For farmers with high debt/asset ratios, leasing is an attractive option for securing the use of farm machinery. Under the current tax laws, financial leasing carries lower after-tax costs than loan purchasing. By size, farms with more than $500,000 in sales had the highest proportion of U.S. expenditures for farm equipment leasing. By region, the Pacific States, Corn Belt, Delta-Southern Plains, and Northern Plains regions accounted for the largest proportion of expenditures. By farm type, cash grain, dairy, general livestock, and field-general crop farms recorded the largest proportion of leases. Because many are large farms, they require the use of large equipment whose resale caters to a very limited segment of the farm sector. Without an obligation to purchase, these farms are protected by leasing from the decline in the equipment's market value. (Author/KC)