European Stars And Stripes (Newspaper) - March 24, 1985, Darmstadt, Hesse                                Shake continued from Page 13 plies and operate such sources Are they include the Farmers Home whose agents Are already flooded with and sup who Are already they by Large Over due agricultural experts say that the worst of those debt problems arc concentrated among a group that includes Middle size family operations with few outside sources of those above that the very Large farms with sales of More than a year and nearly half of All farm arc doing very according to Marvin vice president and agricultural economist at the Federal Reserve Bank of Kansas the million with a year in sales or tend to be Par time farms with Cash needs provided from outside the seeds of today problems were sown in the with exuberant expansion based on rising land Loans follow ing the removal of american barriers to Grain Trade with the soviet a devaluation of the Dollar and explosive de Mand for suddenly cheap american agriculture department officials urged Farmers to Plant from Fence to and Bankers with Money to lend urged them to total land used for crops was expanded by 54 million acres from 1969 to 1981 and techniques were Corn for which totalled Bil lion bushels in had grown to billion bushels by foreign production also expanded and american surpluses depressed farm in has depressed land leading Bankers across the farm Belt and their examiners to demand either repayment of Loans or additional the credit problem is according to Delmar president of the farm credit coun As interest rates Rise for a major portion of farm even As the rates fall in other economic Sec the Council represents the Federal farm credit which includes production credit Banks for cooperatives and the Federal land the Federal land Banks hold nearly half of All land mortgages and nearly 25 percent of All farm the credit associations lend More than 18 percent of the operational funds borrowed by farm clients of commercial Banks and the farm credit a network of cooperative tend to be the most creditworthy their officials yet recent increases in the rates charged by the farm credit system Are largely a result of an in creasing delinquency rate on its Banner in a fou state Region headquartered in for where the delinquency rate among borrowers from the Federal land Bank Rose last year to percent from percent the year the inter est rate on land mortgages was raised 1 from to some Banks Are saying they Are in the Best shape in five but there Are hot said one of those hot spots is the in congressional Paul chair Man of the Federal Reserve was asked about the health of Banks in depressed agricultural he said that most such Banks were quite Well capital although about 30 had failed last troubles Are broader among another set of according to the latest available among the borrowers from the Farmers Home agriculture Lender of last a total of or 35 were delinquent last june on their repayment data Are piling up in support of the Bankers a a comparison of interest rates averages for each year except which is the rate As of other Farmers Home administration rates Are for operating Bank Loans to Home real estate Home rates 1985 sources agriculture Wharton econometric forecasting associates new study indicates that nearly a third of american farms have debts equating More than 40 percent of their under current Many agricultural economists debt Levels above 40 percent raise questions whether the borrowers can the a cooperative Effort by the food and Agri cultural policy research Institute and the farm a leading agricultural also indicates that nearly half of that percent of the Are in a More deeply troubled owing debts equating More than 70 percent of their the Institute is a congressionally financed research organization with branches at the University of Missouri and at Iowa the study results Are scheduled for publication in the farm the study provides no data on land but it shows the most troubled 33 percent of Farmers with debts averaging each and owing 65 percent of All but other evidence indicates that the about May hold at least 15 percent of the 373 million acres now used for crops and if the study is Farmer ownership or 56 million acres of tilled land May now be in the study and other data have led Abner an Institute to predict barring either a dramatic change in farm incomes or vast Feder Al at least 20 percent of today Farmers will lose their land Over the next three leading to an upheaval in Rural America unseen since the depression of the the study indicates that the greatest of those prob lems Are concentrated in the Middle West and especially among younger its figures for the Central composed of Ohio and indicate that Farmers up to 35 years old have debt averaging 63 percent of their that those 35 to 44 years old have 61 percent and that those from 45 to 54 years old have debts averaging 46 the study was based on a Survey using questionnaires mailed to commercial Farmers selected from a list of million maintained by the farm a total of the journal then checked the respondents against a computer profile of Farmers on the the results indicated a possible error rate of about 2 the results tend to confirm a review by Neil Harl of Iowa state of statistics collected last fall by the Iowa crop reporting but they vary from a report in Early 1984 by the Federal Reserve which showed 19 percent of Farmers with debt of More than 40 percent of one Thomas chairman of the Independent Bankers offered another we Are he that 5 to 8 percent Are not going to be Able to continue farming and that another 5 to 10 percent Are not going to be Able to continue unless the administrations credit plan is Olson was referring to a proposal by the Reagan administration that Bankers reduce selected Farmers debt costs by at least 10 percent in return for Federal guarantees on 90 percent of the debtors remain ing Many Rural Bankers say that to reduce their charges to Farmers on the scale required to provide the Relief they need would weaken their own their problems Are compounded by nonperforming Loans and made worse when they take Over land for nonpayment of Bankers land values have fallen by 37 percent since their Peak and by 19 percent in the last year according to the Federal Reserve Bank in Kansas Congress debates new course for farm policy not route to k3uuabrngr Nyji Drinkard associated press Congress has set out to Chart a new course for farm policy one that could mean Radi Cal changes in the system that has made americans the bested people in the legislators must thread their Way through intense and competing concerns the need to rein in dangerously High Federal deficits and the cry by thousands of threatened Farmers for increased government underlying the months of debate will be a Central question have the farm Laws written since the Days of the new Deal gone too far in enticing investment in agriculture after 50 is it time for the pendulum to swing Back president Reagan and some congressional Republican leaders believe it the Bottom line the government cant Gua Rantee Success for said Senate majority Leader Robert As a representative of the nations largest wheat producing is Well aware of the growing dropout rate in its been going on for 40 i dont believe we can Stop the maybe we can slow but i dont think theres any program i know of that can assure people they dont have to leave the Reagan has submitted to Congress a blueprint for drastic a 15year plan that would be almost a col Turkey cure for farming dependence on govern ment his aim is to Force whose Over production is to take their planting cues from the not the that would be done Over five years by dropping the current Price floor from the major Cash crops Cotton and the current farm written in expires but some in hearing anguished pleas from have served notice they will not go they argue that whatever the merits of returning to a mar Ket oriented farm to undertake it now would severely disrupt americas food the critics say the Market oriented program would immediately Cut commodity a blow that would fall hardest on the medium sized operation that lawmakers like to Call the family those farms Are not doing Well the agriculture department says that of medium sized those that sell to Worth of products each year and make up the Backbone of commercial on third will suffer some financial difficulty this an estimated Are or soon will because of High interest rates and plummeting values for their land and House agriculture committee chairman Kika de la said current programs would work if they were properly the so called marketplace that they talk that can Only be achieved in a Complete Only in the said de la he noted that All major industrialized countries subsidize their Mun in higher Levels than the United few will dispute that farm which have changed Little since they began five decades have achieved their social agriculture department figures show that in the Early part of the 20th Farmers were the poor cousins of City residents their average income was one third of the National Many were unable to afford to buy the land they by Farmers had largely achieved earning an average of although much of it from off farm As farming became More financially incentives to investment and production farms got bigger and crop surpluses depressing under Price support the government bought much of the government costs for subsidies and other programs to Benefit farming climbed to a record fou year total of billion during reagans first of the million farms in Only million but on each of today Farmers produces eight times the amount his Grandfather that surplus is the heart of today proposed answers to the surpluses Are nearly As numerous As the interests that make up the nations diverse farm and each has its own reagans and that of Many agribusiness lobbyists and commodity is to increase but economists note that much of the third world where the greatest potential for new sales lies is suffering from recession and Cash Export subsidies could help sell but at the risk of starting a Trade War with other producer others would like to Sec american Farmers forced to curb believing that would boost prices for All at a Low Cost to the still others advocate subsidies for family size or a two Price system with High Price supports for Domestic consumption and lower prices on goods destined for if nothing can be agreed current programs could simply be kept we May be faced with a situation where we cant afford to do what we know we ought to do begin the process of withdrawing some of the government re said Gene a senior stuff member of the Democrat controlled House agriculture it May be cheaper to continue As frustrating and expensive As that May because of the enormous potential social Cost of a widespread shakeout in Agricula such As say farm policy itself will make Little difference if something int done to alleviate broader economic ills the Federal High interest rates and the High value of the Dollar in International the groups interested in the farm Bill include commodity groups not As directly affected As grains and Dairy Church groups interested in world conservation groups and Grain exporters and chemical Manu and two political More than half the 22 Republican senators up for re election in 1986 Are from slates heavily dependent on democrats will keep farm issues highly Page 14 the stars and stripes March the stars and stripes Page 15