A Simulation Model of Farm Sector Social Accounts: With Projections to 1980

A simulation ir!octel developed from regression estimates of fa-.rm ~ector sources and uses of. funds is llsed to project a farm income statement, balance sheet, and sources-and-uscs-of-funds statement to 1980. Projection results suggest that (a) total assets in the farm sector may total morc than $450 billion by 1980, (b) real estate debt may grow much more slowly than nonreal estate debt, (c) proprietors' equities as a percentage of total assets may decline from 81.2 percent in 1970 to 73.5 percent in 1980, and (d) total funds from all sources br the farm sector in 1980 may he 58 percent greater than in 1970. The simulation modei is also used to appraise the impact on finaHcial structure ofselected public policies. Results suggest that (a) lowering reserve requirements on deposits as suggested by the President's Commission on Financial Structure and Regulation would have little impact on lending in the farm scctOl, .. mi (h) the imposition of minimum wage rates for all hired farnlworkers would reduce net income of farm operators, decrease consumption It!vcls of farm operators, and suhstantially increase the demand for farm machinery and nonreal estate deht, but result in only a slight decline in proprietors' equities.