Embattled farmers
If any particular quality describes America's farmers, it is resiliency. Through lean years as well as periods of plenty, farmers have found ways to innovate and overcome obstacles. And the proof of such creativity is that the United States has repeatedly been blessed by abundant crops that have helped feed much of the world.
That quality of resiliency is needed now in US agriculture more than at any time in recent years. The extent of the terrible toll being paid by farmers because of the current recession is not yet fully known, but the indications are troubling. Net farm income is now at the lowest level since the Great Depression. Yet farm costs -- and that mainly means interest rates -- remain prohibitively high.
At a recent series of regional field hearings conducted around the US by the National Farmers Union, it was brought out that between 20 and 35 percent of the farmers in each area are going out of business. ''For Sale'' signs are uncomfortably common on many a dusty rural roadway. The delinquency rate on low-interest loans from the Farmers Home Administration (FmHA) is running at around 58 percent, the highest level many farm experts can recall. Total US farm debt is now estimated at over $200 billion.
What has led to such conditions? And, most important, what can be done to help the farm economy?
Agricultural economists and farm organizations are as divided in their assessment of the depth of the current downturn as they are about the reasons for and solutions to the problem. Still, there is general agreement that, given the combination of high farm costs, large crops, low commodity prices, and sagging world food demand, many farmers would have difficulty today even under nonrecessionary conditions. The 1980 grain embargo against the Soviet Union clearly hurt many farmers. And it must also be noted that many farmers financially overextended themselves throughout the 1970s, in effect buying land ''on margin'' during that period of high inflation and widespread land speculation.
A number of solutions suggest themselves:
* The FmHA should consider a one-year moratorium on foreclosures. Lower interest rates (than current rates running between 13 percent and 15 percent) should also be made available through this period.
* The question of food embargoes should be seriously rethought. A strong argument can be made that such embargoes should be undertaken only in the most extreme of cases.
* Farm exports must be promoted even more vigorously. Some steps are encouraging. Right now, for example, a delegation from the American Farm Bureau Federation is visiting Japan to try to pry open that market to more imports of US beef. Congress, for its part, should provide funding for the Commodity Credit Corporation Export Revolving Fund to help promote exports. It might also consider using Export-Import Bank funds for farm sales abroad.
* Soil erosion is now such a serious problem that as many as 25 million to 62 million acres of land could be lost during the next half century. Farmers have to be encouraged not to exhaust the land but to ensure its long-range productivity.
Long-range solutions should be geared to developing economic conditions. If the farm slump has bottomed out, or soon bottoms out, then more drastic action may be unnecessary. If conditions worsen, Congress might well want to consider mandatory set-aside programs for commodities, rather than the current voluntary programs. Another option for Congress -- federal red-ink notwithstanding -- might well be to reconsider the Farm Act of 1981 which sets support price levels.
By all indications, Congress and the Reagan administration need to get ''out on the farm'' to ensure that they are gauging conditions properly. Of all US ''industries,'' none has been more efficient or productive over the years than agriculture. To overlook that now would be to ignore one of America's -- and the world's -- greatest assets.
