The name is absent

Figure 3. Percent Change in Farmland Value, United States, 1981-85. Source: GAO, p. 5.

sumption during the past 4 years was down
1.75 million tons.

Demand for other farm inputs is influenced
by the acreage planted to major crops, Table
5. This indicates that the demand for inputs
used in production peaked in 1980 and 1981
and bottomed out in 1983.

Bad debt losses by agribusiness firms were
also substantial during the past few years. By
using the ratio of bad debt losses to volume
from a small sample of farm supply firms and

Table 4. Fertiuzer Consumption in the United States,
1975-85

Year                   Total                Primary

ending                 gross                nutrient

June 30 tons tons

............million tons ..........

1975 .............................42.5                 17.6

1976 .............................49.2                 20.8

1977 .............................51.6                 22.1

1978 .............................47.5                 20.6

1979 .............................51.5                 22.6

1980 .............................52.8                 23.1

1981 .............................54.0                 23.7

1982 .............................48.7                 21.4

1983 .............................41.8                 18.1

1984 .............................50.1                 21.8

1985 .............................49.0                 21.7

Source: USDA (f).
applying it to total farm production expend-
itures, as estimated by USDA, we get indi-
cations that total bad debt losses in the United
States were nearly $7 billion over the past 4
years, (USDA (a)), Table 6. This partially
explains the dilemma that many farm supply
firms face at the present time.

ALTERNATIVES FOR AGRIBUSINESS

There appears to be three basic alternative
strategies for agribusiness to consider in
maintaining financial viability under these
depressed conditions. These include: (1) to
diversify by redeploying assest into nonagri-
business areas, (2) to scale back the size of
operations where they are in line with ex-
isting demand and thus can operate effi-
ciently, and (3) to exit the agribusiness area.
Each of these alternatives is being imple-
mented to some extent throughout the coun-
try.

Diversification by redeploying assets into
nonagribusiness areas is being done by sev-
eral firms, especially those in machinery man-
ufacturing. Technologies used in designing

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