MPR: Is The Farm Crisis Really A Disaster?

Is The Farm Crisis Really A Disaster?
By Mark Steil
September 2, 1999
Part of MPR Online's Trouble on the Farm series.

In what could be a first-in-the-nation attempt, federal officials may ask that Minnesota be declared a farm economic-disaster area. At a meeting in North Mankato yesterday, the U.S. Agriculture Department's State Emergency Board was told thousands of Minnesota farmers likely will be forced out of business in the next year because of low grain and livestock prices. USDA officials say a disaster declaration would serve as an alarm to the nation that farmers need help.

USDA OFFICIALS RELEASED a mountain of statistics in North Mankato gleaned from a county-by-county survey of farm economic conditions. The data was gathered to see if the cumulative effect of prolonged low commodity prices could warrant a disaster declaration. The department's top Minnesota official, Tracy Beckman, said the survey's most important conclusion is that the worst is yet to come.

Beckman: We see a very serious crisis coming with our farmers. And I think the numbers we're going to present today will certainly back that up.

The USDA survey estimates eight percent of the state's farmers could be forced out of business in the next year - about 7,000 farms. The average loss for the '90s so far has been about 1,000 farms a year, many because of retirement and other non-economic factors. The USDA also estimates eight percent of the state's cropland was not planted this year because of wet field conditions or because financially strapped farmers could not afford to plant them. In waterlogged northwest Minnesota alone, the USDA'a Bob Vaughn says almost a fifth of the normal farm acres will not produce a crop this year.

Vaughn: A lot of that was up in Roseau County and up in that north area where they never got in the field. The majority was not planted due to flooding, some were not planted because of economic conditions.

Critics of government farm aid have said in the past that any USDA information is suspect, because it has an entrenched bureaucratic interest in overplaying farm problems. The USDA's Beckman says his employees know what's going on in the farm community and called the survey the most accurate and timely information available. He said so many farmers may go out of business in Minnesota and the rest of the nation that he's concerned there could be disruptions in the U.S. food supply.

Beckman: What's going to happen to our food-security source and the whole marketing system and the processing and, in fact, does it put the state and the country in some sort of risk? Similar to if there was, as the board normally would be doing, looking at natural kinds of disasters, be it flood or some sort of attack on the country.

Beckman says that sort of scenario warrants an economic-disaster declaration, something he says the board may ask for in the next few weeks. He says the disaster request would be sent to Governor Ventura. If the governor approves, it would go to U.S. Agriculture Department Secretary Dan Glickman for final consideration. Beckman says no state has ever asked for an economic-disaster declaration, but he believes there's enough leeway in the regulations governing those declarations that Glickman could approve it. If he does, farmers would be eligible for low interest emergency loans. Beckman admits those loans likely would not save any farms and says the real goal of a disaster declaration is to influence congress.

Beckman: By gathering the data that we are and passing it on to policy makers, we're hoping that that will impact policy. And I think what frustrates me is there out in Washington right now deciding how they're going to spend $8 billion of more farm aid, without the data.

Congress is expected to resume its consideration of emergency farm relief when it returns from its summer break next week. The senate already has agreed to $7.4 billion in aid, the house has not committed to a number. The request for a disaster declaration in Minnesota could be ready in two weeks.

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