Farm Foreclosure – All You Need To Know About

Farm foreclosure was the major problem that most of the American farmers faced from 1929 to 1933. The farmers were depressed during this time span as most of them have lost their farms and fields. That was the worst time for the American agricultural economy. But then a question comes in mind that why this farm enclosures happened? Well the reason was that the farmers were in big debt.

Some of them have mortgaged their lands and the others have to take money for raising the crops. The prices of the crops were decreasing at a fast pace and that made it difficult for the farmers to pay off their debits. This caused them to lose their mortgaged lands. In 1920 the prices of all cash crops came down by 78 % and then it was again in 1929 when the prices of livestock and crops fell by 75 %. All these reasons caused their income to get reduced by 60 % from crops and it got reduced by 66% from the livestock products.

Because of the above mentioned reasons they were not able to loans of the banks and that proved fatal for small country banks also. More than 3600 banks failed during this period. All these farm enclosures keep on increasing from 1920 and became drastic in 1930’s. Where it was only 3.4 % in 1920 it became 38.8 % in 1933. These foreclosures were more prevalent in the great plain states and some southern states.

Rural farmers were not even able to get off farm earnings. An idea of Federal Farm Board was introduced to help them but it was not successful due to lack of funds. After that Franklin Roosevelt administration started their attempts to handle this problem. They succeeded fair enough in their attempts and many farmers got their lands back. The condition improved after 1940.

An act named Saskatchewan Farm security Act was passed in 1988. It made it mandatory for the creditor to give a notice to farmer as well as to the farm security land board so that the matter could be solved without intervention of court. In case of a dispute, there is a dispute resolution services that try to settle the matter. Before the enclosure they have to go through a 150 days process. A financial review is done for 60 days and mediation is tried for 45 days between the lender and the farmer. If nothing works then the matter is taken to the court.