"The number of agricultural banks headed toward failure appears to have peaked, largely because of massive federal farm subsidies and other government help.</br></br>But while the number of imperiled farm banks has declined in recent quarters, economists, bankers and bank regulators say they don't expect any substantial improvement in the agricultural economy soon.</br></br>Indeed, should the government pare its huge support package for farmers and their lenders -- including subsidies, regulator forbearance for troubled banks, and holding farm land off the market -- agriculture could head into another tailspin. ""The government programs, in a number of ways, are serving to stablize conditions,"" said Mark Drabenstott, an economist at the Federal Reserve Bank of Kansas City, Mo.</br></br>Federal subsidies are expected to account this year for nearly three-fourths of farmers' incomes nationwide, which Mr. Drabenstott estimates at about $35 billion.</br></br>That infusion of money is helping many farmers and, thus, lenders hang on. According to the latest Federal Reserve Board data compiled by Veribanc Inc., a Woburn, Mass., consulting concern, the number of farm banks likely to fail has been declining since a year ago."