The market for agricultural credit in Virginia was analyzed to provide market intelligence to financial institutions which extend credit to Virginia farmers. The agricultural environment in the U.S., the South, and Virginia were reviewed concerning the effect of current agricultural sector transition on producers, lenders, agribusinesses, and rural communities. The agricultural credit delivery system in Virginia was studied. The credit use and needs of Virginia farmers and agricultural customers of three Virginia banks were also evaluated.

The market for agricultural credit in Virginia was found to be stable. Virginia agriculture is in relatively good financial condition, benefiting from the state's diverse and strong general economy. The use of agricultural credit varied demographically, with one-half of Virginia farmers owing no agricultural debt. Virginia farmers considered Interest rates most important te iender selection and desired the implementation of financial services such as tax planning, estate planning, and financial management seminars. Statistical analysis revealed the presence of market segmentation variables but failed to definitely identify segments. Bank customer survey group responses varied from those of Virginia farmers in general and from each other.

Challenges facing Virginia agricultural lenders include adapting to the new agricultural environment, meeting the changing needs of the modified customer base, and competing with new sources of credit.

A synopsls of recent studies and statistical information concerning U.S., Southern, and Virginia agriculture and results of the 1987 Virginia Agricultural Credit Use and Needs Survey are included.