. Some 

 farmers manage to increase net worth by living very frugally. Difference in size 

 of family, also alters the purpose for which the farm income will be spent. 

 Financial standing is raised on some farms through income earned by members of 

 the family working outside. Where the farmer is just getting started on the 

 farm, the net worth is apt to be low. 



These qualifications may lead one to believe that the above analyses have not 

 given any better understanding of the financial position of this group of farmers. 

 However, these conclusions, which are related to the purpose of the study, do 

 seem justified. 



L The proportion of farmers who had a dangerously high debt load or poor 

 financial condition was not over 20 percent. 



