In troubled farm belt, much hope rides on a bumper crop in '84

A cold drizzle is falling on the rolling countryside. Fields are rain-soaked to the point of mud. A gloom hangs in the air. This is usually a season of hope - nature's prelude to the spring planting that lies ahead. But for many farmers around here, this is a season of great uncertainty.

''If we don't have one good year, we're not going to be here next year,'' says Milton L. Cracraft, a farmer since 1947. ''We're just one year off (from foreclosure).''

''It's terrible,'' agrees Allen E. Craig, whose farm was auctioned off last December, after his loans were called in. ''We're trying to pick up the pieces and start over.''

Here in northwestern Missouri and in parts of Iowa, Illinois, and other agricultural states, there are rumblings of a farm crisis. It has not reached nationwide proportions - in some regions, farmers are doing better. But in hard-hit areas, much is riding on a successful '84 crop.

''We're banking everything on that,'' says Carl O. Smith, president of Gentry County Bank in nearby Albany. ''I've been in the bank for almost 50 years . . . . It's the worst I've seen.''

Nationwide, about a third of the owners of mid-sized and large farms - those most likely to earn most of their income from farming - have the kinds of debts that suggest financial stress, says Emanuel Melichar, senior economist with the Federal Reserve Board.

But in this area, the situation is twice as bad.

Roughly two-thirds of the farm customers at Mr. Smith's bank are either delinquent or have had to reschedule their loans.

Many of those hardest hit have money borrowed from the Farmers Home Administration (FmHA) - the federal agency set up in 1946 to loan money to farmers who could not get credit elsewhere.

Mr. Craig's FmHA debts piled up so high - to $700,000 - that he had to liquidate his holdings.

After three years of farming with his father, Craig set out on his own in 1974. He took out an FmHA loan to buy 300 acres of land - not an unusual move, since the investment cost him $120,000. One of the FmHA's mandates is to help young farmers starting out.

The subsidized interest rate was relatively painless since ''inflation just kept getting higher and higher,'' he recalls. ''The money was just there for the taking. (Growth) is all they preached to us.''

In 1981, Craig bought 200 more acres with an FmHA loan. ''We thought good times were here to stay,'' he says.

The good '70s brought rising, perhaps unrealistic expectations for the '80s. Farmland values reached new highs - the land Craig bought in 1981 cost 50 percent more per acre than his original land.

But three of the last four years saw poor harvests here. Operating expenses rose dramatically, while livestock prices stayed low. High interest rates caught indebted farmers unprepared - and with the onset of recession, there was little inflation to ease the debt.

Craig, meanwhile, had overinvested in machinery. By last December, his interest charges were piling up at the rate of $175 to $180 a day, he says.

The FmHA accelerated his loan repayment, and Craig had to sell off his 81 head of cattle, three tractors, and other machinery. His land is rented to someone else under FmHA. The next step may be bankruptcy, he says.

He is an example of how some farmers have been unable to make a profit since the '70s export boom.

''Some came into the business at the wrong time . . . incurring amounts of debt that would make most of us blanch,'' says Marvin Duncan, vice-president and economist at the Federal Reserve Bank of Kansas City.

But the down side of this particular boom has been exacerbated by embargoes against wheat and machinery for the Soviet gas pipeline, he says. International tensions caused more attempts at food self-sufficiency; budget deficits, he argues, raised interest rates and the value of the dollar, depressing farm exports.

But Mr. Duncan expects farmers to be more careful in borrowing. He adds that income will be more widely distributed this year, helping livestock and grain farmers.

That scenario would be a boost to this region's private bankers. ''They've got to have one good year under their belts,'' says Russell Wardell, executive vice-president of the First National Bank of Bethany.

For his part, Craig has incorporated, and is now trying to raise 43 head of cattle on rented land. ''You've just got to have a way to get over it,'' he says.