Agriculture and other sectors of rural America present special challenges to financial markets. These sectors typically are capital intensive, geographically dispersed, and limited in scale and scope of business operations. They are subject to seasonal and cyclical swings in economic conditions, often resulting in liquidity problems at lending institutions serving these sectors. Nonagricultural rural areas experience considerable unevenness in economic performance and outlook and, together with agriculture, are experiencing significant structural change (Henry and Drabenstott). Borrower-lender relationships in rural markets are traditionally characterized by reputation
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