Kenneth C. Carraro examines the factors behind the farm recession and explains how the farm sector staged a significant recovery in 1987 in both the nation and the Eighth District. According to Carraro, the recovery has been evident in most farm sector indicators. Real farm income has returned to levels that prevailed before the boom years of the 1970s. In addition, land values have stabilized and increased slightly, and farm lenders have reported improved loan performance. The author cautions, however, that reliance on government aid has grown.