The Agricultural Credit Act of 1987 authorized shared appreciation agreements (up to 10 years in duration) for debt structurings. The appreciation recapture was set at 75 percent of any appreciation in fair market value of the collateral if, within four years, the loan is paid off, the borrower ceases farming or the borrower transfers the property. The borrower pays 50 percent of any appreciation if the triggering event occurs after four years or, if not, upon termination of the agreement (up to 10 years). Currently, more than 11,900 shared appreciation agreements have been executed on debt write-down of over $1.7 billion. Approximately 6500 of the agreements are currently in effect and will become due over the next 10 years.



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