Many farmers invested in land and equipment during the war.
Mid-1920s Farming Crisis
The 1920s was a continual cycle of debt for the American farmers, due to falling farm prices and the need to purchase expensive machinery.
Farmers invested a lot of money in land and equipment for which many of them took a mortgage. After the war, they were unable to pay off their debts and as a result their farm lands were foreclosed.
To help farmers, Government came up with the first major New Deal initiative, which attempted to raise farm prices to a level equitable to the years 1909-14, by creating Agricultural Adjustment Administration.
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