Author

Paul Kiendl

Document Type

Thesis - Open Access

Award Date

1984

Degree Name

Master of Science (MS)

Department

Economics

First Advisor

Donald C. Taylor

Abstract

In the U.S., agriculture is a major industry which produced approximately $529 billion worth of goods in 1982. Agriculture directly employs 3 percent of the U.S. work force, while another 19 percent is employed in manufacturing, processing, transporting, and retailing agriculturally related products. In the past few years, this major industry has experienced a turbulent economic period. The general economic recession in the world coupled with the elevated interest rates have depressed the financial position of the agricultural sector. In 1981, both short-and long-term interest rates reached post World War II record highs. More significantly, the real interest rate rose from 14 percent in 1980 to 6.06 percent in 1982. The real interest rate in the U.S. is currently the highest in the world and consequently the value of the dollar has increased by 37 percent since 1980. The high value of the dollar in 1982 has between 1981-1982 contributed to a decrease in the volume of agricultural exports by 6 percent and their value by 15 percent. Farmers are affected by the poor export performance, since 22 percent of their cash receipts are derived from the sale of agricultural products abroad. Within the U.S. domestic scene, the reduced demand for commodities and the increasing costs of production have placed the farmers in a cost price squeeze. Since 1979, the prices paid by farmers for production inputs have been rising at a faster pace than the prices received for agricultural products. This resulted in an 18 percent decrease in net cash farm income between 1981 and 1982. To compound the problem of the cost price squeeze, land values in the U.S. have been declining since 1980. Real estate assets make up over 75 percent of total farm assets. The recent decline in income has prevented farmers from repaying their debts while the declining land values have eroded the farm credit base. Consequently, the debt/asset ratio of farms in the U.S. increased from 16.1 in 1979 to 20.6 percent in 1983. In a State such as South Dakota, the economic health of the State is largely dependent on the vitality of the agricultural industry. However, the cumulative effect of low commodity prices and the rising costs of production has affected the well-being of farmers. In 1983, the total debt/asset ratio was 28.6 percent. This represented an increase of 38 percent since 1979. This thesis is designed to investigate the future prospects of an irrigated farm located in Brookings County. Brookings County reflects the rapid pace of irrigated development within the State. Brookings County in 1969 only had 984 acres under irrigation. ty 1982 the irrigated area had expanded to 16, 074 acres (U.S.D.C., 1982). The land area under irrigation has increased by 16.3 times since 1969.

Library of Congress Subject Headings

Irrigation efficiency
Irrigation efficiency
Irrigation farming -- Economic aspects
Irrigation -- South Dakota -- Economic aspects
Brookings County (S.D.) -- Irrigation

Format

application/pdf

Number of Pages

125

Publisher

South Dakota State University

Rights

No Copyright - United State
http://rightsstatements.org/vocab/NoC-US/1.0/

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