down on the farm

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http://bst.sagepub.com/ & Society Bulletin of Science, Technology http://bst.sagepub.com/content/7/3-4/383 The online version of this article can be found at: DOI: 10.1177/027046768700700302 1987 7: 383 Bulletin of Science Technology & Society Down on the Farm Published by: http://www.sagepublications.com On behalf of: National Association for Science, Technology & Society found at: can be Bulletin of Science, Technology & Society Additional services and information for http://bst.sagepub.com/cgi/alerts Email Alerts: http://bst.sagepub.com/subscriptions Subscriptions: http://www.sagepub.com/journalsReprints.nav Reprints: http://www.sagepub.com/journalsPermissions.nav Permissions: What is This? - Jan 1, 1987 Version of Record >> at UNIV N CAROLINA GREENSBORO on November 4, 2014 bst.sagepub.com Downloaded from at UNIV N CAROLINA GREENSBORO on November 4, 2014 bst.sagepub.com Downloaded from

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Page 1: Down on the Farm

http://bst.sagepub.com/& Society

Bulletin of Science, Technology

http://bst.sagepub.com/content/7/3-4/383The online version of this article can be found at:

 DOI: 10.1177/027046768700700302

1987 7: 383Bulletin of Science Technology & SocietyDown on the Farm

  

Published by:

http://www.sagepublications.com

On behalf of: 

National Association for Science, Technology & Society

found at: can beBulletin of Science, Technology & SocietyAdditional services and information for

   

  http://bst.sagepub.com/cgi/alertsEmail Alerts:

 

http://bst.sagepub.com/subscriptionsSubscriptions:  

http://www.sagepub.com/journalsReprints.navReprints:  

http://www.sagepub.com/journalsPermissions.navPermissions:  

What is This? 

- Jan 1, 1987Version of Record >>

at UNIV N CAROLINA GREENSBORO on November 4, 2014bst.sagepub.comDownloaded from at UNIV N CAROLINA GREENSBORO on November 4, 2014bst.sagepub.comDownloaded from

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The Farm Crisis:Who’s in Trouble, How to Respond

Prepared by thePublic Agenda Foundation

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Editor-in-Chicf: Keith Melville

Consulting Editor: Robert KingstonWriters: Keith Melville, Sarah HenryResearch: Sarah HcnryEditor: Ilse Tebbetts

Copy Editor: Betty Frccker

Questionnaires: Sarah Henry, John Doble

Design and ProductionDirector: Robert DaicyProduction Manager: George CavanaughCirculation Coordinator: Victoria SimpsonSecretary: Valerie BraumCover Illustration: John CraigWord Processing: Rebecca Talbutt, Diann Julte

Graphic Research: Sarah Henry, Linda Christenson

The Domestic Policy AssociationThe Domestic Policy Association is a nonprofit, nonpartisanassociation devoted to raising the level of public awareness anddiscussion about important public issues. It consists uf’ a na-

tionwide network of institutions - colleges and universities. .

libraries, service clubs, membership groups, and civic orga-nizations - that bring citizcns together to discuss public issues.The DPA represents their joint effort to enhance what they al-ready do by working with a comnum schedule and commonmaterials. In addition to convening meetings each fall in hundredsof communities in every region of the country, the DPA alsoconvenes meetings at which it brings citizens and natiunul lead-ers together to discuss these issues and the outcome ot’com-

munity forums.Each year, participating institutions select the topics that

will be discussed in the issue furums. On hehalf of the Domestic

Policy Association, the Public Agenda Foundation - a non-profit. nonpartisan research and education organization that de-vises and tests new means of taking national issues to the public

- prepares issue books and discussion guides Cor use in theseforums. The Domestic Policy Association welcumes questionsabout the program, and invites individuals and organizationsinterested in joining this network to write tu: The Domestic

Policy Association, 5335 Far Hills Avenue, Daytun, Ohiu 45~29.

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Down on the Farm

" Despite record-highfarm subsidies, many

farmers are hav ingtrouble making end,meet. It is time toreassess the

government’s role. toshape a farm policythat balances relief forimmediate distresswith attention to long-term needs."

If you had been reading the St. Louis Pvst-Disputch in August1985, you might have noticed this unusual listing in the clas-sified ads, under the heading Business Opportunities: MoneyWanted: &dquo;Philanthropist sought. Young, productive, faithful

Illinois farm family looking for $400,000 at low interest to

consolidate deadly high interest loans. Collateral: $ l million

farm. &dquo;

The farm in question lies several hundred miles north ofSt. Louis, just a few miles east of the Mississippi. What is

striking as you drive through this area are the signs of abun-dance. The light of a late summer afternoon throws shadowsthrough eight-foot-tall cornstalks. Cows graze on summer greenfields that stretch to the horizon. The soil is almost unbelievablyrich. This is prime farmland, some of the best agricultural realestate in the world.

Looking for the farm of David and Anita Schroeder, younotice other mail boxes with the Schroeder name. As David

Schroeder explains, he was born on the farm and took it over

from his father, who some years ago took it over from his

grandfather. Farm life is all this family has ever known. Thereason David Schroeder placed the ad, he explains, is that he

wants the farm to stay in the family.In the 1970s, Mrs. Schroeder recalls, &dquo;We expanded when

the times were good.&dquo; That was when the world market for at UNIV N CAROLINA GREENSBORO on November 4, 2014bst.sagepub.comDownloaded from

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386

food was growing, when American farmers presided over whatwas proudly called the &dquo;breadbasket of the world,&dquo; when Sec-retary of Agriculture Earl Butz encouraged them to plant &dquo;fence-row to fencerow.&dquo; With some help from local bankers, the

Schroeders did just that. They expanded the farm, rented ad-ditional acres, and bought new equipment. At its peak, theirland - which is so fertile that it produces almost 150 bushelsof corn per acre - was worth $2,500 an acre. For years, thefarm provided a living for the Schroeders and their nine children.

Their troubles began with a severe drought in 1983. Butfarmers like the Schroeders are accustomed to the uncertainties

of the weather. What has really threatened the survival of theirfarm is a devastating combination of overproduction, saggingcrop prices, and soaring debt. It is a curious problem, and onethat offends most of our convictions about farm life and the

rewards of hard work. Quite simply, American farmers growmore food than anyone knows what to do with. Abundant har-

vests are one of the main causes of what is commonly referredto as the &dquo;farm problem,.&dquo; Too much food means lower prices.As farmers in this area will tell you, the corn, wheat, and soy-beans they grow now sell at a price 20 percent lower than it

was a year ago. That’s good news for consumers. But it’s badnews for farmers like the Schroeders. Moreover, lower market

prices mean that the government is obliged to pay more in

subsidies to assist farmers. That explains why, when the U.S.

Department of Agriculture announced in August 1985 thatAmerican farmers would harvest near-record crops of corn,

soybeans, and other products, there was little rejoicing on thefarm, and even less in Washington.

For the Schroeders, declining crop prices mean lcss in-come with which to pay off their debts. The problem is com-

plicated by falling land values: their 285 acres, which just a fewyears ago were worth $2,500 an acre, are now worth far lessthan that. Consequently, from the point of view of their banker,who regards their land not as soil but as collateral, the Schroe-ders are less credit-worthy. When they recently went to theFarmers Home Administration (FmHA)-a federal agency thatoffers loans to farmers who are unable to get credit elsewhere- they were told that they don’t qualify for an emergency loan.Last year, according to the Department of Agriculture, some43,000 U.S. farms were lost, almost 10 percent of them in

Illinois. The question now is whether the Schroeders, who areat the end of their financial rope, will join their ranks.

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It is particularly galling to farmers, who pride themselveson their independence, that their fate is determined by imper-sonal and distant forces like fluctuations in interest rates and

crop prices, or grain embargoes. But when a farm falls, its lossfalls directly and often very heavily on the farmer’s shoulders.Such pressures led recently to a tragic murder-suicide on anIowa farm. The next day, the local paper ran these words in aneditorial: &dquo;If there’s one thing that is clear, it is that the farm

crisis is not numbers and deficits and bushels of corn. It is

people and pride and tears and blood.&dquo;For their part, the Schroeders are still hopeful that someone

will respond to their appeal for help. &dquo;We feel that there’s some-

body out there,&dquo; says Mrs. Schroeder, &dquo;who would be willingto take a chance on us. We feel there’s somebody who still

believes in the family farm.&dquo;

Scratch a Farmer, the Community BleedsWhile the Schroeders’ plea is unusual, their plight is not. Ac-

cording to the Department of Agriculture, almost a third of thenation’s 630,000 full-time farmers are in danger of financialcollapse. Like the Schroeders, they face falling land values, at UNIV N CAROLINA GREENSBORO on November 4, 2014bst.sagepub.comDownloaded from

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&dquo;The Farm Belt doesnot took like abattlefield. but there isa war under B~aB there.What is beringcontested is the futureof American

agriculture. Sonic ofthe crucia) battle-, are

being fought on fertilefields handed downfrom parents and

grandparents.&dquo;-J Tl’Bl:rl’ B1.ld-..d~l:1l

low prices for their products, and monthly payments on debtsthat they can no longer afford. America’s heartland is in the

middle of what is commonly described as the worst period sincethe Great Depression. &dquo;~,~, ’

°

The farm crisis resembles nothing so much as the tornadoesthat sweep across the plains in midsummer, twisting as theygo, devastating some properties while leaving others un-touched. It is not at all unusual to find foreclosure signs on onefarm, while the neighbors on both sides are not only survivingbut prospering.

The farm crisis is everyone’s problem, and not just becausethere are economically troubled farmers in almost every regionof the country. Agriculture is the nation’s largest industry, far

larger than steel, automobiles, or any manufacturing sector.

Farming and food-related businesses generate one out of fivejobs in the private economy, and account for about 20 percentof the gross national product. Consequently, problems in the

agricultural sector soon catch up with the rest uf us.In states like Iowa and Nebraska, where at least half of

the jobs are tied to agriculture, it is commonly said that &dquo;when

you scratch a farmer, the rest of the community bleeds.&dquo; Thatis particularly true in certain industries, such as the manufactureof farm equipment. Over the past three years, tractor sales havedeclined by more than 25 percent, and the s;.rl~ of combines -which commonly cost more than $75,000 each - has declinedby half. It is estimated that some 80,000 jobs have been lost inthe farm equipment business alone.

Rural areas across the country feel the ripple effect of thefarm crisis, a ripple which wipes out three nonagricultural jobsfor every job lost in the agricultural sector. &dquo;Over the past six

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months,&dquo; said Senator Dave Durenberger (R-Minn.) in No-vember, &dquo;I have spent my weekends in outstate Minnesota. I

have been in towns like Fairmont, where every other storefrontis vacant, and Worthington, where 30 businesses have closedtheir doors since last January, and Madelia, which once had 15farm implement dealers and now has only one.&dquo; Recalling areport on the impact of the farm crisis in one rural community,Durenberger said: &dquo;The situation in rural America is much more

than a farmer’s crisis. It is a decline in the economic and social

base of our rural communities.&dquo;

With so many farmers seriously in debt, there is particularconcern about the hemorrhaging of the nation’s credit system.Most farmers are not in financial peril. But the 200,000 or sofarmers who are in financial distress pose a real threat to the

agricultural finance system. Altogether, those imperiled farmershold some $100 billion in shaky loans, which amounts to amajor debt problem for the country’s banking system. By 1985,agricultural banks accounted for two-thirds of all bank failures.Consequently, bankers as well as farmers are crying out forhelp.

Distress SignalsThose distress signals have not been ignored. Over the past twoyears the plight of farmers - the kind of story that does notnormally get much play in the national media - has been quiteprominent. Both Time and New~week have featured cover sto-ries proclaiming a farm crisis. TV networks and newspapershave carried stories from places like Fargo, North Dakota, andLubbock, Texas, about the distress of farmers, about rallies heldon the steps of state capitols and protests to halt farm foreclosuresales. Movies such as Country and The River have presentedthe farm crisis as compelling drama. In the summer of 1985and then again in 1986, dozens of rock and country musicianscame together to stage nationally televised benefit concerts calledFarm Aid. By now, few Americans could be unaware that some-thing is happening down on the farm that deserves our attention.

But it is far from clear what should be done about the farm

problem. Deciding what kind of help farmers should receive isquite a complex matter. In the words of a New York Times

editorial that appeared just after the first Farm Aid concert:

&dquo;Enthusiasm could easily turn to bitterness with the realizationthat Farm Aid can’t, and perhaps shouldn’t deliver the kind ofsalvation farmers want. The nation’s farm problem is the result at UNIV N CAROLINA GREENSBORO on November 4, 2014bst.sagepub.comDownloaded from

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390

of all-too-human politics and economics. Unfortunately, solv-

ing it isn’t necessarily compatible with solving the problems ofindividual farmers.&dquo; It is one thing, in the words of Senator

Tom Harkin (D-Iowa), to applaud efforts such as Farm Aid asa way to &dquo;focus attention on the fact that the old ways of helpingfarmers are not working.&dquo; It is another matter entirely to reachsome agreement about solutions that deal with the root of the

problem and not just its symptoms.

Farm Politics on Capitol HillFor 50 years, the United States has been struggling to do justthat, to define a farm policy which strikes the right balancebetween helping individual farmers and ensuring the prosperityof the American farm system as a whole. Every year since theGreat Depression, the government has helped many farmers bypromising to buy their crops if they don’t command a reasonableprice at market.. In addition, farmers receive government as-sistance in other forms, including favorable credit rates, exportassistance, tax benefits, and subsidized research. The needs offarmers have hardly been ignored. at UNIV N CAROLINA GREENSBORO on November 4, 2014bst.sagepub.comDownloaded from

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391

Can We Give Away theFood Surplus?The first Farm Aid concert. an effort tu help,trugglingfarmers. came hard on the heel% of Ihe Lme Aid conœrt

for African lamlne relief. The extent of [he famme prob-lem abroad was suggested by new, footage showing tensnf thousands of ~tarvlng African~. The idea that food ,ur-

pluses are a problem make, little sense In a world where

many arc still undernourished. It seems a, thou2h thm isline 01 the rare occasions when. by putting two prohlem,logether. we could u~lve them both.

Fur,umc years the United States has been the worldB

large,! food donor. providing more food assistance to de-

veloping nation, than all other countries combined. Butcould food donation programs he expanded to distributemost of the Ll S ,urplu,’ Thc evpe~neme of recent Near’.suggests (hat a nia,,si,6-c effort to redistribute American

food surpluses t, not the answer

Couldn’t we help American farmers by increas-ing the amount of food donated to needy peopleabroad?

Domestic t’arm ,urplu,cs could he reduced b~ gv ing awaygrain and other agnŒltural products. However. the morethat free lood is av allahle. the less other countries are mll-

ing to pay for American agnl:ultural products. By ,endingsurpluses to developing nation,,. we run (he risk of tlnvlngprices duwn, and hurting famten whu are already ,uller-

ing from low prices. What American farmers need is not

more mouths to feed. but more paying customers.

Wouldn’t increased food donations help peoplewho are hungry?In an emergency. such as severe tlootling or drought thatactually destroys tood supplies, food donations fromabroad arc an Important source of relief. But in most situa-

tions where people go hungry, there is no shortage of foodwithin a particular cuuntry. More often the cause of fam-Ine is poveny. the absence of transportation. or other fac-ton that keep hungry people from getting the food theyneed.

Don’t the people in many developing countriesneed what we have in American silos?

Unfortunately. much of the U ’*S. surplus is inappropriatefor countries in need. Most of the gram in Amencan silos,for example. s feed gram which is not suitable for humanconsumption. Our hybrids of rice and com are not of thesame quality as the traditional grams on which people In

Qend

other nations rely for their nutrition They rot eawlr. dan ’icook well when prepared in the traditional manner. andoften provide insuffment protein

Some people say that our food donations under-mine local efforts to solve their own problems.How does that happen?There m a lut of controversy over the effect of Amencanfood aid on receiving countries. Some critics charge thatmaswe donations of food. justified un humanitariangrounds, undermine the food system in the nations that re-ceive them. Dumping large quanmtes of tow-pricedAmerican eram in agncultural countries mal.es it difficultfor small farmers in those countries to make a profit. Inthis way. unimpeachable motives can lead to undeSirableresults.

Can anything be done for the undernourished indeveloping nations?When populations go hungry today, it is often because the

government has prevented people from feedmg them-selves. by disrupting civil life (as in KampucheaJ, Interfer-ing with the marketplace Ias m Ghana or by obstructingrelief efforts (as in Uganda and Eihiopia Where there arereal shortages. food donations can be helpful. But theyhave to be accompanied by other assistance to help thecountry improve its ability to transport and distribute food.Some people feel that extensive food donations are unwtsebecause they lead to dependency on Amencan food. Whatwe should do instead, they cunclude. is to help developingnations become more self-sufficient.

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392

Increasingly, however, the government’s farm program hascome under attack. Some people believe that these supports arepart of the problem, and that the government should take ahands-off approach to agriculture. For their part, many farmersregard themselves as the victims of misguided policies that re-sulted in high interest rates, low commodity prices, and de-clining foreign sales.

When the farm bill was up for renewal in 198 1, membersof Congress produced a bill they thought would cost relativelylittle and would send farmers to the market rather than to the

government to sell their crops. But the program turned out tocost far more than predicted. And the nation’s farm policy wasstill regarded by many as a program poorly matched to its

objectives.This past year, Congress tried to set a better course for

America’s farmers. Its goals were to make American farm ex-ports competitive again on the world market, and to reduce farmspending without pushing too many farmers over the brink.Finally, after months of debate, Congress produced the 1985Food Security Act, which represented a shift toward a moremarket-oriented farm industry. But not even its sponsors claimedthat the bill resolved the farm debate. Far from ending thatdebate, it underlined the questions that need to be addressed bycitizens and policymakers alike.

When a farm like the Schroeder’s is in trouble, how - ifat all - should we respond as a nation’? Is it a problem thatthere are I50,000 fewer farms than in 1981’? Perhaps, as someargue, we should regard that as the surest sign of the increasingefficiency of the farming industry, a sign to be applauded andencouraged in this industry as in others. The 1985 farm bill

favors the largest producers, and is likely to hasten the trendtoward fewer farmers. The question is what that means for thenation as a whole, and whether it is a desirable trend.

What is the government’s proper role here? Some peopleare convinced that government intervention itself is at the root

of the problem, and that our first goal should be to extricate thegovernment from agriculture. But that goal seems quite distant.The Reagan administration took office with the goal of reducingfarm aid, which in 1981 came to $4 billion. Yet this year farm

spending will exceed $20 billion. Under the new bill, recordamounts will be spent on farm aid over the next few years. Ata time when other necessities in the federal budget are beingcut back, are such large expenditures for the nation’s farmersjustified?

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393

Others are less concerned about the cost of farm aid than

with what it buys. We pay farmers not to produce under somecircumstances, and we are the only nation in the world to spendhuge sums of money to curtail farm output. Should we reversedirection and return to a market orientation? The new farm bill

represents a step in that direction. In the words of Daniel Am-

stutz, Undersecretary of Agriculture, &dquo;The farm bill recognizesthat it is markets, not government, that move farm products. It

puts farmers more in line with market realities than they’vebeen before.&dquo;

Should we accept the assertion that overproduction is thesource of the problem, that growing food is sometimes the wrongthing to do, and that a substantial number of the nation’s farmersshould be encouraged to find employment elsewhere’? That isa question, not a foregone conclusion, but it is a question thatdeserves thoughtful consideration. No one doubts that manyfarmers are in distress. Yet there is little agreement as to what

government should do about it. The debate has set urban againstrural legislators. It has set farmers against bankers, corn grow-ers against cattle raisers, large farmers against small. Both in

Washington and in state capitals, legislators hear public criesto do something about the farm crisis. But while many are eagerto help, few are willing to raise taxes to do so. In the absenceof any consensus about what to do, it is difficult for policy-makers to chart a clear course.

Now that there is widespread recognition of the farm prob-lem, it is time for informed debate about the nature of the prob-lem, and our options in addressing it. The discussion should beabout the kind of farm sector that best serves the nation’s in-

terests, about a farm policy that balances relief for short-termdistress with attention to long-term needs.

Which Direction for Farm Policy?Our purpose here is not to provoke discussion about details suchas price supports, or what mechanisms the government mightput into place to assist financially troubled farmers, but ratherabout which direction farm policy should take. In the followingchapters, we present four different perspectives on the issue,four distinctive ideas about what should be done.

As we will see in the next chapter, some argue that the

principles on which the original farm programs of the 1930swere based are still sound today. They believe that farmersdeserve special assistance because they represent a vital part of

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Page 13: Down on the Farm

394our economy, one that is inherently unstable, vulnerable to fac-tors over which farmers have little control. They justify con-tinued subsidies to many farmers on the ground that this policyhas been successful for years in guaranteeing an abundant foodsupply at modest prices.

Those who take a second position feel that farm programsdesigned to respond to the problems of the 1930s are inappro-priate today. In many cases, current programs give more helpto large farmers than to any others. They argue that our goalshould be to help small and medium-sized farms that are in

trouble in order to achieve a diverse farm sector and to preservethe fabric of rural society.

Proponents of a third position, the free market position,insist that it is unacceptably expensive to treat agriculture as a

special case. Government management of agriculture is both

unfair and unsound. In the long run, no one benefits by buyingup surplus food or paying farmers not to produce. The key toa more successful farm sector, they feel, is reduced governmentintervention.

Finally, proponents of a fourth position take issue withsome of the assumptions of each of the other positions. Theyargue that American agriculture is overly dependent upon ex-

pensive machinery and chemicals, and the high cost of theseproducts explains why so many farmers are having trouble mak-ing ends meet. In their view, if the profit motive alone guidesthe nation’s agriculture policy, we will end up depleting the soiland squandering resources on which future generations of farmersmust depend.

These are not mutually exclusive proposals. But they aredistinctly different views of the farm problem. Each of thesechoices would impose certain costs and would favor certainkinds of farms. Each embodies a distinctive view of what is in

the public interest. Each represents quite a different perceptionof what the future should hold for the nation’s farmers.

&dquo;The great firmdel)ate raisesfundamental questionsabout the governmentsrule and how far weshould go as a nation in

°

responding to thedistress of farmers. Atthe heart of this debatearc quite differentperceptions of the kindof farm sector weshould he trying toachieve over the longrun.&dquo; at UNIV N CAROLINA GREENSBORO on November 4, 2014bst.sagepub.comDownloaded from