Michael T. Belongia and Kenneth C. Carrara examine the performance of the major lenders to the farm sector to gain some perspective about the sector’s financial condition. These financial institutions are the Farm Credit System, agricultural banks and the Farmers Home Administration (FmHA). Belongia and Carrara first offer a brief description of these three agricultural lenders. They suggest that institutions that sharply increased their lending to agriculture during the 1970s and early 1980s, when inflation, foreign demand for U.S. farm products and real commodity prices were increasing or were expected to increase rapidly, should be experiencing the greatest deterioration in portfolio quality. The available data indicate that the performance of agricultural loans, as measured by delinquencies and loan losses, has worsened at all three lenders since 1982. In terms of profitability, however, agricultural banks have suffered less severe downturns than Farm Credit System lenders. The Farmers Home Administration (FmHA), which is a governmental agency and therefore does not report profitability data, also has exhibited greater forbearance on delinquent farm loans. Although nearly 25 percent of their farm ownership loans were delinquent in 1984, only 0.22 percent of all FmHA farm loans were written off.