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ziro4ka [17]
3 years ago
8

What factors led to the growing economic crisis in farming?

History
1 answer:
solniwko [45]3 years ago
6 0
In the 70's there had been e tremendous raise in grain exports to the Soviet Union, resulting in a steady rise in grain prices, which had led to banks readily offering loans at low interest rates and to farmers investing heavily and getting heavily into debt. All this investment however led to overproduction and consequently to a drop in grain prices and then, to a drop in land values.At the same time, interest rates went up, adding to the farmer's costs while revenues went down. On top of that, as a reaction to Russia's invasion of Afganistan the US President instituted a grain embargo to the Soviet Union. That meant that a major market for US grain disappeared overnight. The Russians started buying their grain elsewhere, meaning that even after the embargo was lifted US farmers could not realize anything like their former export volumes or <span>prices.</span>
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