The Economic Emergency (EE) loan program, administered by the FmHA, was created by Congress in 1978. The primary purpose of the program was to provide credit to farmers who were unable to obtain credit from normal lenders due to economic stress. Over six billion dollars of EE loans were extended nationally during fiscal years 1978 through 1981. This paper examines the allocation of EE loans at the state level and the expansionary effect of the program on farm credit markets. Empirical evidence is provided that EE funds were allocated to states consistently with the general criteria cited in the development of the EE program and that the EE program expanded farm credit markets rather than displacing loans from other sources.

Farm financial structure may affect both short- and long-run input usage,thereby affecting farm efficiency. Any inefficiencies arising from thechoice of inputs can be magnified over time as credit constraints continueto affect input usage. In a panel of 54 North Dakota crop farms, efficiencyand debt structure were related. Intermediate debt was found to bepositively related to farm technical efficiency, and short-term debt wasnegatively associated with technical efficiency. Use of intermediate-termdebt was positively associated with farm-scale efficiency, whereas nosignificant relationship was found between short- and long-term debt andscale efficiency.