Nebraska continued its traditional dependence on agriculture in the late 20th century, sustained by underground water sources and heavy government subsidies. Between 1945 and 1990, the amount of irrigated land in the state increased from 364,230 hectares (900,000 acres) to almost 3,237,600 hectares (8,000,000 acres). Federal farm subsidies are an important part of Nebraska agriculture. From 1985 to 1989 Nebraska farmers received almost $4.3 billion in federal subsidies, 45 percent of net agricultural income (compared to 33 percent for farmers nationally). In the early and middle 1980s Nebraska suffered through its worst economic crisis since the Great Depression. As in other farm depressions, many farmers had taken large loans to purchase land and modernize operations and were driven into bankruptcy when crop prices dropped and land values fell. Many farmers lost their land, and some banks with extensive farm loans followed them into insolvency.
The metropolitan economies of Omaha and Lincoln escaped the worst effects of the farm crisis, but rural areas, heavily dependent on farming and farm-related business, suffered. Unable to find jobs, young people fled the state in large numbers—83 of 93 counties lost population in the 1980s.
In 1982 Nebraska adopted Initiative 300, a constitutional amendment that seeks to protect family farms by prohibiting individual farmers from selling their land to corporations. Initiative 300 does not appear to have significantly slowed the continued consolidation of Nebraska farms, but it has withstood all constitutional and political challenges. In 1987 land prices began to recover. To further promote growth and recovery, the state that year adopted a package of tax incentives.
Pressured by the agriculture corporation ConAgra, which threatened to move its headquarters out of Omaha if the state did not modify its tax laws, the legislature lowered its highest individual income tax rate from 9.5 percent to 7 percent, exempted certain kinds of business equipment from property taxes, and gave tax breaks to companies that created jobs.
Although the large, older Omaha-based companies—such as ConAgra, the Union Pacific Railroad, and Mutual of Omaha—continued to influence the state’s economy, new smaller companies scattered across the state in the telecommunications, insurance, health care, and tourist industries became increasingly important in the late 1980s and early 1990s. Businesses with fewer than 100 employees accounted for three-quarters of Nebraska’s nonfarm employment and the proliferation of these businesses fueled the state’s economic revival.
As a result Nebraska’s economy has grown steadily in the 1990s, enabling the state to avoid most of the effects of a national recession in early years of the decade. In addition, all but 20 of the state’s counties halted their population losses in the early 1990s. Encarta
Despite the economic expansion, Nebraska retains its heavy reliance on agriculture. Education and medical costs have increased in the 1990s, property taxes remain high, and the population in some rural areas continues to decline. But the effects of these problems have been greatly eased by the state’s buoyant economy. "Nebraska" © Emmanuel BUCHOT, Encarta, Wikipedia
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