DOCUMENT RESUME
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AUTHOR Lasley, Paul, Comp.; And Others TITLE Farm Crisis Response: Extension and Research Activities in the North Central Region. INSTITUTION North Central Regional Center for Rural Development, Ames, Iowa. PUB DATE 86 NOTE 73p.; A network organized by Paul Lasley and Rand Conger, Iowa State University. PUB TYPE Guides - Non-Classroom Use (055) -- Collected Works - General (020)
EDRS PRICE MF01/PCC3 Plus Postage. DESCRIPTORS Agriculture; Community Action; Community Problems; *Economic Status; Extension Agents; *Extension Education; Family Problems; *Farmers; Higher Education; Institutional Role; *Land Grant Universities; Program Descriptions; Program Effectiveness; Regional Characteristics; Regional Programs; Rescrch Needs; Responses; Rural Areas; *Rural Extension; Stress Management IDENTIFIERS Cooperative Extension Service; Economic Impact; *Farm Crisis; Illinois; Indiana; Iowa; Kansas; Michigan; Minnesota; Missouri; Nebraska; North Dakota; Ohio; Response Patterns; South Dakota; *United States (North Central); Wisconsin
ABSTRACT The 12 states comprising the North Central Region have been affected in similar ways by the farm crisis of the 1980s. Statewide surveys show sizeable proportions of farm operations that are experiencing moderately high levels of financial stress. The problems caused by chronic stress on family structure and functioning, the loss of mainstreet businesses, and bank closing are felt throughout the region. The Cooperative Extension Agencies in the states have approached the problems in similar ways. They have developed new programs with long- and short-term efforts, and they have adapted existing programs with short-term or temporary activities and long-term commitments. Extension has been most heavily involved iu developing new, relatively short-term programs such as the use of hotlines, crisis intervention teams, and bankrupcy or bank closing response teams. New long-term programs include projects and research designed to achieve economic and agricultural diversification. The addition of resources to the existing farm management programs is a good example of an existing short-run program. Many existing, long-term Extension and research programs have been helpful in meeting immediate needs. This document provides 12 papers summarizing the farm crisis and programs designed to deal with it in each of the North Central states. Research needs are enumerated. (JHZ) *********************************************************************** Reproductions supplied by EDRS are the best that can be made from the original document. *********************************************************************** C N 4O Co C L I Farm Crisis Response: Extension and Research Activities in the North Central Region
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The North Central Regional Center for Rural Development
Iowa State University
BEST COPY AVAILABLE Farm Crisis Response: Extension and Research Activities in the North Central Region
A Network Organized by Paul Las ley and Rand Conger, Iowa State University
cl C:1 ni
Cgo 9 EA The North Central Regional Center for Rural Development
CD 1968 CM C) ECil 3 Contents
Contributors iii Missouri Extension and Research 37 Activities in the Rural Crisis Foreword iv John T. Pelham and Judy Heffernan
Summary and Conclusions 1 Short-term and Long-term Approaches42 Paul Las ley, Rand Conger, Curtis Stofferahn to Easing the Farm Crisis: The University of Nebraska's Response Extension and Research Programs 5 Deborah Rood and John De Frain on Rural Financial Stress in Iowa Kathleen Beery and Robert W. Jolly Coping with the Farm Crisis 50 in North Dakota Illinois Extension and Research 14 F. Larry Leistritz, Arlen Leholm, Response to the Farm Crisis and Harlan Hughes H. J. Schweitzer Ohio Farm Financial 53 Farm Crisis Response: Indiana 19 Management Programs Extension and Research Activities David R. Miskell and LeRoy Hushak David C. Petritz and Dixie Porter Johnson Responses to Farm Crisis by 57 Farm Crisis Response in Kansas 22 South Dakota Institutions William M. Eberle and S. L. Ward Ardelle Lundeen
Responses to the Farm Crisis: 26 Farm Crisis Response: University of 61 Michigan Report Wisconsin-Madison Extension and Research Julie Hales Jess Gilbert and Glenn S. Thompson
Project Support Tackles Rural 32 Problems in Minnesota Kathy Mangum
a 4 Contributors
Kathleen Beery, Assistant State Leader, F. Larry Leistritz, Professor of Agricultural Cooperative Extension Service, Iowa State Economics, North Dakota State University University Ardelle Lundeen, Professor of Agricultural John DeFezin, Associate Professor of Family Economics, South Dakota State University Studies, Department of Human Development and Family, and Researcher, Agricultural Research Kathy Mangum, Coordinator, Project Support, Division, Institute of Agriculture and Natural University of Minnesota Resources, University of Nebraska-Lincoln David R. Miskell, Associate State Leader, William M. Eberle, Assistant Director, Community Agricultural Industry, The Ohio State Development, Kansas State University University Cooperative Extension Service John T. Pelham, Associate Director, Missouri Jess Gilbert, Assistant Professor, Department of Cooperative Extension Service, University of Rural Sociology, University of Wisconsin- Missouri and Lincoln University Madison David C. Petritz, Professor of Agricultural Julie Hales, Evaluation Specialist, Michigan Economics, Extension Specialist, Purdue State University University
Judy Heffernan, Research Associate, Rural Deborah Rood, Communications Associate, Managing Sociology, University of Missouri for Tomorrow Program, Department of Agricultural Economics, University of Nebraska- Harlan Hughes, Extension Livestock Economist, Lincoln North Dakota State University H. J. Schweitzer, Assistant Director, Agriculture Leroy Hushak, Professor, Agricultural Economics Experiment Station, University of Illinois at and Rural Sociology, The Ohio State University Urbana-Champaign
Dixie Porter Johnson, Associate Professor of Glenn S. Thompson, Assistant State Program Consumer Science and Retailing, Extension Leader, Agriculture and Agribusiness Program, Specialist, Purdue University University of Wisconsin-Madison
Robert W. Jolly, Assistant Dean of Agriculture, S. L. Ward, Director, Kansas Farmers Assistance, Iowa State University Counseling, and Training Service, Kansas State University Arlen Leholm, Extension Farm Management Economist, North Dakota State University
UI 5 Foreword
The magnitude and speed with which the In mid-February, 1986, the network met for present farm crisis has hit the midwestern states two days in Des Moines to review and evaluate the is perhaps unparalleled. The depressed financial involvement of each North Central institution in and economic condition of agriculture in the helping meet the farm crisis. A goal of this North Central Region is well documented. How the project was to explore and stimulate mutual farm crisie affects rural communities and rural interest in those areas where collaborative residents, especially farm families in the Efforts between the North Central land-grant region, is generally less well documented and universities might be possible. As the farm understood. Because of the severe consequences crisis broadens into other regions of the United of the farm crisis and the need for the States, we feel that many of the lessons the land-grant university system to respond to this North Central states have learned may benefit new set of conditions, the North Central Regional those in other regions. As one reviews the Center for Rural Development provided funds to responses of each institution, it is evident that bring together a group of Extension personnel and the magnitude and the consequences of the farm Agricultu.al Experiment Station scientists to crisis in regard to rural life has been examine and compare how the various land-grant dramatic. institutions in the North Central region are responding to the needs of farmers and rural The follrwing reports were written to share communities experiencing the present changes in with others the diversity of Extension and agriculture. Specifically, the objectives of the research activities. The authors were asked to Farm Crisis Network ince (1) to review the limit their reports to 10 pages; thus the activities of the land-grant universities in the chapters are overviews or summaries of the North Central region designed to help activities. individuals, families, institutions, and commurIties adjust to the new economic climate; Many observers have noted that the farm and (1) to identify areas needing additional crisis has often resulted in families and research and resources. communities "pulling together."The cooperation of the Experiment Stations, Extension Services, In talking with individuals from around the and the network representatives in the North region, we became aware that many land-grant Central region is evidence of a definite pulling Universities were developing ameliorative together. We believe this volume contains the programs on their own and that there was a reed most current and comprehensive listing of the for researchers and Extension staff to exchange activities that have been initiated within the program ideas to estimate program effectiveness, land-grant universities. and to communicate appropriate research findings. The project identified key individuals from each of the 12 North Central land-grant universities Paul Lesley who were knowledgeable about both the research Rand Conger and Extension programs that had been initiated in Curtis Stofferahn response to the farm crisis.
The task proved to be a difficult one because of the number of people who are involved in each of the states. The Extension directors and Agricultural Experiment Station directors were each asked to appoint a person to serve on the network. Without the directors' cooperation and support this project would not have been possible. The network participants who wrote and presented reports often relied heavily on the work of colleagues and peers. We certainly appreciate the cooperation of all who shared their ideas and data with this project.
6 iv Summary and Conclusions
The authors of individual reports in this 5. Closely related to the issue of societal volume note that farming has traditionally been a definition that there are victims high risk enterprise. The analysis of present deserving of public support is the added prc;lems must recognize that the history of rural burden of identifying the victims. In society and farming is characterized by crisis. many previous agricultural crises, it was A theme of env'xonmental challenges pervaded such relatively simple to identify the victims. of the westward settlement--droughts, insects, They were the people who lost their crops disease, and other natural disasters. The early or had experienced another significant 20th century has experienced, also, economic loss. Victims of these crises were crises. The 4gri, tural stagnation in the generally quite visit e and there was 1917-1920 period was closely followed by the public agreement that they needed and Great Depression. These periods of economic and deserved help. In the current economic natural crises might have accustomed farm people downturn, it is very difficult to identify to misfortune. Yet the relatively stable period those who are being adversely affected from the close of World War II to the early 1970a from those who do not need assistance created a false sense of security prior to the unless detailed financial information is period of great expansion in the mid-to-late available. 1970s which abruptly ended in the early 1980s and led to the present crisis. 6. Another important dimension of the farm crisis is the problem that the victims are Unlike previous periods of economic in different stages. Some farm families hardship, the farm crisis of the 1980s is unique were adversely affected four or five years in a number of important ways that makes ago, while others are just now being tnterventton difficult. Some of the unique impacted. Intervention strategies must features of the farm crisis identified by the recognize the subtle but Important network participants include the following: differences among farm families.
1. There is a lack of consensus that there is 7. The diversity of victims in terms of farm a crisis. Extension has placed effort size, enterprises, geographic location, into educational activities designed and in terms of family characteristics specifically to raise awareness of the such as number of children, stage in life magnitude of the problem and its likely cycle, level of education, and so on consequences. In many areas some people further complicates intervention still deny that a farm crisis exists. strategies.
2. There is a lack of understanding 8. And finally, it is important to recognize concerning the crisis' dimensions and that while the farm problem has been magnitude. Unlike many disasters in called a crisis, it is necessary to farming where the consequences are readily recognize that it is a chronic condition. visible and can often be objectively Normally, crises are define as short-term, assessed, such as number of acres lost, traumatic events, contrary to the number of diseased livestock, and so on, long-term problem we face today. Already it is very difficult to obtain objective the farm crisis has existed four or five indicators of the extent of current years, and recent estimates project that difficulties. it will continue for another four or five years. It is quite likely the events we 3. The problem of labeling the crisis springs have called farm crisis may last a decade from the ambiguity of its causes. The or more, which suggests it may become a farm crisis means different things to chronic problem. As a result, different people and is referred to as a intervention strategies must be able to farm, a rural, an agricultural, or a respond both to immediate, short-run needs credit crisis. that develop as well as to the longer term problems that emerge. 4. There is a ,lck of agreement concerning the true victius of the crisis. Often those being adversely affected are viewed Continuities of Concern as "high rollers" or "poor farm managers." The "blaming-the-victim" syndrome is an The uniqueness of the present economic element often identified in various types difficulties in agriculture is reflected in the of crisis. Because there is no consensus chapters in this volume. Each of the authors that certain farm families are victims of describes a very similar set of problems events beyond their control, response resulting from this extraordinary situation. efforts have been hampered or delayed. Many authors report the results of statewide Previous difficulties in agriculture surveys that show sizeable proportions of farm typically did not have to overcome this operations that are experiencing moderately high hurdle of convincing the public that it is levels of financial stress. The magnitude of the tndeed a crisis situation. financial problem is roughly the same across the North Central states. Each of the authors report on growing incidences of familial and community
7 problems that have been ::iggered by the economic individuals and communities adjust to the upheaval. economic realities of the depressed agricultural economy. Much of what the authors describe can be portrayed as the ripple effect of the fare crisis. The farm crisis has ever-widening Existing, Short-run Program (Cell 3) circles of consequences. The problems of chronic stress on family structure and functioning, the Within existing Extension and research loss of mainstreet businesses, bank closings, and programs, new resources have often been provided the toll on community services and facilities are for renewed emphasis or reinforcement of included in the ripple effect. continuing efforts. Perhaps the best example of efforts falling into this area is the financial While the L2 North Central states each have counseling that is a part of the farm management approached the set of problems a little programs. Each of the states has had a sustained differently, there are many similarities tn their commitment to farm management; however, with the responses. Some of the activities are new onset of the farm crisis, resources have been program thrusts with planned terminations (Cell added to handle the increased demand for farm 1), other programs are new directions but are financial counseling. Each of the states has viewed as long-term efforts (Cell 2). Within developed short-run programs to respond to the existing programs, some of the responses are needs for financial counseling. Generally it was viewed as short-run or temporary activities (Cell felt that these programs would be continued tn 3) that are part of a long-term commitment to the the future; but, as the demand for them wanes, program area (Cell 4). the programs would be folded into continuing farm management activities. Similarly, several states have redirected their stress research and Program Thrust Extension programs to fit the uniqueness of the farm crisis. The farm stress thrust, however, is generally thought to be a part of the continuing New Existing program effort.
Short Run Cell1 Cell 3 Existing, Long-run Programs (Cell 4)
Cell2 Cell 4 The reports include a wide breadth of Long Run continuing, long-run Extension and research efforts that have been helpful in meeting short- run and immediate needs. Many states have been able to dries, upon existing Extension and research New, Short-run Programs (Cell 1) knowledge in designing intervention efforts. It is essential that existing thrusts in home Extension has been most heavily involved in economics, agriculture and natural resources, responding to the farm crisis in new program community resource development, and youth be efforts, many of which are being viewed as continued. relatively short-term efforts that eventually will be terminated. Many of the activities in There are numerous examples of creative this model are emergency or intervention responses to the farm crisis which combine strategies which have been designed specifically elements of Extension and research. In many for unique problems stemming from the farm cases, there are examples where inter- program crisis. Strategies such as the use of hot lines, teams have been formed to develop broad based crisis intervention teams, and bankruptcy or bank responses to diverse needs. Numerous examples of closing response teams would fall within Cell 1. states' responses highlight the benefits of the inter-program efforts. Another similarity across many of the activities has been inter-agency New, Long-run ;rogram (Cell 2) cooperation and the involvement of other groups with land-grant personnel. Extension personnel In several instances, states have initiated and agricultural scientists have frequently new programs which are viewed as long-run involved state and federal agencies, farm efforts. Included in this cell would be new organizations, churches, voluntary organizations Extension projects and research designed to and local leaders in developing appropriate achieve economic and agricultural responses to unique needs of subgroups. diversification helping displaced families find new careers, and other such efforts to which a multi-year commitment has been made. Several Reconbandationo new, long-term programs have been initiated or are being planned to address the long-term One of the great difficulties in developing implications of the current crisis and to help an effective response to the current downturn in the rural economy has been our lack of knowledge about the nature, course, and individual adaptations (successful and unsuccessful) to previous crises of a similar nature. While there
2 are unique features in the current situation, How can volunteers, local leaders, and economic cycles are a repetitive part of rural visitation teams be used to achieve history and, just as we are likely to recover local development? from the decade of the 1980s, there will be other economic reversals in the future. The failure to 4. How can small business development be systematically study individual, family, promoted? community, state, and regional adaptations to the economic difficulties of the 1920s and 30s left How can "entrepreneurship" be us with few skills in our repertoire of developed? idterventions to meet the current crisis. We Is retention and expansion of local need to immediately develop comprehensive business a viable strategy and how can programs of applied and basic research to Improve it be developed? our understanding of which strategies at the Is economic development and individual or community level lead to the most diversification a viable strategy and successful outcomes in response to rural economic how should it be promoted? hardship. Such research has important How can and how should small business implications for the present as well as for Management skills be improved? future fluctuations in economic conditions. 5. How can profitability in agriculture be To assist in effective planning for such regained? future research and programming, in additionto describing the activities their states have How can the input factor mix of capital, .nitiated, the participants were askedto labor, and management be used more identify future research and Extension efficiently? priorities. Just as rural communities were Can export markets be expanded and at ill-prepared to adjust to the economic upheaval, what cost to farmers? researchers and Extension staff have often found How can we increase the value added an "empty cabinet" when they have gone to their component of agricultural commodities? "tool chest" for answers about specific questions. The farm crisis has brought new 6. What will be the impacts of technology for challenges to the land grant system. But it has rural communities and the structure of also unearthed many important research and agriculture? Extension questions which can be viewedas opportunities. There are many fruitful areas of Will biotechnology only add to our inquiry identified by the network members. already existing problems of Listed below is a summary of their overproduction and overcapitalization? recommendations for future research and Extension program focuses. 7. How can communities adjust to the new economic conditions? 1. What can be done to ease the transition of the displaced farm families? How can the community population be retained? What coping skills are needed? How can local employment opportunities How can career options be identified? be expanded? How can large numbers of displaced How can chronic poverty be alleviated? farmers be retrained? How can the emergence of social problems How do family ties and relationships be effectively addressed? facilitate successful transitions? What are transition paths of displaced 8. How can local leadership be developed to farm families? address the new economic conditions?
2. What are the policy linkages between the What can local leaders do to promote farm crisis with international and agricultural development? national decisions? How can intra-community linkages be used to promote regional development? What role should Extension perform in Can Extension address the type of public policy education and structure of agriculture rural areas formulation? want through leadership development? What will be the impact of the changing How can leadership development promote structure of agriculture on rural local economic viability? communities? What part should leadership development How can we assess the consequences of play in public policy education? policy choices? 9. How can Extension increase its outreach to 3. What can be done to promote community new audiences? viability? What techniques can Extension use to What is meant by a viable community? reach new clients? What is needed to achieve a viable How can Extension make use of community? volunteers?
9 3 What creative delivery methods can Extension use?
10. What are our professional responsibilities as Extension personnel and Experiment Station researchers?
What should be our role as professionals in Cie context of the farm crisis? Do we help advocate, adjust, ameliorate, or cope? Where do our professional obligations lie? What goals should guide our research, programs, and policies?
11. How can we help farm families to cope with financial difficulties?
What are effective intervention strategies? What are effective delivery systems?
12. How do we measure program effectiveness?
How should programs be evaluated? How should program evaluation be built into existing and new programs?
Each of these topics have important research and Extension components. While this is undoubtedly an incomplete listing of the issues, the Farm Crisis Network participants felt these were some of the major issues that will confront rural America well into the 21st century. If you have an interest in developing an Extension or research project on one of the many issues identified by the network, you are encouraged to contact the members.
The future of the term economy is uncertain, but the future of the land-grant syste ests upon our ability to respond to the need!: of our client groups. This project hopes to stimulate further collaboration and dialogue on the important transition underway in American agriculture and rural communities.
4 10 Extension and Research Programson Rural Financial Stress in Iowa
by Kathleen Beery and Robert W. Jolly
CURRENT CONDITIONS went off-farm work opportunities and a rural payroll. Mainstreet businesses that geared up Financial conditiocl of Iowa farmersin 1985 during the 1970s boom needed management conformed closely to national averages. assistance just as farmers did to adjust to lower Approximately 30 percent of farmers were sales and greater debt service. Declining tax experiencing financial stress--cash-flow revenues and increasing demands for social problems, sharp losses in net worth, and assistance caught community officials and leaders reductions in standards of living.This group of in a cost/price squeeze farmers would readily financially stressed operators controlled more recognise. than two-thirds of the outstanding farm debt. Information on Iowa farm financial conditions is The financial impacts on communities and given in Table 1. Recent research indicates 15 farms have created tremendous problems for the to 20 percent of Towa's agricultural assets will individuals and families involved. Increasingly, be liquidated, as farmers either restructure families have experienced despair as they their businesses or fail and leave thesector. attempted to save their farms and rural way of The total lose in commercial farm operations life. The uncertain future in agriculture has could be as high as 25 percent per year. If caused stress and anxiety for nearly all Iowa asset markets function at their historical rate farmers. of 2 to 4 percent, financial stress may continue until the end of the decade.This adjustment Family and individual problems have been process would be accompanied by direct financial evidenced in many ways. Farm family members losses to lenders and agricultural businesses expressed concern about their increasing levels that had extended credit to farmers. In turn, of stress in an Iowa State University farm poll. mainstreet businesses and local governments would The following statistics pertaining to use of experience the impact of reduced income and tax human services indicate increasing problems for revenues. rural families:
Respondents in a random survey of NERDS AND PROBLEMS OF FARM FAMILIES AND RURAL approximately 1,800 farm families in the COMMUNITIES Iowa Farm and Rural Life Poll (Lasley, 1985) indicated that stress had become an everyday rarm families, when faced with rapid and problem. Increased levels of stress were unexpected economic change, may require felt by seven out of ten respondents in the assistance. Farm businesses must be adjusted. last three years. About 60 percent said The management changes may be relatively modest-- they experienced either a great deal or some improving cost control in certain enterprises--or stress every day. A majority were they may require extensive financial moderately or very concerned about their restructuring--selling assets, renegotiating land personal stress levels. contracts, or obtaining off-farm work. These changes are difficult to plan, often have tax or Families have felt increased levels of legal dimensions, and require adjustment in stress due to the deteriorating financial family goals and relationships. conditions and forced changes in their lifestyles. The majority of families Policy makers and government officials have perceived that their financial condition had little experience in dealing with widespread worsened from 1984 to 1985. According to financial stress. At the outset of the financial the poll, only 6 percent said their crisis in the early 1980s, data were not financial position had improved. Families available to assess farm and rural financial postponed major purchases and decreased conditions. Nor were there any proven policies spending for family living, including that might be used to ameliorate financial adjustments to transportation, stress. Agriculture had not experienced this entertainment, food, and utilities. Ten type of problem for at least 50 years. percent were not able to pay property taxes. In order to manage the budget, slightly more Rural communities were also not prepared for than one-fourth said they sold possessions, rapid economic change. Many agricultural cashed in insurance policies, or postponed businesses, such as machinery dealers or medical care. shoreline equipment manufacturers, essentially disappeared over a two-year period. With them The number of farm families receiving food stamps is at an all-time high in Iowa. Farm recipients increased from 500 in July 1984 to over 2,000 in March 1986. Maintaining basic family needs has beam, a severe problem for these families. Many farm families who need this program do not qualify due to financial guidelines which are restrictive for self-employed persons.
11 Iowa 5 Table 1. Average 1985 Financial Condition of Sample Iowa Farm Operators by 1985 Debt-to-Asset Ratio
Debt-to-Asset Ratio (2) 0-10 10-40 40-70 70-100 100+ All
Financial Characteristics
Assets ($1000) Non-Real Estate 136 166 236 156 85 166 Real Estate 282 375 420 348 152 340 Total 418 541 656 504 237 506
Debts ($1000) Non-Real Estate 6 44 121 143 190 60 Real Estate 4 82 238 251 124 101 Total 10 126 359 394 314 161
Net Worth ($1000) 408 415 297 110 -77 345
Debt-to-Asset Ratio (2) 2.4 23.3 54.7 78.2 132.5 31.8
Operator Characteristics
Age 59 54 48 46 L5 54 Years in Farming 35 29 25 23 22 29 Dependents 2.4 3.1 3.5 3.7 3.3 3.0 Dependents under 18 years 0.3 0.8 1.1 1.4 1.2 0.7 Husband Education* 2.2 2.3 2.4 2.3 2.4 2.3 Wife Education* 2.4 2.4 2.5 2.4 2.4 2.4 Acres Owned 235 280 295 271 159 261 Acres Rented 114 172 285 302 326 193 Acres Operated 327 430 562 539 484 433 Off-Farm Income $7738 $5795 $6621 $5574 $9426 $6779
Percentage Distribution
2 Operators 35 32 21 7 4 100 2 Assets 29 34 28 7 2 100 2 Debts 2 25 48 17 8 100
*Educational attainment, highest level attended 1 * grade school; 2 * high school; 3 * college or vocational
SOURCE: 1985 Iowa Farm Finance Survey.
12
6 lows
L During 1985 client contacts with mental Several hundred formers were assisted during health centers increased dramatically in the winter of 1983-84. It became obvious that some 'ira'. areas of Iowa. Statewide data on financiz.' counseling played a critical role in client contsets at community mental health helping ismUies cope with change. However, area centers were .lot available because the Human Development specialists began to recognize system is decentralized. In a survey of needs that were not being completely met by the 5 out of 34 mental health centers, however, financial clunseling. Management specialists a 30 percint increase in demand for services needed help in communicating with stressed farm was repotted. Jne could speculate that this families. The families sometimes seemed to was due to increased needs for this service, benefit from financi: counseling and on other but it also may have teen an artifact of occasions scarcely participated in the analysis increasing acceptance of mental health process. Clearly a better understanding was assistance. In the past farm families have needed of the impact financial failure had on not typically sought mental health farm families. Area and state specialists in assistance. Family Environment and Child Development began to dev.'lop a comprehensive Extension program on The need for assistance in coping with emotional stress in farm families, communication, financial stress has been pervasive throughout grieving models, and related topics. Iowa. Major needs include reliable information on financial, economic, and social conditions; After some urging from Extension, the state assistance in planning and decision making; legislature appropriated $200,000 in 1984 to emotional support for families and individuals support programs directed toward the farm experiencing stress; legal services; upgrading of financial crisis. The ASSISI program was professional skills for financial and helping developed by a task force of Extension professions; coordination of human and specialists in response to this special education services for farm families; assistance appropriation. in policy design and evaluation; and direct financial aid. ASSIST built on earlier experiences in programs for financially stressed families. Four major thrust areas were initially defined: RESEARCH AND EXTENSION RESPONSE (1) Awareness efforts to inform local community leaders about the scope and impact of the 8' .torical Background deepening farm crisis on rural Iowa, (2) Indepth financial counseling for farmers that helped them In January and Febru,:y 1980 a series of explore possible restructuring or reorganization statewide Extension program for farm families plans, (3) A series of agricultural credit short was organized. This effort as in response to courses for lenders and other professionals that rising interest rates, siemming from the Federal emphasised farm financial planning and stress Reserve's October 1979 decision to severely management, and (4) Development of community restrict the rate of money supply growth. Credit resource committees to assist individuals, for spring planting was in short supply and the agencies, and volunteer or,nizations to deal cost of operating money rose sharply. The effectively with farm finimmial difficulties. objective of this Extension program was to These major program areas have been revised and familiarize farmers with cost control options, strengthened bared on research findings and use of commodity programs, debt restructuring, in-field teachi,41 experience. and related ad!ustment strategies.
From 1980 to 1983 Extension programa on Research Activities - -Sconomi.s financial adjustment continued using traditional delivery methods. A series of articles on cost In January 19e4 the Dean of the College of control and financial management was prepared for Agriculture appointed the Farm Financial Stress Wallace's Farmer in 1982. Regular Extension Task Force. The charge to this group was to meetings such as crop clinics or catrle feeder document financial conditions in Iowa, examine program began to emphasize cost-reducing the need for public intervention, and design and technologies as a response to financial stress. *valuate prototype policy instruments should intervention seem appropriate. The task force In the fall of 1983, with widespread drought has been active since its inception. Major in southern Iowa, financial conditions took a accomplishments include: significant turn for the worse. Farmers and lenders began to require direct assistance in Documentation of financial conditions of financial planning. Consequently a pilot farmers, agricultural businesses, mainstreet financial counseling program was developed for businesses, and communities. The task force Iowa counties south of Interstate 80. Area conducted one of the, if not the, first farm management specialists and selected county financial surveys in the United States. agriculturalists were trained in financial This report was released early in 1984 and adjustment planning. The FINPACK computer provided information about the extent of program developed at the University of Minnesota financial stress and the characteristics of was employed in this project. At that time involved farm families. Similar surveys FINPACK was a mainframe program and could only .2 were conducted for agricultural and accessed through telephone connections. Soft are mainstreet businesses. was developed to permit Extension microcomputers to serve as intelligent terminals.
13 lows 7 Analysis of sectoral restructuring Intergenerational farm stress was examined requirements for the Pnited States and Iowa. in a study conducted by Dan Weigel, Randy This project used survey data in conjunction Weigel, and Joan Blundell, Extension with financial simulation models to estimate specialists in Child and Human Development the impact of financial stress on the (Blundell, Weigel, and Weigel 1986). agricultural sector. Estimates included the volume of asset liquidation, financial loss, and farm failure rates. PROGRAMS FOR FARM FAMILIES IN FINANCIAL DIFFICULTY Design and evaluation of financial policy. The financial crisis caught policy makers This section summarizes the educational without data and without proven intervention programs which the Iowa State University techniques. Members of the task force were Extension Service has initiated in meeting the actively involved in identifying needed needs of families, individuals, and communities forms of assistance, conceptualizing affected by the financial problems of programs, and estimating the costs and agriculture. The programs reported here were benefits of interventions. supported by regular Extension funds from federal, state, and county sources; special Impact of financial failure on farm project funds from USDA; special appropriation families. The fate of displaced farmers in from the Iowa General Assembly; and donations Iowa was examined through an ongoing survey from private organizations and individuals. conducted by task force members with the cooperation of the Extension field staff. Extension's programs targeted to distressed This unique data set gave insight into rural families are included under the response out - migration and unemployment among called ASSIST. It currently consists of four displaced farmers. It also provided parts: (1) FarmAidindividualized financial preliminary information on the disposition analysis, (2) personal support and stress- of thetr assets and the likely structural management programs, (3) community action groups, impacts of financial stress. and (4) educational sessions for professionals and community leaders. The Rural Concern Hotline was developed to serve as an interagency response Research Activities -- Stress to farm families. It is integrated not only with Extension's program plans but also with the other A number of research projects have been public and private responses to the farm crisis. undertaken to study the incidence and effects of stress on those affected by the farm crisis. The ASSIST program has evolved from the These projects include: original plan as problems and issues faced by farm families and rural communities were Stress among farm wives. Indepth interviews identified. Program efforts pertaining to with a sampling of Iowa farm wives indicated personal support, stress management, and increasing levels of stress among those who community response were difficult to have traditionally been the caretakers in conceptualize and have required multiple, families. Harmelink (1986) interviewed creative approaches. Staff members have been 11 farm women across Iowa during the fall crossing disciplinary lines and working in new and winter of 1985-86. Aside from the arenas. Extension has examined other resources financial concerns, the major stresses of for rural families and as a result established these farm women were a result of thetr collaborative efforts, such as the Rural Concern multiple roles and of not having enough time Hotline. and emotional support for themselves. In 10 of 11 interviews the women felt like Accomplishments of the different programs equal partners in farm operation. But even are summarized below. A general overview ofthe though they fell equally involved, their number of clients participating in various stresses were different from male farmers'. programs is listed in Table 2 for the period Being the primary caregiver for others October 1984 through December 1985. A total of resulted in additional stresses arising from 99,800 client contacts were documented as a part concern for who will care for them. of the ASSIST effort. The largest number of contacts (34,387) came through awareness Family stress in the middle years. Iowa meetings. State University participated in the North Central regional research project to study During the same period stress-management and stress in families. A teaching packet stress-related program contacts totaled 20,184. entitled "Dealing with Blame: Help for Farm Financial information and assistance was provided Families in Crisis, Leader's Cuide and to more than 10,000 fari families. The contacts Lesson Plan" was developed based on the were fairly evenly divided among those served via findings. the Rural Concern Hotline, those participating in the computerized farm financial counseling Farm family ri.ress. A study of farm :elated program, and those helped through traditional stress was zonducted by Randy Weigel, from programming for financially distressed farm which a publication series on farm stress families. was developed (Weigel 1983). 14 8lows Table 2. ASSIST Clients by Type of Subject identified and the percentage of participants who Matter Contact--October 1, 1984 to identified each: December 30, 1985
Awareness meetings 34,387 Public policy meetings 410 Percentage of Stress-management/support groups 20,184 Benefits Participants Farm financial analysis 9,470 Financial and legal assistancekural Improved planning 83 Concern Hotline 11,900 Increased Analytical skills 75 Agricultural credit short course 507 Improved morale 65 Community resource committee Increased confidence 72 participation 1,176 Improved decisions 78 Production agriculture 11,803 Reduced family stress 56 Family resource management 7,572 Other 2,391
TOTAL CONTACTS 99,800 As a result of participating in FarmAid, 77 percent said they had made minor adjustments in their farming operation and 41 percent said they had made major adjustments. Many clients FarmAid- -Farm and Family financial Management informally indicated that they would not have been able to secure further loans without the FarmAid is a major component of Extension's assistance received through the Extension FarmAid ASSIST program. FarmAid provides individual farm program. financial assistance with the aid of the FINPACK microcomputer software package.Business and enterprise records are used to project outcomes Personal Support and Stress-Management Programs of different decisions and alternatives. One of the ripple effects of the financial Both individual counseling sessions and crisis is the emotional toll on farmers, their group meetings have been used successfully with families, youth, and others who are affected in clients. The majority of consultations have been the rural community. Farm and other rural on an indinclual basis. Clients have the option families have needed assistance in of meeting at a county Extension office or on communications, decision making, and stress their own farm. For reasons of confidentiality management. Local professionals who work with many chose to have the agricultural staff member farm felonies have not always understood the come to their farm. Different staff members dynamics involved in attempting to cope with conduct the analysis sessions, including area these problems, nor how they might be of farm management specialists, temporary Extension assistance to those affected. associates who have a background in farm management, and county agriculturalists. This programming area has been difficult to conceptualize and implement. Initial efforts At least two sessions are held--one to included workshops and a home-study course on record the necessary information for analysis and stress management. Programs have since become a second to review the findings from the farm more focused in terms of problems and specific operator. The sessions last 2-6 hours, with many audiences. The following is a summary of the families returning for additional help. The Home personal support and stress-management programs: Economics staff member may become involved during this time on problems related to stress Stress-management workshops and individual management and family budgeting. assisisnce. A home-study course entitled "Stress on the Farm" was developed. Home- During FY85, 3,142 farming operations study materials as a delivery method have an received detailed individual counseling through advantage over meetings in that people do FarmAid using a computer. From October 1985 to not have to publicly acknowledge that they March 1986 staff worked individually with an are affected by personal stress levels. additional 2,600 families. During that entire period of time an additional 3,728 families who Meetings and workshops have also been were experiencing financial difficulties received conducted on stress-management.A majority financial management assistance without the aid of the meetings have been agriculturally of a computer. oriented, with a section included on stress management. A sample of clients in FY85 was contacted to determine the usefulness of the program. Self-help groups for farm families. The Approximately 90 percent said they received both development of self-help groups has been answers to questions and help in making fostered by Extension through the decisions. Ninety percent noted the value of the development of a learning packet and program as "moderate" to "high." The following training in use of the materials. Extension table shows some of the benefits participants staff assume various roles with the self-help groups; they recruit members,
15 lows 9 train small groups to use learning packets, over 34,000 people have r ,icipated in awareness provide subject matter assistance upon meetings. request from the group, and help link these groups with other helping professionals. In County resource directories have been theory, the groups are designed to be developed in the majority of counties. These organised and maint'ined by lay people. A were developed not only to create awareness of self-help group is defined as any group private and public resources but also to foster which offers emotional support and practical interaction among the various groups. In many help with a problem that is common to all cases it has provided a reason for discourse members. among groups. In some counties, community resource committee members have been actively There are other types of support groups involved in developing and disseminatirg the functioning in Iowa. Those coordinated directories. Elected officials have requested through community mental health centers copies and have found them to be of great use. typically are facilitated by mental health The directories have been a good vehicle for professionals. Others tend to focus more on extending the visibility of the Extension advocacy and empowerment of individuals and Service. groups. Community resource committees have been Stress among youth. Young people are formed in over one-half of Iowa's counties. exhibiting many signs of stress, ranging These groups have used their own creativity and from atypical behavior in school to resources in initiating projects and activities troublesome relationships in the home. Some to address local issues and concerns. Similar programming efforts have been for the youth groups are present in most other counties and are themselves, but the majority have been for assisted by the Extension staff as requested. adults working with youth. Community resource committees have carried A teaching module entitled "Rural out a variety of activities. One of the more Crisis Comes to School" has been used witha ingenious activities was the "Pass the Potatoes" significant number of public school project of the Marshall/Tama counties committee. teachers. The purposes of this program Twice in the past year they have obtained over include: (1) creating an awareness of the 40,000 pounds of potatoes from the Society of St. problems in Iowa's agricultural community, Andrew and distributed them to families in less (2) developing an understanding among than 72 hours. This same group has also raised professionals of the symptoms of stress in $10,000 for a farm family emergency medical fund. youth, and (3) assisting educators in In Taylor County, resource packets including developing their helping skills. directories have been prepared and hand delivered to every farm household in the county by clergy An outgrowth of this' activity has been and lay people. Two committees in southern Iowa special programs for yo, ,n on stress developed a proposal for a VISTA grant to help management led by classroom teachers. area farmers and citizens adversely affected by Extension staff have provided supportive the agricultural crisis. The proposal was funded teaching materials. A 4-H program entitled for hiring 10 VISTA volunteers and a supervisor "The Natural Me" has been piloted in twelve to help in eight southern Iowa counties. areas across the state. This program focuses on enhancement of self-esteem and Other projects which community resource personal decision-making. committees have carried out during the past year have included:
Community Action and Involvement Establishing a ccnty-wide development corporation The farm crisis evolved from actions and policies external to local communities. Rural Conducting surveys on labor availability and families caught up in the crisis have a sense of needs assessment powerlessness. Further significant economic ass:stance to families in crisis is unlikely to Establishing peer counseling groups be provided by the government. Consequently, it is critically important that local communities Conducting public awareness meetings respond to local needs. Community resource committees or action groups were suggested as a Establishing food banks or pantries means of mobilizing local resources. Conducting food stamp registration One of Extension's initial efforts was to opportunities for farmers conduct area awareness meetings. The meetings' primary objective was to educate Iowans about the Writing and obtaining grants for small, nature and extent of farm financial problems and interest-free loans their impact on the rural farming community. After the initial set of meetings, lay people Assessing family stress needs and how stress involved with the resource committees helped to is affecting youth in their county plan many others. In the past year and a half 16
10 loss In January 1985 a two-hour videotape The four programming areas of ASSIST have entitled "Rural Families: Taking Charge in been complementary. Experience with farm Cnanging Times" was cooperatively produced by families has indicated that a variety of state agencies and delivered to over 24 sites in information and support systems is necessary as Iowa via satellite downlinks. Over 1,500 people they cope with these rapid changes. viewed the program and had an opportunity to talk with local resource people. The video included the following topics: stress and grief, legal Rural Concern Hotline and tax issues, economic update, and services available to rural families. In December 1984, public and private groups recognized that farm families needed immediate County resource committees have been action- help in coping with their rapidly escalating oriented in some counties and advisory in others. problems. Families were not well aware of They have accomplished tasks which Extension existing resources in the public and private staff could not do alone. sector.
The Rural Concern Hotline was developed to Educational Sessions for Professionals and provide information, referrals, and counseling Community Leaders for farm and family financial problems, legal problems, individual and family problems, job The economic difficulties have altered questions, and basic needs for food, fuel, business, personal, and family relationships. shelter, and medical assistance. Rural Concern New information and skills are needed as is a confidential service administered by Iowa professionals and community volunteers work with State University Extension in cooperation with farm families. One of the ways that Extension the Iowa Department of Human Services and United can extend its resources is to provide training Way of Central Iowa. Funding is provided from for others so that they can more effectively work several public and private sector sources. in this arena. Since February 1985, Rural Concern operators Clergy have requested programs on have handled over 14.000 calls from Iowa farm communication, helping skills, and background families and rural residents. Callers have Information on the economic problems. Mental multiple problems, but the majority involve health professionals have cooperated with these financial/legal issues and their ramifications. educational sessions. Some of the clergy have Accompanying the financial concerns are a variety become actively involved in individual counseling of intermeshed problems, including marital and support groups. A unique newsletter for discord, parent/child conflicts, substance abuse, clergy was developed to create a grea er and physical ailments. Families are faced with understanding of these problems and explore critical decisions about continuing the family options for supporting rural families. farm operation or seeking other career opportunities. Peer listeners have been trained by Extension and mental health professionals.The The number of phone calls has varied volunteers list their phone numbers in depending on the time of year. The average newspapers, agency newsletters, and through the number of calls for June through August 1985 was hotline. 500 per month. For January through March 1986, as farmers were seeking credit and making plans Various educational sessions have been for the next season, the monthly average conducted for lenders. Some have dealt with increased to 1,600 calls. The number of financial, legal, and communication topics. A emotionally stressed callers increased, from 10 teaching packet entitled "Farmers and Lenders percent of the total in June 1985 to 20 percent Working Together" includes a videotape and in March 1986. The higher stress levels teaching outline. It focuses not only on coincided with the period of intensive decision- managing the lender's personal stress but also on making. working with highly stressed clientele.
4-H club volunteers have received training Nature of calls in working with youth who are under stress. A special television program via satellite Following is a list of the types of calls broadcast dealt with alternative options for 4-H handled by operators in March 1986. The figures projects which were lower in cost. represent what percentage each type was of the total number of calls. The percentages exceed A teaching packet which included a videotape 100 percent be' _use any one call may be listed entitled "Communication Skills for Office under various categories. Assistants" was developed to help secretaries and receptionists work with farm families. The importance of their role as the first contact was Financial 88 Policy Issues 7 emphasized. Communication and other helping Legal 68 Educational/Employment 5 skills were covered. Emotional 22 Family 7 Basic Needs 7
17 loves 11 Referral system least the next four to five years. The potential loss in the number of farm families will have a Hotline operators refer callers to various significant impact on rural communities. Coping Iowa organizations and agencies. Many callers with financial adjustment problems presents the are referred directly to Extension's ASSIST most immediate challenge. Others remain to be program for financial management consultation and confronted. stress-management help. Lender referrals are made to the Farm Credit System, the Iowa Bankers Association, and the Farmers Home Administration. Challenges Facing Rural Iowa Most legal calls are handled by the Extension staff attorney. In many cases Rural Concern is Rural Iowa faces an extended period of linking farm families with serviceu unfamiliar to change. Forces within Iowa and outside will them, such as the Iowa Dislocated Worker Program, impact families, communities, and the community action programs, mental health centers, agricultural sector in general. The following and the Iowa Department of Human Services for issues will need to be considered: basic needs of food, shelter, and medical help. Many of the human and social costs are just Following are the total numbers of referrals beginning to surface. Human service support made to other groups since the beginning of Rural systems such as the food stamp program, Concern: mental health counseling, fuel assistance, and medical programs will be in greater demand as families make lifestyle changes. Legal (staff attorney and volunteer Programs will be needed to help people attorneys) 5,003 develop new career, and lifestyle plans. Stress-management and communication Family/personal needs programs, as well as personal support Mental health center 257 systems, will be needed during these times Human services 514 of change and loss. Comm. action programs 206 County health RN 87 Excess capacity in agriculture must be Support groups 232 resolved, either through expansion of Extension (ASSIST) 1,020 markets or withdrawal of resources.The latter course of action requires long-term Job-related land retirement and the transfer of farm Dislocated worker 204 labor to other industries. College/university 183 Job service 189 New technologies that will enhance Placement agencies 189 agricultural productivity may imprc "e Iowa's competitive position in the long run but Lenders will certainly exacerbate excess capacity AIWA 265 problems in the near term. Farm Credit System 104 Iowa Bankers Associ.ition 9 Changes in national economic policy will affect Iowa's ability to earn income, to compete in foreign markets, and to service Current needs and direction debt. We need to understand the economic linkages between the national economy and During the past year many callers have not Iowa. been able to face their problems and explore alternatives.They have been in a stage of loss Economic development probably offers the called denial. While in the stage of denial the most opportunity for maintaining a high person wants to avoid thinking about or dealing quality of life in rural Iowa. Farms will with the situation. Hotline operators are now continue to move toward the extremes--very talking with more people who are moving out of large or very small. Consequently many the denial phase and are seeking information on Iowans who remain in rural areas will need alternatives. off-farm jobs. We know very little about why and how rural areas like Iowa develop The need for Rural Concern is strong and economically. will likely continue to increase as agricultural debt problems intensify in 1986.Rural Concern Preservation of soil and water resources provides an immediate, confidential, and will strongly influence long-term nonpartisan linkage of private and public agricultural productivity in the state. services to farm families in distress. These issues are easily overlooked in the short run but result in almost irrevocable change in the long run. RICOMMDRD PROGRAM AND RISRARCR IFPORTS Dealing with these issues and dilemmas will The financial and social transition of rural require a multidisciplinary approach. Extension communities and farm families in response to the has technical information and support systems to financial crisis will continue in Iowa for at deal with some issues and for the others it will provide alternatives on policy direction.
12 lows 18 Direction for Extension and Research Programs MATERIALS FOR PUBLIC DISTRIBUTION
Future program efforts Publications, film strips, and slide/tape programs are available on many topics within the The following programs will be continued and following categories: strengthened for rural families facing economic difficulties: Agriculture and Natural Resources
interagency educational programs to assist Business families with career and life transitions Financial Management development of self-help groups and peer listeners to provide support to families Food and Nutrition experiencing financial difficulty 4 -H and Youth educational programs to help other professionals and community leaders better Housing and Energy deal with the affected youth and adults Human Development and Stress farm and family financial management assistance Marketing
facilitation and support of community These materials are available free or at low zost resource committees from county Extension offices or Publications Distribution, Iowa State University, Ames, Iowa Much cf Extension's program efforts have 50011. Publications to support the Neighbor-to- been directed toward those families whoare in Neighbor Self-Help Support Group program are financial jeopardy. The next step is to take a available from the same sources. proactive stance and assist those families with a high likelihood of remaining in farming. Financial management computer software Educational materials for a program called the packages, each containing a diskette and Farm and Family Management Program are currently documentation, are available from county under development.The program will be targeted Extension offices or 108 Computer Center, Iowa to younger farm couples who need improved State University. Most sets are priced at $15. management skills. Participants will attend meetings, participate in small group work A number of videotapes addressing the farm sessions, and consult individually with staff. crisis are available for purchase or rental from The educational program will cover farm and Wilma Myers, Media Resources, Iowa State family financial management, production University (515-294-1540). Purchase prices vary management, marketing, goal setting and decision- but rentals are $8.50 4. shipping. Tapes come in making, and leadership development. 3/4" or 1/2" VHS.
Future research directions
Research studies in the following areas would REFERENCES provide support for needed Extension programming: Blundell, J., D. Weigel, and R. Weigel. 1986. Stresses and assess social and economic impacts of Satisfaction of Two-Generation Farm Families. Journal of financial stress on rural communities Extension Forthcoming, Summer.
Narmelink, R. 1986. Farm Women: Who Nurtures and Nurturer? examine the effects of rapid social and Paper presented at Iowa State University Extension economic change on family systems lnservice, Ames, March.
design and evaluate economic development Lesley, P. 1985. Iowa Farm and Rural life Poll: Spring strategies for rural Iowa 1985 (Pm- 1209). Ames: Iowa State University, Publications Distribution. develop farm management techniques Otto, P. 1985. Analysis of Farmers Leaving Agriculture for appropriate for the 1990s Financial Reasons: Summary of Survey Results from 1984 (Pm-1207). Ames: inwa State University, Publications examine the impacts of financial adjustment Distribution. on the structure of Iowa agriculture Weigel, R. 1983. Stress on the Farm (NCR -192a -40. Ames: Iowa State University, Publications Distribution. The challenges facing rural Iowa are significant. We believe, however, that Iowa State University can play an important role in helping Iowa meet these challenges. Research and Extension programs that assist families in solving problems and improving their quality of life must be supported and developed.
19 Iowa 13 illinois Extension and Research Response to the Farm Crisis
by H. J. Schweitzer
II TRODOCTIOR bushels per acre) crops, resulting in labor sad management incomes that averaged more than Overview of Situatioa $20,000 per operator. Labor and management incomes for northern, western, and southern Crop Reporting Service Survey Illinois operators, however, were lower, ranging from $0 to $10,000 per operator. About 5 percent of 885 Illinois farmers responding to a survey by the Illinois Cash interest payments remained high during Cooperative Crop Reporting Service in early 1985, even though interest rates declined. Cash January indicated that they would be leaving interest payments averaged $18,863 per operator farming during 1986. Among the 95 percent who in 1985, compared to $18,491 for the same farms indicated they planned to stay in farming, in 1984. however, about 3C percent carried debt-to-asset ratios above 40 percent and faced moderate to Land Prices severe financial stress. Slightly more than one-fourth (26.2 percent) of the farmers reported The decline in land prices is a major factor no debt; 44.3 percent had debt-to-asset ratios in the current farm financial crisis in Illinois, below 40 percent; 18.2 percent had ratios between as in other midwestern states. In a January 1986 40 and 69 percent; and 11.2 percent were in the land-value survey conducted in the University of 70 percent and above category. The highest Illinois Department of Agricultural Economics, debt-to-asset ratios were for those in the the average value of above-average Iilinois northwest, west, east, southeast, and southwest farmland was $1,580, an 18 percent decline over crop-reporting districts. the past 12 months. The average value of below- average farmland was $924, down 21 percent from a The average farm had gross sales of $89,286, year earlier. reclines projected for the next 12 production expenses of $68,798, and a net farm months for above- and below-average farmland were income of $20,489 from an average of 418acres. 9 and 11 percent, respectively. The income figure represents the average disposable income that farmers had available for Family and Community Impacts living expenses and to make capital replacement and debt principal payments. It does not, The farm financial situation brings however, take depreciation into account. If an increased stress upon individuals and families. average of $30 per acre for depreciation is Farmers' contacts with Extension's Rural Route deducted, the income figure drops to $7,948 for program verify the severity and diversity of the 418 acres. Total debt per farm averaged impacts. $116,911; real estate debt averaged $71,357 per farm; all other debt averaged $45,554. Total Agribusinesses in the community are likewise assets per farm averaged $379,912--$221,266 in affected. Farm implement dealers have suffered real estate assets and $158,646 in all other more than other service industries, according to assets. Average interest paid per farm was our agricultural economists. Loss of a $11,113 and accounted for 16.2 percent of the dealership has an economic impact on the entire average total expenditures. farm community as jobs and income are lost.
Farm Business Farm Management Records Local government's ability to provide needed facilities and services is impaired by the Studies of 1985 records from 3,607 farms in decline in land prices, lower farm returns, and the Illinois Faris Business Farm Management loss of jobs. Service show that farm operator "salaries"--what they earn for their labor and management- - remained relatively low for the state as a whole. Major Reteasies and Research Thrusts Labor and management income, the operator's cash wage, is defined as net-farm income reduced by an The Rural koute program is currently interest charge for use of debt-free or equity Extension's major effort to deal with the capital. Operator labor and management income for financial and family stress experienced by many the 3,607 farms averaged $9,035 for 1985. farm families. This and related programs are described in the following section. Much applied There were wide fluctuations, however, research and data gathering is being done to depending on location and type of farm. For support these programs. Several longer-term example, 512 central Illinois grain farmers, on research programs are undergoing shifts in the higher-rated soils, harvested record high emphasis to deal with the current farm financial corn (171 bushels per acre) and soybean (54 situation.
Extension staff and researchers are cooperating closely across discipline lines on programs in farm management, financial counseling, legal matters, and family and 14 Misch' 20 individual stress management. Additional content of Extension programs include the programs involving farm family members dealing following: with the interrelationships between farm and family and farm and family decision-makingare Many borrowers do not have copies of notes needed. Community support programs and programs and other security papers they have signed to retain and strengthen local businesses are with financial institutions and do not likewise needed. These will require understand the contents or agreements. cross-disciplinary efforts and research-Extension collaboration. Most families need the assistance of an attorney to better understand their options and liabilities when taking bankruptcy, EITINSION PROGRAMS foreclosure, and/or liquidating capital items. Rural Route Program Several families need counseling for marital Program Description problems, alcohol and drug abuse, and seeking other employment and/or public In January 1985 the University of Illinois assistance. Cooperative Extension Service received an $87,500 grant from Extension Service (ES)/USDA to begin a Many families face problems in special project to assist financially distressed communication, finances, and leasing farm families. The funds were used to (1) hire arrangements. one full-time and one part-time financial counselor to head the efforts at two Rural Route Rural Route's Multiplier Effect financial counseling centers--one at Macomb in western Illinois and one at Benton in southern In its first year of operation Rural Route Illinois, (2) install and maintain a toll-free has become recognized as a responsive and hotline, (3) train more than 200 Extension effective program by participating families, farm advisers, Agriculture and Rome Economics, to organizations, the mass media, legislators, and serve as teachers and counselors for financially the Office of the Governor. This recognition has distressed farm families, and (4) pay resulted in important multiplier effects that out-of-county travel expenses for advisers have allowed Rural Route to continue and expand serving as counselors. its services by creation of other much-needed non-Extension support programs to serve the needs The Rural Route program focuses on people of financially distressed farm families. and families rather than on farms. An underlying philosophy is that while farms will be lost, The Illinois General Assembly and the families need not be. The primary entry point governor have approved nearly $2 million in for Rural Route's assistance continues to be the special funding to aid financially strapped farm toll-free hotline. That line, answered on the families. That total includes an annual $400,000 University of Illinois Urbana-Champaigncampus, appropriation for Rural Route which is now being is staffed by agricultural and home economics used to continue the hotline telephone service advisers from nearby counties and some state and to establish two new centers--one at Dixon in Extension specialists. The telephone counselors northwestern Illinois and one at Springfield in help the caller articulate his/her major problems central Illinois--to coordinate one-on-one and or concerns and then arrange to have an Extension small-group counseling activities. adviser, or in some cases a state specialist, recontact the caller and set up a more intensive Other special funds are being used to counseling session. provide stress and substance-abuse counselors through an arrangement with the Illinois During the cirst full year of operation Department of Mental Health and legal counseling (March 1, 1985 - February 28, 1986) the Rural Route through an arrangement with the Illinois Ear program reached more than 1,500 families through Association. An additional one-time allocation more than 3,000 personal or telephone contacts. of $200,000 will support greatly expanded Nearly 1,500 calls were made to the hotline Extension efforts in legal education for lawyers, number. Hore thaa one-third of those calls (578 lenders, and farm families. out of a total 1,460) have been received since December 4, 1985, evidence that Illinois farm In addition, Rural Route helped generate families still need and want the type of awareness that resulted in $30 million from the assistance Rural Route can provide. state legislature to guarantee operating loans for the state's most needy farmers. Also, During the first year Rural Route counselors $59,400 was received from the Illinois Farm held more than 2,000 face-to-face sessions foran Development Authority to evaluate state credit estimated 5,500 contact hours. Typical programs for agriculture. Pioneer Hi-Bred assistance involves helping farm families prepare International, Inc. contributed more than $10,000 and analyse financial statements; explore to support development of teaching materials for alternatives for restructuring debt, cost two programs. containment, and off-farm employment; and deal with personal and family stresses and emotional Early in 1986, the Illinois Cooperative needs associated with financial difficulty. Extension Service received another $58,600 grant
Some continuing, unmet needs of farm families that are influencing the direction and 21 Illinois 15 from ES/USDA for Rural Route and related Farm Financial Information Management and activities. Analysis
Rural Route's Impact on the Illinois Extension This is a two-day workshop specifically System designed to give agricultural leaders the knowledge and skills they need to efficiently Rural Route has had a positive impact on the collect and organize data and set up systems for entire Cooperative Extension Service system. The their borrowers to prepare financial statements. program has renewed the field staff's enthusiasm and commitment and reestablished the primary role Farm Management Workshops of the Extension adviser as teacher through one-on-one and small group contacts. The During the last year 216 farm operators and Extension specialist's role as teacher-of- spouses interested in basic farm management teachers also has been reinforced. skills and tools participated in this series of four three-hour workshop sessions. Extension advisers is Agriculture, Home Economics, and Youth working with the Rural Route Agricultural Options center at Macomb identified in April 1985 five major reasons for liking their work with Rural Three hundred seventy-two individuals Route: (1) the opportunity to meet clearly participated in ten one-day multicounty workshops identified needs of farm families, (2) the designed to improve understanding of agricultural challenge of using personal and professional options and how they can be used to manage the skills and knowledge, (3) the opportunity for price-related risks of grain and livestock working closely with others in the Extension production. family, (4) personal learning experiences (inservice and on-the-job), and (5) The Improving Your Grain Marketing Skills satisfaction of having helped. This program of seven two-hour workshops, The same advisers also described major attended by 200 individuals last year, is difficulties in working with Rural Route, designed to help farmers, landowners, and others including: (1) the emotional strain of intensive develop a marketing plan, evaluate pricing involvement with people's problems, (2) helping alternatives, and develop price expectations. people recognise the limited choices available and make difficult decisions, and (3) finding Farm and Family Business Management Schools time for regular office work and other responsibilities. A team of specialists in farm management and family resource management have developed a comprehensive set of teaching materials and Other Ceeety aid Regime Programs provided inservice training for county staff to use in county programs. Topics include setting Following are examples of Extension programs family goals, inventorying farm and family that have been planned and adapted to the special resources, evaluating the present farm plan, needs of farm families in financial distress: managing family expenditures, and developing and implementing management plans. FACT (Facing Agricultural Crises Together)
Nine counties in northwestern Illinois have 111111MICH initiated a program of information, peer-group support, community involvement, and counseling to Activities in the Rural Route program and deal with the region's farm situation. inquiries from farmers, agribusiness people, financial managers, and government officials are Your Financial Condition resulting in much data collection and analysis of an applied-research nature. Many formal, longer- Last year 2,000 farm families took part in term, Hatch-supported research projects are this program of training to prepare and undergoing shifts in emphasis to deal with the understand balance sheets and other financial current farm financial situation. This is statements. especially true for projects dealing with farm management, marketing, financial institutions, Analyzing the Financial Strength of Your Farm and agricultural policy. Business Much of the research relevant to the farm This basic six-session course, taught by financial situation is being conducted by state farm financial management and agricultural agricultural economists, rural sociologists, and finance specialists, covers financial management agricultural lawyers in the Department of goals, analysing balance sheets and cash-flow Agricultural Economics and by staff in Family and statements, and implementing and monitoring a Consumer Economics in the School of Human financial management plan. Resources and Family Studies. Several of the researchers involved have joint Extension- research appointments in their respective departments. Others are working closely
16 Illinois 22 with full-time Extension specialists, financial Financial Markets--Risk Management Strategiea institutions, commodity /marketing groups, or governmental agencies making their data, models, Two current Hatch projects deal with etc., available for use in educational programa, evaluation of financial markets for agriculture management decisions, and policy formulations. and economic analysis of risk-management strategies for agricultural production firms. The first project involves, among other things, Farm Maaagesaat Records an examination of the ability of various existing financial markets to provide for the capital and Analysis of business records kept by nearly credit demands in agriculture. The second 8,000 farmers cooperating with the University of project includes identification, analysis, and Illinois Cooperative Extension Service and the evaluation of production, marketing, and Department of Agricultural Economics in the financial strategies that farmers use or can use Illinois Farm Business Farm Management Service is in risk-management programs. invaluable in monitorirg the :tate* farm economy, identifying the nature and extent of the A third Hatch project deals more farm financial crisis in the state, and helping specifically with price risk management farmers develop plans for future farming strategies, including options and futures, for operations. Ten associations in 102 counties are grain and livestock producers. serviced by 70 full-time field staff. Participation in this farm - business analysis program is voluntary and cooperating farmers pay Financing Public Services a fee for the educational services. Records are available to farmrmanagement researchers for With many rural communities and counties statewide and regional enterprise analysis while coming under increasing financial pressure at the same time the confidentiality of because of the farm crisis, an analysis of the individual records is protected. Illinois public infrastructure, management, and tax-base adequacy is essential if remedial action is to be taken. Several projects are currently Financial Management Strategies underway in the Department of Agricultural Economics dealing with public finance and tax Commodity prices, initial debt-to-asset policies: (1) building on the national study of ratios, and the tenure position of farmers have use-value farmland assessment policies completed been taken into account in a four-year financial last year, a broader effort is underway to look projection made in the Department of Agricultural at the link between agriculture and the Economics. To examine the importance of these performance of state and local public finance factors, the financial situation of an Illinois systems; (2) road services provided by county cash-grain farm was projected under three governments are now under study with the support different tenure patterns (fc11 owner, part of the USDA Office of Transportation; and owner, and full tenant) with three different (3) with support from the Illinois Tax initial debt-to-asset ratios (20, 50, and 70 Foundation, a major study of the Illinois real percent) and three different sets of commodity property assessment system is nearing prices. Economic models were also constructed completion. for Illinois dairy and cattle-feeding farms. Resulting publications distributed throughout the state deal with the topic of what it will take to Rural Communities and Agriculture survive in Illinois agriculture and strategies farmers can employ to regain profitability. Research is underway by rural sociologists in the Department of Agricultural Economics to examine the relative importance that changes in Legal and Tax Implications agriculture have to the demographic, commercial, and institutional changes small communities have Research by the agricultural lawyers in the experienced over the past several decades. The Department of Agricultural Economics, coupled analysis is focusing on almost 900 rural with Extension programs, has focused on the communities in Illinois. application of the Federal Bankruptcy Code governing farm bankruptcy proceedings. In particular, the status of the installment land Off-Farm Income - -Buell and Part -Timm Farmers contract and the Coie requirement of adequate protection for sclured creditors is being A comprehensive study of off-farm income to investigated under a Hatch research project. Illinois farmers was made in the Department of Several provisions of commercial law are Agricultural Economics in 1971. A new Hatch undergoing severe tests during the current period project is just getting underway to assess the of finer.Lial stress in agriculture. These laws current off-farm income situation, determine are being reex.eined as questions arise regarding relationships between off-farm income and who bears the losses under a variety of selected economic and social factors, and circumstances. evaluate findings for public policy.This study is particularly relevant because of the seriousness of the economic situation in Illinois
23 Ilknois 17 agriculture and the growing reliance of farm CONTACT PIRS01111 families on off-farm income. Further information about Extension or Research by rural sociologists in the research programs in the College of Agriculture Department has been conducted for several years at the University of Illinois may be obtained by on small, part-time farmers and small-scale contacting the following persons: agriculture. Emphasis is on social integration of these farm families into the community, Extension programs: occupational identity of operators, and various aspects of the farm enterprise, such as the role Dr. Peter D. Bloome of farm income and land ownership in the farm Assistant Director family's financial plans. Cooperative Extension Sevice 116 Mumford Hall University of Illinois Iatergeaeratiosal tolatioaships --Fara Wives 1301 West Gregory Drive External Imployasat Urbana, IL 61801 (217)333-9025 A new Hatch- and Extension-supported project deals with the relationships between adult Research programs: children and the parent generation in farm families. An important aspect is a study of how Dr. Harvey J. Schweitzer the current economic situation in agriculture is Assistant Director affecting families, including conflicts and Illinois Agricultural Experiment Station stress generated, as well as helping and caring 213 Mumford Hall patterns developed, between generations. University of Illinois 1301 West Gregory Drive A regional project in the School of Human Urbana, IL 61801 Resources and Family Studies is assessing the (217)333-6494 relationships between external employment of wives and the economic and interpersonal functioning of the farm family.
Ongoing Research -- Physical and Biological Sciences
Ongoing research in agronomy, animal sciences, forestry, horticultnre, agricultural engineering, entomology, and plant pathology that lead to production efficiencies, alternative enterprises, and improved practices are too numerous to mention. Advances in computer technology and biotechnology are accelerating rapidly. Improved decision-making and increased profitability on farms often results as Extension brings these developments to farm families through educational programs. Farm Crisis Response: Indiana Extension and ResearchActivities
by David C. Perritz and Dixie Porter Johnson
INTRODUCTION EXTENSION RESPONSE
Many farm families continue to face The Cooperative Extension Service (CES) in difficult times. A survey conducted by the Indiana is responding to the crisis in several Departments of Agricultural Economics and major thrusts. The first was a series of Agricultural Statistics in March 1985 indicated "awareness" meetings held in February and March that nearly one-third of Indiana's 25,000 of 1985. The purposes of these were to create an commercial. farms (those with gross sales over awareness in farm families and others associated $40,000) have financial problems, as indicated by with agriculture of what the economic environment the magnitude of their debts relative to their may be during the next five years and what assets. The researchers concluded that a period strategies (financial r-aagement, legal, crop and of continued low agricultural profits would cause livestock economics, family decision making, and these farms to have increasingly serious stress-management) ought to be considered. financial problems in the future. Approximately 1,700 attended the 23 Better Farming-Better Living meetings. This initial Indiana farm families need assistance in response was supported in part by a Special evaluating alternatives for improving their net Project Grant from Extension Service (ES)/USDA. income and preventing further loss of equity in the farm business. ether farm families are The CES has closely coordinated activities evaluating whether this is an opportune time to with the Farmers Home Administration (FMRA).The intensify or expand the farm business. Many farm CES cooperated with the FNMA in the training of families are not aware of the alternatives and/or its borrowers in the use of Coordinated Financial do not have the information and analytical tools Statements in December 1984. In May 1985 the available to aid them in an objective and Department of Agricultural Economics trained 40 consistent evaluation of these alternatives. of the Fah contractors on the use of computerized financial planning models. In a survey of Indiana agricultural agents made in September 1985 it was learned that an As it became increasingly clear that farm average of 90 farm families per county needed families needed individualized assistance, the assistance in adjusting to the economic Extension Service developed the FARM project. environment. More than 90 percent of the agents FARM is an acronym for Family and Agricultural believed that these families would need Resource Management. The purposes of this individualized assistance in developing and project were to provide information and methods evaluating alternative farm plans for their for farm families to gather, organize, and future. analyze data which describe alternative directions for their farm businesses, as well as Farming is more than lust a business. It is to provide an opportunity for the agent to a family unit in which the individual family provide information on family goals and members are undergoing varying degrees of stress objectives. Forty-two agricultural agents were as they adjust and react to the changing trained on the use of FINPACK last November. environment. Families need more information on Thirty-three of these were provided with portable how to handle stress in order to prevent more computer systems. Almost 500 farm families have serious mental problems. participated in these individualized counseling sessions. Families also need assistance in developing the skills and techniques needed for allocating A second project proposal submitted to their financial resources in a manner consistent ES/USDA contained a variety of activities with the goals established by the family unit. designed to assist farm families in farm All members of the family will more likely planning, record keeping, and understanding and participate in the achievement of the family's handling stress in the context of the family unit financial goals if they have had a role in and the rural school systems. Funds were awarded establishing the goals. to the project in mid-February of 1986. Funding of this project will support several additional Communities are an important segment of the responses. rural setting. By assisting community leaders in the development of programs that will help Additional activities now being formulated them understand and react to the current include: situation in a planned and widely-supported fashion, we can help these communities remain a A program entitled "Lenders and Farmers: part of the landscape of Indiana. Working through Crisis." Developed by Iowa State University, this program is being adapted for use in Indiana and will be the basis for a series of educational workshops beginning in the summer of 1986. The purpose of this program is to help 25 agricultural lenders and suppliers
Indiana 19 maintain a proper balance with their AGRIGULTIIRI RISBARCR farmer customers while both struggle to deal with the problems created by the Several research activities are underway current farm crisis. This program is a within 01 Department of Agricultural Economics cooperative venture of Agriculture and in response to the farm crisis. Home Economics, with the workshops being taught by teams of Ag and Home Economics A survey designed to gauge the financial agents. condition of Indiana farm families was made in March 1985. This survey will be repeated again A program for teachers, guidance this March/April to determine what changes, if counselors, and rural youth. The purpose any, have taken place in the past 12 months. of this is to assist those who work with rural youth in understanding the changing A project to evaluate the economic impact of rural environment and the resulting stress diversifying farm businesses through alternative placed on farm youth and how they may farm ente prises for Indiana is being coordinated react to this stress. This program is by Dr. Craig Dobbins. These alternative being carried out by 4-H, in cooperation enterpri 4s are being evaluated in light of risk, with Home Economics. income potential, resource requirements, and coordination with off-farm employment. A program for community leaders. The Dr. Dobbins' second research project is designed purpose of this program will be to assist to examine the potential impact of expert systems community leaders in identifying the needs on farm decision-making. The objective of the of their communities, the resources project is to provide greater understanding of available, and the alternative actions how computerized support systems can be which they should consider as their profitably utilized in the management of crop- communities react to the changing rural hog farms. environment. Dr. Tim Baker has two research projects A program to assist families in assessing underway. One is to examine the effect of their goals and values.As farm families removing price and income supports from feed evaluate their financial plans they must grains on the wealth, income, financial leverage, consider the goals of the family members. and investment of representative midwestern The materials developed by the University farms, as compared to continuation of current of Nebraska will be adopted for use in policies. The second project examines the Indiana. Short -term, this program will risk-return aspects of farm assets within the be used by home economists in a context of investment portfolios containing one-on-one situation with select FARM stocks, bonds, and T-5ills. These results will Project families. Long-term, this be useful to nonfarm equity investors. program will be integrated into family management workshops that will be taught Dr. Freddie Barnard has an ongoing project cooperatively by Agriculture and Rome designed to develop a credit-scoring model tu Economics. evaluate agricultural loans. Discriminant analysis is being used to estimate the credit- A program to assist farm families in :coring model. The objectives of the project are developing farm business and family (1) to determine characteristics common among consumption records. As agents have financially successful and unsuccessful farmers; worked with farm families during this (2) to develop a credit-scoring model for crisis, it is apparent farm families are differentiating, in terms of loan quality, among not keeping records that would be useful loan applications; and (3) to test the accuracy to assess farm efficiency and of the model by comparing outcomes against known profitability. An educational program on outcomes of selected loans. record keeping is being developed for Extension agents to use in a workshop Dr. George Patrick is collaborating in the setting. S-180 research project that Involves 16 states. The objective is to analyze the effect of various A program to assist Extension agents in proposed alternatives (loan writedown, reduced leading workshops on farm and family interest, sale of assets, sale-leaseback, etc.) business planning. While many of these on typica. farm !usinesses. A project designed activities are a short-term response to to analyze: the effects of government policy on the changing farm economy, farm families farm income variability is also underway. need to understand the basics of farm planning, regardless of which way the Dr. Jess Lowenberg-DeBoer has a research economy turns in the future.Good project underway which involves modeling the planning skills will always be useful. response of farm firms to financial incentives. Current work focuses on land price risk and the A set of six programs related to stress impact of land price changes on farm management. These will be offered by Home diversification. A book, Microeconomic Roots of Economics agents during the next the Farm Crisis, is being completed. Most programming year. Resources from the authors have focused on the macroeconomic sources North Central region will be used. of the farm -level financial and production
20 Indium 26 decisions which made farmers vulnerable in the 1980s.
Dr. Janet Ayres has a research project underway which is examining the structural/ functional changes of rural communities in Indiana and their relationship with agriculture. A typology of rural communities will be developed. Economic alternatives relevant to each category will be examined. State polic regarding rural communities will also be examined.
27
Indiana 21 Farm Crisis Response in Kansas
by William M. Eberle and S. L. Ward
The state of the farm economy has been of Conservative estimates of the numbers of considerable concern nationwide and has tat.eived Kansans likely to be affected by the agricultural extensive media attention during the past year. situation over the next 12 months and the Farm financial conditions have deteriorated following five years would suggest that perhaps over the past four years, as agriculture has as many as 200,000 rural residents, or experienced prolonged period of excess supply approximately 25 percent of Kansas' rural with persistent pressures on income and net worth population, could be displaced by 1991. The of farmers. implications of this type of displacement may be devastating for many rural communities. The most The inflationary period of the 1970s immediate impact, howcver, is on individuals and provided an increasing financial base for families who are faced with the loss of not only borrowing, but since 1981 farmland values have a livelihood, but also a way of life. declined drastically and lower farm incomes have reduced the farmer's ability to service existing For many rural residents facing the debt. Significant numbers of farmers, deteriorating economic climate, the broad particularly owners of commercial -sire farms distances that once represented their livelihood (those with gross sales over $100,000), face and their freedom now isolate them from potential problems in obtaining credit and many face assistance. Time, distance, lack of program liquidation or foreclosure. In Kansas, as in availability, shortages of trained helping ether states where agriculture represents a major professionals, and insufficient supporting portion of the state economy, the problem of revenues are usually cited as the major barriers individuals and families being dislocated from to providing assistance in most rural rural communities has reached crisis communities. But work at Kansas State University proportions. and the Menninger Foundation over the past few years has suggested that lack of access to As an example of the problems in Kansas, a information about existing programs is perhaps an farm financial survey conducted by the Crop and even greater obstacle than the traditional Livestock Reporting Service (February 1986) barriers to rural residents seeking assistance indicated that 12.5 percent (9,000) of Kansas' with personal and family problems. farms are in critical financial trouble with debt-to-asset ratios of 70 percent or more--a strong sign that their survival is in jeopardy. FARMER'S ASSISTANCE, cowman, AND TRAINIENC And 5.5 percent (4,000 farms) have already made SERVICE (PACTS) the decision to quit during 1986. One program attempting to address the Along the same lines, agricultural information hairier is the Kansas Farmer's economists at Kansas State University predict Assistance, Counseling, and Training Service that an additional 25 percent of Kansas' family (FACTS). The program was established by the 1985 farms likely will be lost during the next five Kansas legislature and is designed to assist years. And to make a gloomy situation even Kansas farmers, ranchers, agribusinesses, and worse, it is estimated that for every seven farms their families in avoiding or alleviating the that fail, one rural Matn Street business problems and distress resulting from the current establishment will also close. agricultural economic crisis. More specifically, the legislative mandate hirected the FACTS Thirteen Kansas banks and two credit unions program to (1) help Kansas farmers, ranchers, failed during 1985. Ten of those banks could be and agribusinessmen save the family farm/ considered agricultural banks. Two banks have business operation whenever humanly possible, failed so far in 1986. A number of other banks (2) help individuals and families cope with the are vulnertibl.. because of losses on leas. problems imposed by the current farm economy, and (3) when absolutely no way can be found to Other factors have added to the agricultural save the farm/business, help families make a situation having an adverse impact on the Kansas successful transition to another livelihood. economy. There have been JO recent manufacturing plant or facility closings (aircraft, metal, In simpler terms, the FACTS program was rubber, and agricultural manufacturing) resulting developed to serve as the state's point of first in 11,000 worker dislocations. That trend is assistance for rural individuals and families in projected to continue through 1986. Kansas is a crisis. In this capacity, the program was major oil-producing state and recent events have envisioned primarily as a statewide, toll-free further aggravated the economic situation in telephone hotline to provide information and counties with high oil production. These referrals for farm production, financial negative conditions not only impact the general management, and family stress problems. But in economy, but also reduce nonfarm employment fact, the FACTS program has evolved into much opportunities. more than just a hotli.. referral source for farm families. It has become the point of focus around which many sources of direct assistance to 28 22 Kansas farm families and businesses is coordinated. Kansas Cooperative Extension Service- - While the program is a joint program of the provides one-on-one farm financial analysis Kansas State Board of Agriculture and the Kansas t, all farmers requesting such assistance, Cooperative Extension Service, it has often been assists communities with economic the contact through which Extension programs have development programs, provides been initiated. entrepreneurial training seminars for dislocated farmers wanting to establish a Thl FACTS program staff currently consists private business, provides training for of four full-time and two half-time positions, individuals and organizations wanting to including a program director with experience in establish interpersonal support networks, business and program development, an attorney and cooperates in the development of local with an ag law background, a Farm Management farm stress seminars and rural issues specialist with a farm finance background, a forums. Family Needs specialist, a family therapist with a strong crisis intervention background, and an Kansas Attorney General--investigates and Employment/Retraining specialist with extensive provides legal assistance in cases involving experience in dislocated worker programs. loan fraud and consumer protection.
After an initial contact, each situation is Consultation of Cooperating Churches in assessed and prioritized and a determination is Kansas--provides immediate cash grants for made as to which staff member can provide the families needing temporary emergency most effective counseling. That person then assistance for food, medical problems, calls the individual and spends as much time as utilities, etc. necessary to help determine specific needs, examine options, and provide referrals to Kansas Rural Issues Ecumenical Coalition- - additional sources of direct assistance as assists organizations and communities in the necessary. development of rural issues forums and other education programs. With the qualified staff immediately available, a number of services can be provided Regional Mental Health Centers--provide directly by the FACTS program, including: long-term professional mental health counseling as well as providing local Farm credit counseling in farm plan backup, as necessary, in suicide reorganization and debt restructuring intervention situations. assistance Area Agencies on Aging--provide special Legal assistance at no cost through contract services to individuals 55 and over, as with Kansas Legal Services, Inc. (a well as providing employment/retraining noaprofit legal assistance corporation) at assistance. eleven locations across the state Small Business Development Centers- - Documentation of innovative approaches to provides one-on-one financial counseling for specific problems that might be transferable rural nonfarm businesses and also provides to other situations assistance to communities in developing plans for adapting to long-term business Assistance directories of statewide pattern changes. emergency assistance resources for use by both the FACTS staff and other helping All of these agencies frequently interface professionals with Extension programs in providing assistance to those facing economic and family stress at the Community response assistance to local local, regional, or state levels. communities and organizations in developing local response to specific situations and needs EXTANSIOR PROGRAMS
Master calendar of state, regional, and All Extension program areas have adapted local events that might be of value to their programs, at least to some degree, in either those with problems or other helping response to the current agricultural and rural agencies situation. A number of specific programs or relationships have been established that have Documentation and research of radical and been particularly helpful. extremist organizations and activities
Thus while the FACTS program is able to Fars Fissacial ftsagement offer immediate response to many needs, its capabilities provide the basis for many Exr.,:eion Farm financial management, utilizing the an4 research efforts at the University. Just as FINPACK computerized analysis program, has been a importantly, FACTS has established relationships major program during the past year. During that with the following agencies in providing services time, more than 1,000 farm families have statewide: participated in farm financial management
29 Kansas 23 workshops using FINPACK to analyze their farm funds for Extension home economists to provide operation. Probably that many more have seminars and workshops designed to ease the undergone FINPACK analysis on a one-on-one basis. transition from farm to workplace. Funds are For those going through workshops the analysis also planned to supplement the FINPACK analysts has uncovered an average of $8,000 per farm in effort and to further expand the FACTS program. adjustments (cost cuts or altered enterprise mix) for a total of $8,000,000 in potential efficiencies. In addition to Agricultural Economic Development and Small Business Programs Economics specialists, 50 county Extension agents have been trained in using the FINPACK program. Economic development programs are aimed, to Others trained include Farmers Rome a great extent, toward communities undergoing Administration, farm credit, and commercial bank stress as a result of the rural economic personnel. K-FARM it another computerized situation. They are generally intended to help program now on-line that is more extensive than communities move through a long-range economic FINPACK in doing enterprise-by-enterprise planning process toward appropriate economic analysis. It is designed more for farmers with restructuring. The programa are based on the their own microcomputers. The farm financial growth-from-within concept of retention and management effort interfaces with the FACTS expansion of existing firms. Programs include program in that, when appropriate, callers to assistance with economic analysis to help in FACTS are referred for a FINPACK analysis. determination of potential viable economic Farmers initially going rrough FINPACK analysis development strategies. Small business programs are, when appropriate, directed to resources for are designed for owner-managers of small Main follow-up help, including the FACTS program. Street businesses. The programs are intended to improve the decision-making capabilities of business persons so that they will be able to Friends in Deed manage better under difficult economic conditions. Many persons come into contact with individuals who are in the midst of a crisis and are uncertain of how they can react or offer Response to Sank Closures assistance. Friends in Deed is a program of Extension Home Economics to improve the helping The closing of a local bank causes great skills of persons who, though not necessarily in uncertainty across the community and can bring on a crisis situation themselves, wish to be better an immediate economic crisis for persons who have able to help friends, relatives, or acquaintances outstanding loans with the bank. The situation who are. Workshops have been held across the reaches dramatic proportions when the closing state during the past few months. bank is the only one in town and it is not purchased and taken over by new management. Informational programs have been conducted, Family Financial Management primarily under the leadership of the FACTS program, both for farmers and for businesses. Though not a program just in response to the Emphasis is on alternative options available for agricultural and rural economic situation, family those affected by bank closing, particularly financial management programs help families do a those whose loans are being called in. better job of managing scarce financial resources, especially during times of financial These are only some of the more significant stress. Extension efforts in response to the agricultural and rural crisis. New program adaptations are regularly added in response to specific needs. Entrepreneurship for Displaced Farmers Great emphasis is placed on being careful not to adversely affect important ongoing programs that Extension programs on starting a business will reduce thn chances of failure of farms, are being specifically designed to help farm businesses, and communities that are still family members who wish to start a business to competing successfully. either replace or supplement their far, incomes. Programs are not intended to give individuals new skills, but rather to show them how to put skills RESEARCH FEMME to use in private business either in or outside the home. Topics include business organization, Research programa tend to be long-term financial record keeping, time management, taxes, projects and are influenced by the availability insurance, and other related topics. One of funds. Most research projects have not been workshop has been held for a group of farmers who initiated solely in response to the agricultural plan to become home weatherization contractors and rural economic crisis. Some do have specific for a weatherization program. Plans are being applications, however, to the problems brought made to greatly expand this program through a about by the crisis. There are a host of grant from the Kansas Department of Human research projects that are directed toward Resources utilizing U.S. Department of Labor production, management, and marketing efficiency. Displaced Workers Program funds. This program, These have been and will continue to be important being designed to help move displaced farm family for solving problems on those farms already members into the work force, will ale, include having difficulty and for preventtng dIfftcnIty 30 24 Kama on those not yet in trouble. The importance of Improved Local Economic Analysis continuing this type of research canot be overemphasized. Research projects with some This is not a single specific research application to the current economic situation are project, but rather a process of reviewing and too numerous to mention. There are several, refining various techniques for analyzing the however, that would seem to be of particular local economic s tuation to predict trends and to relevance. suggest alternative economic development strategies.
The Farm Crisis and Decatur County SUMMARY
The objective of this case study of a Much has been done to mobilize assistance to dryland wheat-livestock county in northwestern individuals and families being impacted by the Kansas is to assess the impact of the farm sector agricultural and rural economic situation. In on the economy and social organization of a Kansas the FACTS program has played a major role county which has historically depended on in coordinating the various resources and agriculture for its livelihood and to learn about bringing appropriate ones to bear where needed. the incipient effects of the current farm crisis Extension programs have been developed or adapted on an agricultural community. With the to meet many needs of people and communities in completion of this study, two additional counties crisis. And there are some research efforts that are being selected to further expand the research contribute to the overall effort. project. The study has been particularly useful in identifying where the agricultural economic There is still more that is needed, however. crisis impacts the local economy. There is still a need to develop effective caring and support networks.And there is a need for more research on individual, family, and Agricultural Impact Analysis Model community reactions to stress and change. Finally, as a result of the agricultural and This applied research project is designed to rural economic situation, significant changes develop a model for analysis of the impact of appear to be evolving across rural Kansas.There agriculture on the local economy. When complete, is a need for research to determine the the computerized model will enable Extension directions and magnitude of social and economic staff and others to examine various "if-then" change and to produce programs to enable rural scenarios to estimate potential economic impacts people to influence and prepare f r those on various sectors of the local economy. changes.
Development of K-FARM
The utilization of this computerized farm financial analysis tool was described earlier in this paper.
DEVELOPMENT OF CORN-PRO, WHEAT -PRO, BEEF-PRO
This major research effort will enable the producer to examine production efficiency through all phases of the production cycle, with the goal of maximizing profits. A series of modules is being developed for each of the three enterprises. The results of the research effort will be to improve production efficiency and to reduce the probability of financial failure due to inefficient production management.
31
Kansas 25 Responses to the Farm Crisis: Michigan Report
by Julie Hales
urranscrios ratios. Mine percent of the farmers surveyed are highly leveraged, with a debt-to-asset ratio over Michigan's diverse agriculture provides it 70 percent, and another 16 percent have a the opportunity to become a major growth area in debt-to-asset ratio between 41 and 70 percent. world agriculture. Michigan Cooperative Compared to national figures, Michigan has a Extension Service (MCES), the Michigan greater percentage of highly leveraged farmers in Agricultural Experiment Station (MARS), and the the 40 to 70 percent range: 16 percent compared Michigan Department of Agriculture (MDA) are all to only 7 percent of the nation's farms. cooperating to help Michigan farmers take advantage of their opportunities. But future Dairy, cash-crop, and fruit farms are the growth opportunities are available only to those major farm types in Michigan and are experiencing Michigan farmers who can survive the current and higher loan delinquency rates than livestock or past financial difficulties created by reduced specialty farms. Fifteen to 20 percent of the export earnings, high interest rates, dairy and cash-crop production in the state is deteriorating land values, and failing commodity subject to severe liquidity problems. Since milk prices. and cash-crop prices have continued to decrease, the financial position of these farmers has The financial stress in Michigan gotten worse during 1985. agriculture, like a atone tossed into the pond, creates waves of consequences. Consequences that Prices of agricultural commodities have affect the frrm business are increased leverage, dropped 10 to 30 percent during the last four cash-flow difficulties, and, in some cases, years and income loss is affecting all farmers, insolvency and bankruptcy. These business- regardless of debt position. related consequences, like secondary ripples in the pond, produce emotional distress and loss of self-esteem--sometimes leading to child or wife MICNIGAN COOPERATIVE IMMO' SERVICE MISFONSI abuse, divorce, and, in severe cases, suicide. TO TUR FARM CRISIS
The problems of the farm financial crisis A Smeary f Research aad Isteasiou Thrusts and the emotional ripples it has created for the principal farm sector participant--the farm The MCES responded in 1985 to the financial family--are multifaceted. Consequently, the crisis in agriculture with a multifaceted response by MCES, MARS, and MDA has been and will program. A special inservice training program continue to be multifaceted. for staff on the current agricultural situation was conducted in early January. This was The MCES research and outreach programs a:e followed by a mass-media emphasis on the general intended to: (1) identify for those involved the economic outlook, credit availability, trade extent of, and the resources available to meet, outlook, agricultural policy options, money the Michigan farm financial crisis, (2) study management, farmland prices, and commodity price alternatives to farming and establish the job outlook. training and counseling needed to meet the adjustments required by current conditions, The overall goal of educational and (3) provide training that will help those who supportive efforts for Michigan farmers has been stay in farming to do so succes.fully by adopting and continues to be to challenge families to efficient production and financial planning reevaluate their family goals and commitment to methods so that the farming experience in agriculture as a way of life and a business -cficient and financially profitable, and venture. The objectives and strategies under the (4) assist the communities, which are extensions umbrella program call "Regaining Profitability on of the farm families, to adjust operations and Michigan Farms" are: services to survive and meet the needs of the farm families and nonfarm residents that depend To help financially stressed farm families, on their services. as well as those currently financially viable, to analyze alternatives resulting in better decisions about their future in or OVERVIEW OF FARM SITUATION IN =RICAN out of agriculture. Projects in this area include regional seminars, held in February According to a Farm Financial Situation and March, with the theme "Management Survey conducted by the MDA and the MCES in 2000." spring 1985, net farm income in Michigan has dropped substantially since 1981. According to To develop a series of materials for use in survey results, this income drop has pushed many meetings and with the mass media outlining family farms into less secure financial relevant information on family and positions, as evidenced by their debt/asset farm business goal setting and stress adaptation, the background of the future agricultural situation, and necessary
26 Mid6.6 32 management, marketing, and technological Study coping mechanisms within farm families production adjustments for agriculture. experiencing economic distress.
To provide a series of intensive workshops Establish research projects in the area of by type of farm, in which farmers receive rural development. Local communities are information and guidance to develop a important to the survival of farm families projected financial and production plan for and farm businesses through off-farm 1986 and beyond. employment opportunities and social and psychological support systems. What To provide retraining opportunities for farm strategies can be utilized to help farm families deciding to terminate their families and rural communities adapt to both agricultural employment. economic and social changes that are occurring? To provide intensive individualized family and farm business assistance through continuation of the Extension Management EXTENSION PROJECTS AND RELATED RESIARCN- -NEN AND Assistance Teams (EMAT). ONGOING PROJECTS
More detail on these projects is found under Assistance Betties the section entitled Extension Projects. In April 1985, the MDA and MCES combined efforts to establish the Agricultural Assistance Suggested Areas of Research and Program Network, a toll-free hotline to provide a liaison Development and referral service for farmers and agribusiness people in economic distress. Since start-up Recognizing the relationship between vision almost one year ago, 1,296 farmers have utilized and reality in planning, the MASS and MCES joined the hotline. The vast majority of these callers forces in 1985 to undertake an intensive review have been seeking information about loans or and comprehensive long-range planning effort, problems surrounding access to loan monies. This effort is a review of the post, an analysis Human services requests or problems have been the of the present, and a practical strategy for the object of approximately 10 percent of the calls, future. Input came from Michigan citizens from with another 10 percent seeking information on all counties of the state, key community leaders, legal services. Over 200 of the callers have industry and agribusiness decision aakers, and requested contact with EMAT services. The vast university faculty and staff. Enriching majority are full-time farmers and average Michigan's Future: A Planning Document outlines acreage runs approximately 380 acres. strategies to meet challenges in our state, a critical one, of course, being the current farm MUT situation. This planning document, with its thorough development and background work, was one A team approach and one-to-one work with of the sources for the following suggestions for farm families was needed to provide intensive future research and programs: assistance to farmers and their families.To provide for this need, EMAT teams were formed. Establish and develop multi- and These teams are made up of county and district interdisciplinary research and extension Extension staff members, including district farm teams that mobilize the expertise needed to management agents, agricultural agents, and home address strategic issues for a coordinated economists. They meet with families who require response. This would include (1) studying their services to develop strategies for dealing the adjustment problems facing Michigan both financially and emotionally with their agriculture; (2) coordinating advice to economic problems. Currently 14 teams are commercial and part-time producers on working throughout the state. The EMAT process appropriate technologies and farm systems, usually begins when a farmer contacts an agent institutional services, credit, taxation and and asks for help. The agent then works with the regulatory policies, development and use of family to gather the required information and new production systems, and management of farm records. The standing team is augmented finances, marketing, and personnel; and with specialists in subjects pertinent to (3) promoting and rewarding particular farm or family problems and areas of interdisciplinary action teams that will production. The team visits with the family for work together to solve complex biological, a day, reviewing financial records and facilities economic, and social problems related to and analyzing the farm/family situation. agricultural systems. Strengths and weaknesses are outlined and opportunities and options are explained to the Expand integrated decision support systems family. The family is sent a written summary of (IDSS) to provide assistar in activities the visit, including analyses and recommendations. related to predictive or m nagement At the family's request follow-up can also take information, farm efficiency and the form of further visits and phone profitability, and information consultations. To date more than 300 farm dissemination. families have been involved with EMATs across the state.
33 Michipn 27 Agents involved in EMAT utilise many sources Survey respondents in spring 1985 said they plan for updating their expertise and broadening their to discontinue farming in the sear future.Job skills. Inservice training has been provided for placement and job training are high priority team members, as well as a monthly newsletter needs, according to 55 percent of the produced by state staff. Resource materials respondents. Supporting evidence as to the developed at Michigan State University (MSU) and importance of this program also came from the other state universities are included in the Gratiot County Skills Inventory Project. This newsletters, as well as updates and announcements pilot project inventoried skills of farm family on conferences and workshops related to the farm members to assess their proficiencies for situation. off-farm employment.
An evaluation of the BMA? process is In response to this need for retraining, a currently in its final stages. Using a case statewide program hem been developed to focus on study approach, the process evaluation seeks to job retraining opportunities for farm families explore the effectiveness of this strategy of and fare employees who are forced out of helping farm families. Preliminary results agricultural employment. Although the proposed reflect very positively on the program. system is complex, utilising a wide variety of services, institution., and deliverers, the basic 'MAT for Aeribesimese structure consists of the use of the 80 statewide offices of MCES and 15 Extension agents trained A similar approach has been utilized within in farm financial stress and in assessment of Michigan agribusinesses. Teams led by MCES but eligible fan clientele. Referrals for this composed of state and local business retention program come from the Extension offices and the experts, community college faculty and staffs, hotline mentioned previously. The program has out-of-state regional cooperatives, trade already signed 115 participants; this response is associations, and lending institutions have worked much greater than ever anticipated at start-up intensively with 42 businesses this year and only just one month ago. one assisted firm has failed. As the program becomes better known the requests increase. In nearly every instance the problems arcs increased Type-of-Farm Workshops and Materials Development by the inability of the customers of these businesses to pay their bills and the actions of Crop Production secured creditors of farmers who are customers. Especially hard hit are farmer-owned cooperatives. Research projects within the Agricultural The opinion of agribusiness specialists within the Economics Department on crop production are state is that local farmer-owned cooperatives in generating invaluable information on the elevator and farm - supply industry are harder profitability of specific agronomic practices and hit in Michigan they in adjoining states. Most of providing crop farmers with business analysis the firma involved with the EMAT for agribusiness tools to enable thee to make more profitable are family-owned or controlled businesses. These agronomic and marketing decisions. These people are involved in the business both research results are being used as reference personally and professionally, and the stress is materials for crop production workshops being every bit as great as on the family farm. held across the state. Specific research top:us include: (1) development of a decision support MCES and FeRA--Werkieg as a Team system for pest management and tillage alternatives in corn production, specifically the MCES and AMA have a history of cooperation; economic impact of switching from conventional the newest program, aimed at assisting limited tillage to no-till corn production; (2) applying resource farm families critically in need of economics to weed interference data to determine help, expands on the EMAT concept utilizing PmRA economic thresholds for postemergence weed input and staff. As with EMAT, the goal is to control in soybeans; and (3) addressing the enable families to deal effectively with and gain optimum input levels for ag chemicals, including control of various financial factors affecting herbicides, biological inoculants, and fertilizer their lives. products.
Evolving from research such as this and Dislocated Necker Pregrar-JTFA cross-departmental input, Extension efforts have The goal of this program is to improve the included: development of resource materials on economic solvency of dislocated farm family management practices to increase yield without members and their employees through off-farm increasing cost, preparation of a series of employment. The need for such off-farm position papers on emerging techno,ogical changes employment arises from the well-documented, in crop production and how these changes may long-term trend of out-migration from farm impact on future management practices, and three employment. This trend is intensified by current two-day crop production workshops held since farm financial factors, ma....ag farming no longer January at different locations across the state. viable for many Michigan residents. These represent combined efforts of county and state staff. Staff perception was that Farming as an occupation has experienced attendance and discussion were promising and well serious employment declines for decades. worth the efforts. Seventeen percent of the Michigan Farm Financial 34 28 bechigin Dairy these seminars explore operational goals and planning for production, they also address an The Agricultural Economics and Animal issue often overlooked by farm families--setting Science Departments have teamed to present family goals. Since the farm and the household ongoing workshops and training sessions focusing are resources for one another, how does a farm on dairy farm business analysis and planning. family work toward setting goals that balance The Dairy Farm Analysis Workbook, developed by both farm and family?Answering this question dairy field staff and campus specialists asan was the object of a new Extension bulletin with organisational and record-keeping tool,was used worksheet utilized at the Management 2000 as a basis for instruction and discussion seminars. Entitled "Working Together: Managing focusing on farm business analysis and planning. Change in Farm and Family," the bulletin and Data from a sampling of dairy farmers has shown worksheets are used to provide information on that this workbook is very useful for short- and family goal setting, priority setting, and long-range planning and control of a dairy planning for farm families. operation.
Early in February an intensive training Microcomputer Workshops session for agents was held to apprise them of dairy adjustment alternatives under the 1985Farm Using microcomputers in a group workshop Bill. Research support for this training and setting with farm families, agribusiness persons, ensuing workshops came from a unique research and field staff was the objective of cash-flow committee formed in November 1985 and charged planning workshops begun in 1985. These early with formulating materials that could be widely projects included Extension specialists and used in CES to help dairy farmers, lenders, and financial analysis instructors who traveled all other industry groups better understand and make over the state with vans loaded with IBM-PC decisions relative to the new Milk Production portable systems with printers. An evaluation of Termination Program. This multistate study the series showed an overwhelmingly positive involved a group of agricultural economists response to the workshops by participants. This representing six land grant universities. Much year will see a continuation of these workshops effort has surrounded this issue here at MCESas conducted by county or district personnel using we continue to meet demand for information on the financial analysis microcomputer templates this timely topic. designed to build monthly cash-flow projections and loan applications. Many of these projections are being made by county staff in individual Regional Meetings - -"Management 2000" consultations with farm families. Use of these templates has been very successful with EMAT Three regional eeminars were held in January families for planning purposes and support when and February for financially stressed and they are meeting requirements for loan financially strong commercial farmers. applications. "Management 2000," focusing on long-range planning. These well-attended seminars included instruction and generated enlightening discussion County-Level Workshops - -Joint Effort on these topics: (1) economic framework for agriculture through the year 2000; (2) family Too numerous to list are the many county- dynamics in handling stress and farm and family level workshops and farm family meetings. These decision making and goal setting; (3) emerging programs often involve campus and field staff and technological changes in livestock production and specialists, as well as community leaders, health management implications for producers; care and legal professionals, and church leaders. (4) emerging technological changes incrop In one instance a panel was arranged including production and management implications for farm family members who responded to questions producers; (5) the application of artificial and concerns of their neighbors in the community. intelligence, management support systems, models Farm family stress and strengthening of management science, and computer technology in communication are often the focus of these helping farm managers in the year 2000 make meetings, although farm and family management and timely, correct, and profitable management planning are also important components. decisions; (6) long range financial and business planning; and (7) resource and environmental These county-level workshops and meetings quality issues affecting agriculture. are extremely important for several reasons. First, county agents and home economists are in Research and reference support for these and touch with the needs within their own areas, thus future seminars comes from many different they are able to respond with information departments within Extension and MSU. The pertinent to these needs. Also, these agents and seminars are conducted through the efforts of home economists have often had personal contact county and state agents and specialists. This with farm families and can invite them to attend. cross-discipline, crost-departmental effort is in This personal touch is often the only successful the process of being evaluated using mailed means of drawing farm families out into the open postsession questionnaires. to share problems and fears they have about their own situations. Farming is one family business where work and family life are very closely meshed. While 35 Michipn29 Churches in rural coumunities and church Resources Departments is the Family Farm Project. councils statewide have recently begun to Research and Extension teams are functioning in actively organize meetings using Extension five major areas: family systems, community specialists as resource persons and utilizing infrastructures, home industries, agricultural Extension mateials. As recent research production, and facility development/energy. suggests, churcaes have the potential to provide Although this far-reaching study was not a great deal of support and counsel for farm originally developed in response to the farm families. The rural community churches are situation, many of its ongoing components are now traditionally a fundamental social and spiritual adapting their strategies and methodologies to center for farm families. gather information very relevant to the farm situation in Michigan today. Many agencies and groups in our state are sponsoring meetings for farm families utilizing Computer models are becoming increasingly Extension specialists as speakers and valuable tools for efficient and economic facilitators. An Extension Home Economics agricultural production systems and MSU is a specialist reported that she has presented 7-10 leader in their development. A cooperative workshops a month on farm family stress and effort underway at Kellogg Biological Station communication skills development for groups such involves a multidisciplinary research effort to as this. Specialists and field staff within design a computer-assisted management approaco. Extension Home Economics have developed a wide The Agricultural Economics Department, along with range of resource materials to be used at Agricultural Engineering, Crop and Soil Sciences, workshops and classes. (See end of chapter for a and Animal Science, have teamed to develop an listing of resource materials.) integrated "smart" decision-maker aid. Extension staff members have also developed such computer- assisted aids as land valuation packages, crop RESZAILCI PROJECTS budgets, and budgets to determine cash/crop share leases. Thus far objectives and strategies have been discussed. It would be negligent, however, to Extension Rome Economics is the base for an attempt to categorize these projects only as exciting research study of financially stressed programmatic responses to the farm situation, farm families in our state. Utilizing a since much of what was discussed would also fall longitudinal design, this five-year study will under applied or problem-solving research. In include 300 families chosen by the local county the following examples, problem-solving research Extension staff.Health risk appraisals, as well as subject-matter research will be including evaluation of blood pressure and serum summarized. cholesterol levels, will be done in years 1 and 5 of the study. In addition, both husband and wife Providing benchmark dataitanswer to the will complete individual aurvey questionnaires question, "How serious is the farm financial each year. The purpose of the study is to: crisis in Michigan?" was the goal of subject- (1) document short- and long-term effects of matter research carried out at MSU in cooperation physical and emotional stress on those farm with the MDA. The study, Farm Financial families experiencing financial difficulty, Situation Survey, conducted in spring of 1985, (2) determine whether or not there are found that indeed a number of Michigan farmers significant differences between families that are experiencing financial distress.The access additional external resources available to information and clarification provided by this them in crisis and those who do not, and study of Michigan farmers has proven an (3) assess any reduction in stress- related invaluable reference for programmatic responses consequences experienced by families who receive throughout Extension. Program planning in the assistance compared to those who do not. areas of financial and production management, as well as the Displaced Worker JTPA program, drew important information from the findings from this COIICLOS1011111 survey. Michigan agriculture is facing substantial Broadly, research thrusts have been targeted challenges. The overall picture for agriculture toward improved farm and agribusiness management in the short run is not too bright. Adverse training, profit optimization rather than cost/price ratios are driving some producers into maximization of production, and basic research on bankruptcy. The mid-sized farm in Michigan is biological processes and interactions of plants vanishing. From 1974 to 1982 producer expenses and animals, as well as exploratory work on per dollar of gross income rose from 72 to 90 stress in farm families. Clearly, achieving cents, farm debt per Michigan farm tripled, and these goals requires interdisciplinary, cross- interest on the mortgage debt increased the departmental efforts and this cooperation is in fastest of any expense item in the producer's evidence at MSU. budget.
Response to the farm situation is not Farming is a family business. Farm families limited to the agricultural expertise within derive their very identity from working the land MCES. One example of a cross-disciplinary and, as one author noted, "many farmers today are research project carried out by the Sociology, being plowed under." Faris families hold a deep Human Ecology, and Agriculture and Natural commitment to family life and work and close
30Michler 36 connections with neighbors. These attachments in more positive and productive terms, with and values together form a rural ideology that is final comments by Dr. Ramachek. $20.00 lived, loved, and taught to the next generation. Their sense of failure when unable to live up to Audiotape, "Family Communication During these commitments is devastating and the Stress and Crisis."30 minutes in length prevalence of depression is certainly not (cassette), the tape features the six surprising. minilecturea included in the teaching packet. $3.00 The challenge is clear--support for financial and emotional stress must be provided "Work and Family Stress" (E-1698). This for these farm families. Whether it be problems 27-page booklet explores the work/family in production on the farm or communication across interface, including the nature of the the dinner table, tools must be provided to stress reaction, a discussion of the empower these farm families to survive and grow. compounding of stress when work and family MCES is doing its best to provide these tools and responsibilities are combined, and a final will continue to do so. section on how to keep stress under control. A group exercise is included in the contents. $1.75 MATERIALS TO SUPPORT PROGRAMMING IN FARM FAMILY STISS3--FAMMI COMMUNICATION DURING STRESS AND "Divorce and Family Stress" (E-1733). This CRISIS 29-page booklet includes an introduction to divorce and family stress and includes the These materials are designed for following sections:Marrying and professionals interested in helping families Unmarrying, Arranging Custody, Effects of develop more effective communication and Divorce on Children, Reducing Fallout, interaction patterns as resources for coping with Helping Children Cope, The Rome-School stress. To order contact Anne Soderman, Rumen Connection, Living the Single Life Again, Development Specialist, 203 Human Ecology Handling the Stress of Separation and Building, Michigan State University, East Divorce, and Check Your Own Stress Level. Lansing, Michigan 48824. Prices include shipping $1.75 and handling. The Stress Press, Volumes I and II. "Teaching Family Communication During Stress Included here are 20 individual issues of a and Crisis." Included are six 1 1/2-hour two-sided newsletter focusing on such topics planned sessions. Each contains a warm-up as family stress, hurried children, single activity, minilecture, overhead parenting, work and family stress, and transparencies to support the lecture, a stress and marital meltdown. $5.00 group experiential exercise, and camera-ready handouts. The sessions are "Farm Family Stress" (E-1697). Developed by divided as follows: Sally A. Middleton, this 29-page booklet focuses on stress in agriculture, Session I: Family Structures that Impact understanding stress, stress symptoms, on Communication managing stress, farm family communication, Session II: Nonverbal Communication and farm family goals. $1.75 Session III: Effective Listening Skills Session IV: Five Verbal Response Skills Audiotape, "Relaxation Exercises." This Session V: Ego States: Understanding tape contains guided experiences in Communication Transactions relaxation. Five different exercises, each Session VI: Communicating During Crisis approximately 5 to 10 minutes in length, are provided as alternative techniques for Two books are included in the packet for acquiring personal stress-management ready background reading: Robert Bolton's expertise. $3.00 People Skills and Kathleen Galvin and Bernard J. Brommel's Family Communication. $55.00
Videotape, "Family Communication During Stress and Crisis."Fifteen minutes in length (VHS 1/2"), the video features Dr. Donald Hamachek, author of Encounters with the Self and Encounters with Others, talking about the negative and positive approaches families take when trying to communicate during periods of stress. A farm family is depicted trying to decide whether or not to take a loan to finance an additional operation. At first we see them interacting very negatively, with Hamachek pointing out examples of faulty communication. We then watch the same family discussing the problem 37
Michipn 31 Prcject Support Tackles Rural Problemsin Minnesota
by Kathy Mangum
IITIOO5CTION A 1984 USDA study indicated that the Lake states of Minnesota, Michigan, and Wisconsin Minnesota farm families are making tough had 15.8 percent of their farms with debt- decisions--decisions that set the course for to-asset ratios of 40 to 70 percent; 9.8 their futures. For many, the choices they make percent had over 70 percent and 3.3 percent today will determine whether they stay in were insolvent, with debts greater than farming. Individual circumstances vary and so do assets. A Minnesota study conducted later the options. Each family most base its decisions showed Minnesota estimates to be higher than on its own unique situation. the 1984 USDA study.
The financial condition of many Minnesota Minnesota led the nation in the number of farms has been deteriorating since the late 1970s farms lost from June 1, 1984 through July 1, and was recognised as a crisis in the making IT 1985 (Minnesota Agricultural Statistics early as 1981 by Extension economists and other Service). During this period, the number of Extension staff working closely with farm farms in the state fell from 101,000 to families. These developing conditions had their 96,000. roots in the general deterioration of the overall economy and were specifically related to the The Minnesota farm-price index hit a growing federal deficits and the rising value of seven-year low in September 1985. Sy mid- the dollsr, with its accompanying effect on December it was 8 percent below its previous international money flows and other economies of year level. the world. U.S. agriculture was impacted by deteriorating commodity prices and escalating The dollar volume of farm loans issued in costs on most input items, especially the cost of Minnesota by the TWA more than doubled from money (interest). October 1, 1984 to September 30, 1985. Loan volume increased to $437.6 million, compared These conditions, affixed on top of the ag with $207 million in the previous 12-month boom mentality of the early 1970s, caused many period. farmers to overspend by producing a now lower- valued stream of products and overinvesting in Six rural banks were declared insolvent and production capacity. Lower returns at higher closed during 1985, the most for any year costs, with more dollars going to cover the in the state since the Depression. In each investment in capacity, soon drove many into a failure the declining farm economy was downward spiral, unable to provide cash flow for listed as the contributing cause. In expenses and at the same time meet obligated debt addition, 42 agricultural-dependent banks payments. Under these condition!, returaa io are on the state's trouble list. capital invested in agriculture declined and impacted on the value of the assets used in In addition, family service professionals report agriculture, most specifically - -bit not alone- - an increase of chemical abuse, family violence, the value of land. Declining asset values caused and depression among rural residents. These many debt commitments made under previous symptoms of stress reflect the impact of the farm conditions to be undersecured. This condition economic distress on the farm family. has continued to deteriorate. In some cases it has advanced to the point where annual operating The long-term survival of rural Minnesota is credit cannot be obtained because of lack of based not only on improved personal decision a sufficient security base and repayment capacity making by farm families concerning farm and to handle already committed debt obligations. family management questions, but also on a Surveys indicated that this was the situation for renewed focus on community economic development. about 25 percent (25,000) of Minnesota farms by In order to make the hard decisions needed for October 1984. today and tomorrow, farm families and rural communities need reliable and pertinent The impact of the farm crisis on the state information about their economic and social can be illustrated by the following conditions: choices.
In the fall of 1984, the Minnesota Extension The author gratefully acknowidges the service launched Project Support, an intensive previous work of a number of Extension staff. statewide effort, to address the crisis in cural Much of this report was written from their Minnesota. The Director of Extension appointed a writings found ta the final report, Project task force to develop the plan. Forty county and Support Impact Study, February 28, 1986. area agents had 25 to 50 percent of their time reassigned to provide multicounty leadership in Project Support programs. Project Support also includes a statewide toll-free hotline and a statewide coordinator. This position is filled by an Extension specialist on a temporary special assignment.
32 Minnesota 38 The goals were to help farm families collaborative efforts have provided the (1) develop and analyze long-range alternative foundation for Project Support programs. farm plans, (2) develop cash-flow plans for 1985 to be used in negotiating with their lenders, Future research and program efforts should (3) be equipped to better analyze their include: situations after their 1985 business year; (4) cope effectively with stress, and (5) utilize 1. Baseline research data on farm families community resources. 2. Data on what research is needed in the Project Support is a success in a number of future aspects. The program provides sound educational information on farm management, family resource 3. Research on implications of dual-career and stress management, and community development farm families to thousands of Minnesota citizens. A recent impact evaluation took an in-depth look at the 4. Continuing research on farming systems, type and nature of help provided to Minnesota including implications for family and citizens and concluded that the Extension Service community clearly met its goals. Not only did thousands receive helpful vital educational assistance, but 5. More research on models for community the Minnesota Extension Service was able to economic development that focus on a implement this "crash program" with considerable win/win situation, rather than a speed and extremely limited resources. competitive win/lose situation
The success of the Minnesota Extension 6. Data on the kind of support and services Service in Project Support can be attributed to county Extension agents need to prevent several factors: the university's capability for job burnout research and program development, the advent of lower-cost microcomputers, the experience of 7. Study of interorganizational relationships Extension staff in farm financial management, between Extension and other organizations legislative funding to make software and hardware available to Extension offices and other agricultural educators, and to a large number of RESEARCH AID PROJECT SUPPORT financially distressed farmers. This report is not meant to summarize the entirety of the research efforts at the IDOCATION III ACTION University of Minnesota. Rather, it is meant to highlight some of the research that has been Project Support uses a program development utilized in the first year (1985) of Project model that combines research from Agriculture, Support. The following information describes Home Economics-Youth Development, and Community some of the major efforts. It includes a Resource Development. A key component of Project research project that looks at the stress in our Support is a package of farm business management own staff--normative stressors and stress computer programs called FINPACK that allow precipated by work overload due to the farm farmers to see the financial consequences of crisis. various management practices on their farm operations. The program was developed over a period of two decades by Extension experts for Farm Fiaaacial HaAasoment use by county Extension staff, vocational agriculture instructors, FmRA loan officers, and Research and testing over a period of two bankers. With this program a county agent decades by the university's Department of anywhere in Minnesota can turn a portable Agricultural and Applied Economics and Extension microcomputer into an invaluable tool for helping farm financial management experts has led to the the farmer analyze 'xisting circumstances and development of FINPACK, a computerized financial make choices for the future. planning and analysis package. The four programs--FINAN, FINLRB, FINTRAN, and FINFLO -- But the Extension action went beyond provide a comprehensive and understandable analysis of farm management plans. The 19708 and framework for individual farm decision making. '808 research in personal and family stress produced data that was used to develop stress FINLRB identifies and compares the long- management programs for Extension staff, farm range profitability, debt repayment ability, and families, and community decision makers. financial soundness of alternative farm plans. FINFLO projects farm cash flows monthly for one Minnesota Extension Service garnered a wide year of business. FINTRAN projects farm cash range of resource people and expertise from the flows for three years of business. It is most university community to assist in research and useful in projecting cash flows for the program development. Units with participating transitional period when a major change is being faculty members include: the Departments of tmplemented. FINAN analyzes the financial Agricultural and Applied Economics and Family performance of the farm business for the past Social Science, the Center for Youth Development year. and Research, the Medical School, the Law School, the School of Social Work, and the Hubert Humphrey Public Policy Institute. These
39 Minnesota 33 When used together the FIMPACK programs youth. "Teen Suicide" gives factual information, become an even more effective educational tool. warning sips, and primary intervention They teach financial concepts through their techniques. "Helping Friends in Trouble" is application on individual farms. The programs designed for young people discussing ways they aim at strengthening the management ability of can be helpful to other teens whom they know to the farm manager as well as the decirion-making be stressed, depressed, or considering suicide. ability of the ag lender. "Supporting Distressed Young People" helps ads:Its understand appropriate communication and FIMPACK is designed for use with any record- intervention techniques when dealing with keeping system. In fact, experience indicates distressed teenagers. that the record-keeping ability of farm managers improves as they discover the usefulness and 4-H is providing leadership for an Extension importance of complete records for financial Service teleconference that will provide planning and analysis. statewide follow-up to the "Teens in Distress" conferences in October 1986. Community support teams working on programs for prevention, Family Stress is Middle Years intervention, and education on the topics of stress, depression, and suicide will gather at University-based researchers in nine states six vocational school locations in the state to participated in a study on family stress in the share their plans, programs, and questions via middle years. Data was collected from over 1,900 satellite teleconference. Expert resource people idwestern families, including some in Minnesota, will be located on the university campus in from urban and rural, farm and nonfarm sectors. St. Paul to respond to concerns and questions. The study examined the relationship between the Special attention will be given to cooperative stressful experiences of families and their coemunity programs involving 4-0 and the psychological and physical health. The findings schools. have clarified the understanding of family stress and have assisted Extension in providing more effective stress intervention and prevention Dynamics of Farm and Business Families programs for community decision-makers and families. Paul Rosenblatt and graduate students working with him in Family Social Science have carried out a series of studies on farm and Teems is Distress: Stress, bspressios, sad business families. They have published papers on Suicide the relationship consequences of economic stress in farm couples and the dynamics of farm families The Minnesota Extension Service and the involved in intergenerational transfer of the University Medical School have embarked on a farm, and a book (The Family in Business, major research study to look at the degree of San Francisco: Jossey-Bass, 1985) on the stress and depression experienced by Minnesota tensions of families in business. They are youth and the degree to which they are currently studying family relationships and grief contemplating and attempting suicide. in families that have recently had to leave Questionnaires have been collected from over farming. 4,300 high school students in 52 counties.4-H agents worked with the schools to collect this data base. Preliminary findings have been Values of Rural Families reported to the schools and the more complete data analysis is underway. A final report should In the Department of Rural Sociology, James be available by September 1986. Krile has been studying the values of rural families. The study has illuminated how problems Six conferences entitled "Teens in Distress" such as those of farm families in economic were held in Minnesota in 1985-86 in response to trouble are defined and how helping persons and community concerns about teenage stress, help are perceived. Krile has used his research depression, and suicide. The audience was as a basis for educational programs aimed at primarily youth-serving professionals--teachers, helping professionals and bankers, among others. school administrators, mental health workers, counselors, clergy, social service professionals, nurses, and county Extension agents. The keynote Rural Church Research Project presentation addressed adolescent suicide, with attention to identification of high-risk young The rural church study, under Jim Krile in people as well as an overview of research the Department of Rural Sociology, started in findings on the topic. Workshops were presented 1979 and focused on 131 Roman Catholic, United by local resource people who shared models for Methodist, United Church of Christ, Episcopalian, peer support programs, helping teens deal with United Presbyterian, American Lutheran Church, stress, interventions with depressed youth, and Lutheran Church in America, and Lutheran Church- school-based programs addressing self-destructive Missouri Synod congregations in and along the behavior. corridor of the highly controversial powerline in central Minnesota. During this first phase, Minnesota 4-H has produced three fact sheets interest centered on how characteristics of the to provide information to adults working with congregation, the clergy, and the denomination
34 Menem* 40 affected the manner in which pastors and/or Professionals in Outreach: Managing Stress in an oarishes. dealt with potentially conflictual Era of Change issues. These findings were shared with denominational leaders in the fall of 1980 ata Serving the people of Minnesota has been and conference held on the St. Paul campus. will continua to be one of the major objectives of the University of Minnesota Extension Service The second phase of the project focusedon and its professional staff of county agents, two issues that emerged from the analysis of the specialists, and administrators. Thes: 1979 data. One issue was the effect th.t yoking professionals, however, are also faced with the or creating multiplepoint parishes, has on the everpresent challenges of serving many, ways in which pastors and congregations respond responding to crises, anticipating the future, to community needs. The other issue was the and facing competing demands in the face of impact of differing lay leadershipstructures on limited resources and an everchanging economic the churches' roles in the community. and social situation.While under stress, these professionals are able to cope, to manage, and to The third phase of the research examined the develop in this challenging situation. Conducted local power structures in eight of the by the Department of Family Social Science, this communities within the study area. Special research study was designed to document what attention was given to the extent to which stressors and strains they experience, as well as congregations and/or pastors were seen as part of the coping strategies, appraisals, and the local power structure, the extent to which adaptations county agents, specialists, and locally powerful people were affiliated witha administrators make in an effort to provide particular church, and the extent to which outreach services to the people of Minnesota. members of the community power structurewere also leaders in their churches. Results Based on a survey of 1,610 households of church members in the 'tudy area, the fourth Benefits to individuals and families phase focused on the *. /s in which church members devote their time to church, family, and Critical support for fundamental farm businesP community activities. Special emphasis was decisions. Extension's farm financial software, placed on the effects that the various stages of FINPACK, has enabled over 12,000 Minnesota farm family development might have on different types families to analyze their farm businesses; 100 of organizational involvement. of these worked directly with county Extensiot. staff. Each family reached by Extension received It has been the practice throughout the 2 to 16 hours of individualized consultation ina project to try to share the findings withthe riskfree, confidential learning environment. denominations, congregations, and communities in FINPACK provided a framework for decision making the study, as well as with other members ofthe by helping identify options based on the family's profession. Much of the material has bees unique goals. summarized in various issues of Sociology of Rural Life, a quarterly publication of the Rural Reliable information about real ,roblems. Sociology unit. Information derived from university researchon farm business, stress, and family resource The project is preparing to gather data this management was presented to over 142,000 people tall in both northeastern and southwester.t in group meetings and individual consultations. Minnesota. The primary interest this time ison how the attitudes, values, and perceptions of Realistic action strategies developed. Following clergy and laity affect church response to local contacts with Extension, over 6,900 people economic crises. developed strategies to continue farming, about 1,500 planned to seek offfarm income, 730 decided to move out of farming, and 9,400 people rangy Stress, Coping, and Adaptation worked to cope more effectively with stress.
Pauline Boss, Family Social Science, has Rural Minnesota better informed. Minnesotans who included displaced farm families in her studies participated in Project Support activitieswere of family stress. She has written Extension perceived more prepared and informed than publications (e.g., "Denial," "Ambiguity: A others when they sought additional help from Factor in Family Stress Management," and has financial and social service agencies. collaborated with Ron Pitzer, Extension Family According to one bank loan officer: Life Specialist, Rural Sociology, on family stress programming. They have produced The borrowers who have previously been to videotaped talks and a film drama on a distressed the Extension office were much more in farm family. Pauline's Extension writing and control and seemed to understand their programming arises in part from participation, situation much better.... with Gerald-..e Gage, Family Social Science, in the regional study of stress management in mid Benefits to communities life families. Helping others help. Extension staff trained over 33,000 people in other community groups and
41 Minnesota 35 agencies. This training focused on farm workshop at the Red River Valley Winter financial analysis, stress management, teenage Shows, featuring work trade, agriculture, stress and suicide, and family resource and small town impact topics; and (4) a management. People attending included; series of small business workshops conducted representatives from financial institutions, in three locations in northeastern human service organisations, employment services, Minnesota, with at least 140 people in farm groups, and commodity organizations; attendance. vocational agriculture instructors; attorneys; business leaders; local government representatives; clergy; and farm advocates. PEOPLE TO CONSULT FOR FURTNER INFORMATIOW Extension staff worked with an additional 26,500 people in communities to encourage the Please contact the following people for more development and maintenance of community support information on Minnesota's efforts: networks. FIRPACK and Farm Financial Management: Richard O. Hawkins, Professor and Extension Extension Projects Ec000mist, Agricultural and Applied Economics In addition to programs already mentioned in 249C Classroom Office Building this section, the following programs are in St. Paul, 55108 place: (612) 373-1145
Helping Others Cope with Change, a stress- Family Stress in Middle Years (Support Groups) management series of workshops for Ron Pitser, Extension Specialist professionals in mental health, counseling, Rural Sociology teaching, ministry, and social service 74 Classroom Office Puilding St. Paul, 55108 Farm Couple Support Groups, for discussion (612) 376-3851 with clientele about stress management Family Stress Radio tapes designed to help families adjust Pauline Boss, Associate Professor to their changing environments and life- Family Social Science styles 290 McNeal Hall St. Paul, 55108 A four-part television series, titled (612) 376-2455 and 373-1578 "Living Resourcefully," that focuses on concepts of financial management, housing, Values of Rural Families, Rural Church Project noncash resources, and communications Jim Krile, Research Fellow Rural Sociology Volunteer Budget Consultants, Extension- 64 Classroom Office Building trained consultants who provide families St. Paul, 55108 with household financial management (612) 376-3854 information in one-to-one consultations Teens in Distress Joyce Walker, Assistant Professor Project Survive, a ten-week television Minnesota 4-H Youth Development series exploring the depth of human hardship 340 Coffey Hall caused by economic limitations of families St. Paul, 55108 (612) 373-1083 County Task Forces, which organize to discuss the farm crisis and develop a plan Impact Study of Project Support of action for their counties Kathy Mangum, Coordinator, Project Supporr 433 Coffey Hall Community Resource Directories, developed St. Paul, 55108 for farm families, which list agencies' (612) 373-5168 names, addresses, functions, and telephone numbers Project Survive, Volunteer Budget Consultants "Living Resourcefully," Radio Tapes on Life- Statewide Efforts in Agricultural Policy styles Education, which included: (1) a conference Irene Ott, Program Leader, Home Economics/ at Spring's Hill Center in Wayzata, where Family Living 250 banVers, community leaders, and 48D McNeal Hall educators gathered to update themselves on St. Paul, 55108 the national and Minnesota agricultural (612) 373-1863 situation; (2) three community development workshops on "Agriculture and Economy of Studies on Extension Staff's Stress and Coping Northwestern Minnesota" which involved over Patrick J. Borich, Dean and Director, Minnesota 200 people, including representatives from Extension Service farm organizations, 1 ng institutions, 240 Coffey Hall churches, human servi agencies, and St. Paul, 55108 farmers; (3) a Farm Family Awareness (612) 373-1223
36 Mknesota 42 Missouri Extension and Research Activities in the Rural Crisis
by John T. Pelham and Judy Heffernan
INTRODUCTION Not surprisingly, the farmers most vulnerable to the financial crisis are those with The current farm crisis continued to deepen the largest debt-to-equity ratios. An analysis in Missouri during 1985. The price ofarmland of recent data from the Missouri Mail-In Records declined 23 percent during the year. .ie total Program grouped members into three categories on decline since 1981 is now more than 40 percent the basis of equity-to-value ratio. The top for the state. The declines in northern Missouri one-third had 91 percent or more equity in their were even more severe. At the same time, prices farm, the middle group had 61 percent equity, and for many of the grains produced in the state the bottom third had 27 percent equity. The declined substantially during the year. The net group with the greatest equity-to-value ratio had result has been that a substantial number of farm an average cash income of $43,595. The middle families lost their farms during the year and category had $39,036 and the third category another large group of farm families is facing reported a net of $17,680. These figures do not major financial difficulty. include inventory changes or depreciation. When these are included the net profit was negative This has accelerated one of the major trends for two of the three categories. The highest in agriculture during this century, that of a equity category had a small positive return continuing decline in the number of farms. The ($1,486), the second had a substantial loss trend toward fewer farms is not new, but recent (-$26,163), and the third even more (-$33,912). conditions have brought the rate and amount of decline to the point that it has becomea threat In total, the annutnet worth change was a to many rural communities. Missouri had substantial decline for all farm operators.The approximately 112,000 farms in 1982, less than highest equity category lost $10,228, the second half as many as the peak number in 1935. During $49,747, and the third $51,377. Remarkably, the 1985 itis estimated that about 5 percent of the farmers in the third category appear to the most commercial farms stopped farming operationsin efficient producers by such traditional measures the state. The current forecasts are for at of efficiency as bushels of grain per acre or least that many farms to cease operationsin the pounds of milk per cow. Percent equity and lack state in 1986. of income source diversification, rather than inferior production ability, seem to be the The rate of decline was rapid during the primary determinants of farm insolvency onsome 1950s and 1960s, but the numbers stabilized farms. This contradicts the common suggestion during the 1970s. Much of this earlier reduction that the current farm crisis is the result of the in the number of farm families resulted from free market weeding out poor managers. attrition as farm youth selected nonfarming occupations and the old folks retired. During In the fall of 1985, 2,146 responses from a times of unusual distress, such as nowwhen the randomly drawn sample of Missouri farmers were "cost/price squeeze" has become sosevere that received. Forty-three percent of the respondents farm families are faced with involuntary reported no farm debt.However, only 21 percent foreclosure and bankruptcy, many familiesare of the medium-sized farms and 13 percent of the forced from farming in mtdcareer. large farms reported no debts.For each of the groups the percent of farms debt-free has During five of the last seven years Missouri declined for each of the last three years. farm operators have experienced difficult weather Furthermore, 55 percent of the operators of large conditions. Major droughts and floods have farms and 45 percent of the operators of medium- characterized four of these years. Some counties sized farms indicated that they werevery have experienced both problems in the sameyear. concerned with the debt on their farming The 1985 cash-grain crop in the northern part of operation.Again, these figures are a the state is a case in point. Early and substantial incremae over the previous years. mtdseason weather co.ditione were the most favorable in the past several years slida good- Past polls have indicated that more than to-excellent crop was forecast. An extremely wet three-fourths of the young farmers (less than 45 fall and early winter made it very difficult for years old) with large farm operations indicated farmers to harvest their crops in a number of that they were "very concerned" with the level of counties. As late as December 20, it was their farm debt. In general, the younger farm estimated that 50 percent or more of the soybean families and those without nonfarm income crop and 20 percent or so of the corn crop was expressed the most concern. still in the fields in several counties in the north-central part of the state. Many farmers The perceptions of farmers are quite who might survive the larger economic problems consistent with the views of the financial described above are finding it difficult tocope community. Surveys of farm lenders in the state with the additional hardships prod! Jed by the indicate that they expect as many as one-third of weather. all northern Missouri farm operations to face involuntary liquidation in the next threeyears.
43 Miuouri 37 The financial community itself is in some It is important to recognize that the scope difficulty. The situation of the Farm Credit of the farm crisis situation is very broad and System has been widely described in the media.A dependent upon the status of the United States considerable number of Missouri farm banks are economy. The Missouri Extension Service cannot facing increasing financial difficulties.More solve the fundamental problems in United States banks failed in Missouri in 1985 than at any time agriculture. However, the program being offered since the depression of the 1930s. The FmNA took by Extension represents reasonable response and "into inventory" more than 120 farms in Missouri commitment to help the individual families and in 1985. The vast majority of these were through communities make more informed decisions and "voluntary conveyances." At present more than related adjustments to a changing agricultural 3,000 farm operators in the state are behind in environment. their loan payments. The situation briefly described above is the The effect of the current crisis is not context in which Extension and research restricted to farmers and their lenders. activities oriented toward the rural crisis have Agricultural and consumer goods suppliers are been developed. The two sections which follow also being affected. The Federal Reserve Bank of are descriptive, not completely inclusive, of the Kansas City reported last year a survey of Tenth response of the University of Missouri and District bankers that indicated 13 percent of Lincoln University toward assisting farm rural nonfarm businesses were having severe producers, farm and rural families, and small financial troubles. communities in dealing with and overcoming these adverse circumstances. Many rural families are suffering from the crisis in ways that go far beyond farm finances. The suicide rate among Missouri farmers has EITSESION ACTIVITIES increased markedly during the last three years. Other stress-related problems, such as marital A recent USDA report recognized the Missouri difficulty, child abuse, and alcoholism, have Cooperative Extension Service as one of the been found to accompany the level of financial nation's most active in providing assistance to stress many Missouri farm families are now distressed farm families. Extension specialists facing. representing the University of Missouri and Lincoln University have combined forces to The impact of financial stress in develop a number of innovative strategies for agriculture varies across the state. It varies meeting the rural crisis head on. from region to region and from farm to farm, depending as much on local weather conditions during the last four years as on macroeconomic MOURNS Provides Pieeaciel Meuagemeat Counseling factors. Reports from the Extension field staff and other sources, however, indicate that the Instituted in the fall of 1984, MOFARMS is a counties in the northern half of the state have a not-for-profit corporation funded for two years disproportionate n, AWW of financially distressed through the Missouri Department of Agriculture farms, althoo where are counties elsewhere in and the University of Missouri to provide free Missouri wi ems just as severe. financial counseling to farm families. Twenty-six consultants, mostly retired It is r ng in one sense tc call the professionals with backgrounds in agriculture and current situat in these particularly finance, were trained at University of Missouri- distressed areas a farm crisis or even a farm Columbia to visit farm families in their homes family crisis. In these instances it is a crisis and assist them in analyzing their financial of the total rural community, a crisis resulting situations. A toll-free hotline at the MOFARMS from factors largely beyond the control of the referral center received 633 calls, from farmers farm families or the rural population. Many of in 94 of Missouri's 114 counties, in its first the affected farm families are good producers who six months of operation. To date mire i.et 800 have simply been caught with too much debt to farm families have taken advantage of the service under existing economic conditions. As service. Callers asked not only for financial their equity in land and other assets has eroded assistance, but also for legal counseling, and their debt has increased, cash-flow problems information on social services and educational have mounted. Undoubtedly some will be unable to and vocational training, and emotional support. maintain their farming operations and will have When staff members were unable to answer requests to make a transition out of agriculture. Others directly, they referred callers to other sources. may remain farmers if they act promptly in making By November 1985 MOFARMS had provided individual the appropriate management decisions. Many consultation for more than 700 families. nonfarm rural families in agriculture-related businesses are facing similar choices since there will be a ripple effect throughout the community Community Support Croups Aid Emotionally that will negatively affect small businesses that Distressed Families rely in part on the success of the farm enterprise. Thus both farm and nonfarm families Increased incidence of suicide, divorce, and in rural Missouri face an increasing burden of child abuse is an unfortunate byproduct of the economic hardship and personal stress. farm crisis. The need to involve other local leaders and agencies in combatting farm families'
38 Mimed 44 feelings of isolation and despair was recognized that of other fish farmers to restaurants and early by the Extension staff. Meetings organized grocery stores as well as individuals. by Extension specialists were held around the state to raise the awareness of ministers, As of November 1985 approximately 400 Extension councils, farm organisation Missourians had been aided by university representatives, homemaker club members, elected Extension in developing off-farm employment officials, lenders, and 4-H leaders. Linkages opportunities. Farmers' markets were created in with these groups resulted in a variety of 40 communities across the state. In southern service., including presentations about stress Missouri a four-part training program called and the movie "Country" as springboards for "Ozark Income Opportunities" addressed essential discussion, training for clergy, training for aspects of starting a new business. farmers and others in dealing with federal agencies, and emotional support groups. In Alternatives for the '80s northern Missouri, the area of the state hit hardest by the crisis, one Extension staff member Under the banner of "Alternatives for the helped a farm family with an ?MA appealprocess. '80s," a multidisciplinary group from the The appeal kept the family in its house andon University of Missouri-Columbia Colleges of its land for at least an additional year. Agriculture, Home Economics, and Public and Community Service, Lincoln University, and Support groups and Extension task force University of Missouri Extension began exploring members also developed and produced more than a variety of ways to help rural Missourians 75,000 social service resource directories, which develop alternative and supplemental income were distributed through church bulletins, ba nk sources. statements, and Extension contacts.By November 1985 total participation in the community support The home-based business project, designed to groups was 2,675 persons at 61 meetings. assist Missourians who want to establish income- producing businesses at home, began work on a Extension not only helps people directly, craft catalog, "The Best of Missouri's Hands." but also helps Missourians help themselves by The catalog will feature the juried works of 200 enlisting community sectors to aid each other artisans and will be sold to galleries and to during the rural crisis. Home economists in retail and wholesale buyers across the nation. northwestern Missouri, for example, worked with Videotapes for use by would-be entrepreneurs on local churches and other agencies to organizea how to establish a home-based business, including free "stone soup supper" at the Maysville High marketing, record keeping, and legal School. Volunteers brought vegetables and considerations, also are being developed. prepared the soup. Local businesses and churches donated eating utensils. Families were Another "Alternatives for the '80s" project, encouraged to bring their favorite games and begun last year and continuing through 1986, movies were provided for the children. An explores the possibility of increasing the objective of the program ras to create quantity and quality of alfalfa production in the opportunities for families to come together and state. In a related project early in 1985 an share in life's joys as well as its sorrows. Extension team began work on alfalfa-pelleting operations.
Farness Explore Alternative Income-Generation Also in the planning :.*-ages is a project to Projects increase forage-based beef production in Missouri. Since 90 percent of M:ssouri's beef The rural crisis has forced farmers cattle are sent out of state for finishing, accustomed to thinking only in terms of raising lean, low-cholesterol beef cattle traditional sources of revenue, suchas beef, finished on forage rather than gre. n would hog, sheep, and soybean production, to consider considerably increase incomes for Missouri new ways of generating income.To stimulate farmers. experimental income - producing activities, university Extension in 1985 funded six In the early 1900s, Missouri was a leading innovative proposals Oat brought fertile ideas producer of horticultural products. In these to fruition. The projects, submitted by rural economically distressed times some farmers are Missourians, included production ofa special again considering production of strawberries, type of mushroom for consumption in domestic and blueberries, melons, grapes, and other fruits and foreign markets, a unique design for construction vegetables as a cash-generating alternative. of a low-cost utility building, invention of a Under the direction of Lincoln University device to keep farm ponds free of ice, horticulturalists, a computer data base of development of a rural secretarial service, and research and production information is being formation of a craft guild. The maximum funding developed as a resource for interested growers for any project was $2,500. around the state. Demonstration test sites for horticultural products also are planned. One central Missouri recipient, Ron Macher, once a conventional livestock farmer, now raises An alternatives referral center and catfish and prepares them for market in his newly clearinghouse, established in 1985, will become converted machine shed. His processing plant is fully operational this year. A computer software state-approved so he can sell his own produce and package, to be distributed to Extension centers
45 Missouri 39 and made available for purchase by individuals, In general, FAPRI has been involved on an will list myriad ideas for economic development active basis in major policy research at the used successfully by individuals and communities national level. It has the capacity to around the nation. In addition, a "Catalogue of quantitatively evaluate national and Ideas" is being printed to guide groups through international economic factors that impact U.S. the process of exploring economic development agriculture and the consequence of alternative alternatives in their communities. farm policy and program proposals and different segments of the society. Womack and his staff have provided both a Employment Workshops detailed analysis of the present situation (who is affected, in what ways, to what extent are In 1985 a series of 12 employment workshops, they affected, etc.), as well as projections for sponsored by an interdisciplinary team of the likely length of the crisis given various Extension specialists in cooperation with sets of circumstances and/or policy community groups, offered help in personal skill implementations. assessment, resume writing, and interviewing. Counselors from the University of The numerous and timely reports produced by Missouri-Columbia Career Planning and Placement FAPRI are used by extension farm management Center offered tips on networking and other job specialists to help farm families evaluate their search skills. Panels composed of local present and future situations. The reports and employers shared their expectations of employees congressional testimonies have also been used in and employment prospects in their companies. The policy deliberations and for public education employment workshops were just one avenue of through the media. education offered by Extension specialists to aid victims of the farm crisis. Department of Rural Sociology
RESEARCH ACTIVITIES Professor William D. Heffernan--314-882-4563 Research Associate Judith B. Heffernan- - The major research efforts of the University 314 -882 -7232 of Missouri that have focused directly on the impact of the rural crisis on families and A study was done of the social, emotional, communities have come primarily from the and psychological consequences for farmers and Department of Agricultural Economics and the their families of being forced out of farming for Department of Rural Sociology. Related research financial reasons. In this first-of-its-kind is taking place in the School of Social Work, the study, the data were obtained during lengthy College of Home Economics and the School of personal interviews with 40 of the 44 families Medicine. A brief overview of some of the major identified as having been financially forced out research follows. Information on available of farming from January 1,1980, to January 1, reports and publication of results of the 1985, in a major agricultural county of the projects can be obtained by contacting the state. researchers listed. The data showed extremely high levels of stress and depression in the families. The study Department of Agricultural Economics documented the tremendous personal pain associated with losing the family farm that is Missouri Agricultural Finance Survey 1986 experienced by the farm couple as well as their Professor J. Bruce Bullock--314-882-3545 children of all ages.
The recent study of over 2,000 farmers and Wide variations in support received by the other studies by Bullock and his colleagues have families was noted. Without major assistance, sought to identify the number and characteristics between one-third and one-half of the families of farmers and farms affected by the rural may never again be able to fully function as the crisis. The data have been analyzed to show productive members of society they once were. differences in impact by regions of the state, by principal farm enterprise and by age of the farmers. Missouri Farm and Rural Life Poll
Professor Rex R. Campbell--314-882-6358 Food sad Agricultural Policy 'Research Institute Professor William D. Heffernan--314-882-4563 (FAPRI) This annual statewide poll with a response Professor Abner W. Womack-314-882-3576 from over 2,000 farmers has focused on farmers attitudes, perception of the ?roblems facing The Food and Agricultural Policy Research farmers and policy options farmers favor. Data Institute (FAPRI) is a joint university project have been collected over a three-year period on with the Center for National Food and the farmers' concern with farm debt and farming Agricultural Policy at the University of plans for the next five years. Missouri-Columbia and the Center for Agricultural and Rural Development at Iowa State University. 46 College of Nome Economics School of Social. Work
North-Central Region Committee 164 Professor Joanne Mermelstein--314-882-6206 Professor David R. Imig--314-882-3025 Professor Paul Sundet--314-882-6206
A study conducted cooperatively in nine Professors Mermelstein and Sundet are states looks at family stress in the middle examining various aspects of rural social years. While no attempt was node to focus on services evolving from the rural crisis. the rural crisis, results of this research are Attention has focused on the special needs applicable to farm families under stress. professionals in mental health organizations Materials are being developed from this project perceive as resulting from the farm crisis and for use by extension personnel who work with the resources needed to meet these special needs stressed families. of a rural community.
Other Related Research School of Medicine
Professor Marion Typpo--314-882-4649 Professor Barry Kling--314-882-4105
Research by Typpo on families and especially Rural health delivery systems face many children impacted by alcohol abuse and family challenges as a result of population shifts and violence is increasingly relevant as rural changes in technology. The current rural crisis families under stress exhibit these reactions. leads to additional strains. Professor Kling is working with other health agencies to determine Professor Robert Weagley--314-882-6270 the consequences of the financial crisis in rural areas on the health of the people and Weagley is beginning a long-term study of implications for the delivery system. the financial behaviors of farming families.
47
Missouri 41 Short-term and Long -term Approachesto Easing the Farm Crisis: The University of Nebraska's Response
by Deborah Rood and John De Frain
Nebraska has always been known as Si SHORT-TRIM OR EMERGENCY PROGRAMS agricultural state. It follows, then, that when agriculture is in a crisis so is Nebrasxa. In a Farm Financial Information Line survey conducted by the Nebraska State Department of Agriculture in January 1986, theavarage Farm and ranch families have two main debt-to-asset ratio for farmers in the statewas methods of contacting the Extension Service when 34.3 percent. Twenty-three percent of Nebraska they need help. In addition to the traditional operators have a debt/asset ratio between 40 and approach of contacting their local Extension 69 percent. Another 13.8 percent him a debt/ agent, they can .all the farm financial asset ratio of over 69 percent.Of the information line. This is a toll-free call for respondents to the survey, 6.4 percent do not anyone in Nebraska. Since this line was opened plan to operate in 1986 and 15,8 percent do not September 1, 1984, over 3,000 calls have been plant to operate in 1987. received. Ca!lars typically need additional information on the Managing for Tomorrow program, This has a staggering impact on today's want a financial counselor to call on them, or agriculture, as well as on the future of have a financial question that can be answered on agriculture in Nebraska.The needs and problems the phone. that come to the forefront for individuals, families, and communities are as many and varied as there are people. While we feel that each Farm and Ranch Financial Counseling family and each situation is different, thereare projects that can provide basic information and Financial counseling is provided free of help to these people. charge to families who need immediate help in assessing their financial situation and It is hard to discuss the needs and problems evaluating alternative solutions to their of an individual without talking about the problems. Four hundred fifty families were given family. What touches the individual, be it a assistance through this program from February to farmer, farm wife, or child, also touches the April 1983. Counselors assisted them in family. In Nebraska, the needs of individuals preparing balance sheets and cash-flow plans, and families include financial planning, legal evaluating alternative plans, and filling out advice, stress management, communicationavenues, FuBA loan application forms. Families emotional support, and transitional help when a appreciated this assistance, but most often they family must leave farming. Communities are also said they appreciated having an unbiased person seeing the impact that the farm crisis is having to talk with about their farm business on main street business. Churches are seeing a situation. decline in giving and a drop in attendance. Many rural people are feeling a sense of quiet Funds for the variable cost of operating desperation and have no idea of whom to turn to this program were provided by the Nebraska for help. Department of Agriculture. Fourteen persons served as counselors. They worked from all five The fern crisis has also given people in of the university's research and Extension farm management and human development that centers as shown in Figure 1. "teachable moment," so while we need to work with the families who are undergoing great financial Following are some examples of how stress, it is also an opportune time to work with counselors met the needs of the farm and ranch families who may not be "feeling the heat"as families: much as others. The time is right to put into place good management prezt-ices that will have farmer was unsure of what his records long-term benefits to agriculture in Nebraska. were saying. Our counselor was able to assure him that he was interpreting them The following report talks about the correctly. programs in Extension and the research projects underway at the University of Nebraska. The Another client was having difficulty Extension programs are divided into two groups: getting an operating loan from his bank. short-term "emergency-type" programs, and After working with our counselor in putting long-term programs that will benefit families in together a financial package, the operating the future as well as the present. loan was approved.
Many farmers and ra chers were looking for help in working Pith their lenders. Our counselors helped each work with their records and the producers felt that they were better prepared and had more numbers to back them up when they met with their lenders. 42 Nebraska 48 Figure 1:
'WEE VGJIM VOLCUMILLELJECCOULAJCLIO
HOOPER 1Fort Calhoun i %
* RESEARCH AND EXTENSION CENTERS FINANCIAL COUNSELORS
Figure 2:
VOUN OVE0000 LIVEEMOOLUO*
OVerdi re *O'Neill *Ainsworth Mayne Neligh10_2Walthill W Nor.1folk West cottsbluff *Stanton Point
B sport Blair Oshkosharrisburg %
°kings *Minden
1984 *1985 1986 PLANNED Includes training of Extension Agents end other profossionals
49 Nebraska 43 In cases where the decision was whether facilitated 270 stress-management workshops a farmer would stay on the farm, a counselor across Nebraska in the past decade--48 workshops helped them do a financial analysis of their last year alone. Rottmann reports the demand for operation and, just as importantly, gave such workshops is literally overwhelming,. them moral support in making a hard decision. Assistaace to Castomera of Failed Racks The Farm and Ranch Financial Counseling program is being offered again this winter. This Assistance was provided to clients of failed program began December 1. Funds for the variable banks in eleven communities. Extension agents costs of the program are being provided by the and specialists assisted families in preparing University of Nebraska Foundation and it will their "financial portfolios" for presentation to again be available at no cost to farm and ranch other lenders, filling out FmliA loan application families requesting the service. Ten of the forms, and evaluating alternatives for fourteen counselors who served last winter will reorganizing their operations. A set of continue as financial counselors. guidelines for an Extension agent's response to a bank closing were developed and distributed to agents in September. Szteasioa Staff Iasernice !relates
One hundred thirty Extension agents in Sebgeide Series ea Legal 'saws Relating to Agriculture and Rome Economics participated in liainicial Stress three days of intensive training in early October. The topic of the training session was Drafts of six Nebguides are currently being "Dealing with the Farm Crisis." They gained reviewed. These guides address commonly asked skills in counseling and financial analysis questions about legal and tax problems associated through work with case studies. Response to with financial stress.Additional Nebguides will this training was very positive and another be added to this aerie,. The purpose of this two-day training session has been requested for series is to provide an unbiased source of December. Training sessions such as these are information on sensitive topics such as enhancing the skills of those who have been bankruptcy, tax implications of loan write-offs, working with financially stressed families and property interests, and how to select a lawyer. giving basic training to those who feel they need some training before they work directly with families on their finances. LOIIG-TERX PROGRAM
This redirection of Extension agent's Meaning for Tomorrow efforts represents a major reallocation of existing resources. Agents are developing The Nebraska Cooperative Extension Service programs to address problems unique to their has developed a comprehensive education/ counties. Examples of activities planned for consultation program to help families improve the this winter include: teaching financial long-term profitability of their farm or ranch management and farm record keeping, developing business. Six hundred farm and ranch families and publicizing community resource inventories, participated in Managing for Tomorrow last encouraging the growth of support groups, and winter. Managing for Tomorrow is continuing this organizing a network of neighborhood hotlines. winter. Dr. Lucas, Dean and Director of the Nebraska Cooperative Extension Service, has suggested to The Managing for Tomorrow program is helping the county staff that at least 50 percent of farm and ranch families develop long-term their resources should be directed to helping management strategies for survival and profit. farm and ranch families with financial Financial analysts instruct, encourage, and coach management. the families in evaluating their personal and financial situations. Family members jointly develop goals for their business and family. Farm Stress Workshops These goals become the measuring sticks for determining their success. This process was a As shown in Figure 2, Extension specialists valuable experience for many families. Comments have conducted numerous farm stress workshops such as, "We haven't talked about the farm this during the past two years. Some of these much in twelve years of marriage," and, "I had no sessions were specifically for training helping idea my husband felt that way about the farm," professionals (clergy, mental health workers, and were heard often. Following is a brief case Extension agent1), who in turn work directly with history which demonstrates the value that goal people in rural areas.The majority of the setting had for one family: sessions helped farm and ranch families recognize symptoms of stress 'verload and how they could A south central Nebraska farmer in his develop skills for remaining in control of their mid-50s was relating a story to illustrate lives. Since October 1983, 2,347 people have his satisfaction with having participated in participated in these farm stress workshops; Managing for Tomorrow.A paraphrased since October 1984 the number is 1,630. version of his remarks is presented here.
Dr. Leon Rottmann, a Rumen Development and My wife and I and our two single sons Realth specialist in Cooperative Extension, has who are in their late 20s were enrolled in
44 Nebraska 50 Managing for Tomorrow. At the end of the and ranch operators who will be "managing for first workshop, when nearly half the time tomorrow." had been spent on GOALS, I went home thinking that it wasn't worth going back. But I did go back, and at the end of the Women is Agriculture - -Building the Future second workshop, when we had again spent nearly half the time working on GOALS, I Farm/ranch women are interested in taking a went home convinced that I wouldn't go back. more active role in the management of farms and But I did go back, and all of us completed ranches. This became apparent in the evaluations the four workshops. received in the Managing for Tomorrow program. The women generally felt that they would like to The real story, though, is this. For learn some management skills in an environment the last several years the wife and I have which included other women like themselves.A just assumed that anything we wanted the conference was held in Kearney in September, boys were against, and that anything the "Women in Agriculture--Building the Future." The boys wanted we would be against. As we conference was planned for 100 persons. Two worked on the GOALS, we came to realize that hundred eighty women attended, representing more deep down we all wanted the same things and than two-thirds of the counties in Nebraska. The that we really were headed in the same interest in this type of conference was so great direction. that Extension agents held six more conferences in their districts. Around our place it's been the most peaceful summer that we've had in years. It is certainly logical for the farm/ranch And I'd recommend Mauaging for Tomorrow to woman to get involved in management.When we anyone without qualification. Everyone in consider the wide range of management skills that farming ought to be in it. are required in producing, financing, and marketing on a diversified farm, it is more than The goal-setting process was also valuable one person can stay on top of at all times. for families who found that it was necessary to There are gains to be realized from division of scale down operations or to get out of farming. management, just as there are from division of "The Managing for Tomorrow program helped us in labor. These conferences are helping develop a establishing new goals and to maintain a valuable resource. positive attitu4e toward our transition," was a comment from one family who decided, after analyzing several alternatives, that they should Coals Conference not continue in farming. Another outgrowth of the Managing for Guiding families through the process of Tomorrow program was a conference in September in evaluating their human and financial resources which 45 persons from 12 states and Canada came takes time. Four all-day workshops, each a week to Lincoln to be trained in the use of the goal- apart, compose the first part of the program. setting materials. The concept of helping Financial analysts then meet with families families establish realistic goals as the first individually to guide them through the analysis step in working with them is sound. The of their personal situation.Managing for materials developed for the Managing for Tomorrow Tomorrold 111 an educational program. The goal of program are the most comprehensive and effective the program is to provide families with the tools set of goal-setting materials that has ever been and skills they need to repeat this planning and developed specifically for use by farm and ranch evaluation process on their own year after year. families. The financial analysts do not tell the families what to do. They help the families through a Two states, Ohio and South Carolina, have decision-making process. "We knew we had held training sessions on the goals riaterial problems, but didn't know that we needed to take taught by members of our Managing for Tomorrow action immediately," was the comment from a staff. family whose financial analysis showed that their $200,000 net worth was eroding at the rate of $50,000 per year. Farm Business Association
The participating families pay a fee of $200 The Cooperative Extension Service continues each. The actual cost of the program is about its sponsorship of the Nebraska Farm Business $1,000 per family. The remainder of the cost is Association. This is a self-supporting group of paid from grant funds and reallocation of 330 farm families who are dedicated to keeping Extension staff resources. Grants have been records and using them for better management of received from state legislative appropriat4.ons, their businesses. This program began in 1976 and the Nebraska Department of Agriculture, and the continues to be a valuable resource for those Extension Service (ES)/USDA.We hope that grant enrolled. A consultant, hired by the families, funding will continue so that more families can works with each of them on analyzing and take advantage of this program in years to come. interpreting their records. We feel that this program will produce a positive impact on the Nebraska agricultural sector through the development of a core group of farm
51 Nebraska 45 Operative Shoehorn all over the state of Nebraska. Farm women are especially interested in the program. Many families who participated in Managing for Tomorrow realised that they needed better records. They wanted to learn to do their own EESEARCE records. Operation Shoebox has been developed to meet this need and will begin in January 1986. Building Family Strengths It is a do-it-yourself records system. Instructors will provide instruction and computer Under the direction of Dr. Nick Stinnett and resources for the families. The participating other researchers in the Department of Human families will pay the variable costs of this Development and the Family, 30 different master's program. theses and doctoral dissertations have focused on family strengths and strong families; 4,000 families, from every state in the United States, Managing for Tomorrow II have participated in these studies. One recent study, by Dr. George Rowe and Dr. Herb Lingren, Many of the families participating in focused on the strengths and stresses of 500 Managing for Tomorrow expressed a need for a rural families. The most significant finding of continuing relationship with the program. There the family strengths research over the years has were areas of subject matter in which they would been the qualities of strong families: like additional training and they wanted an commitment, appreciation, communication, time opportunity to update their analyses each year. together, spiritual wellness, and the ability to A two-day program was offered to Managing for cope with stress and crisis. Tomorrow alumni in January.It gave them a refresher on goal setting, computerized financial The research is best summarized in a analysis, and a day of instruction on marketing. recently published book, Secrets of Strong
Families (Boston: Little, Brown & Co. . The family strengths research at Nebraska and other Interactive Videodisc Instruction in Cash-Flow universities was the subject of a recent Planning congressional hearing before the Select Committee on Children, Youth and Families in the U.S. Our staff is developing an interactive capital. videodisc instruction program which is on the cutting edge of technology. The videodisc will Dr. Herb Lingren, a Family Life specialist teach farmers and ranchers how to develop and use in Cooperative Extension, conducts four to five a cash-flow plan. This project is funded with a major conferences on building family strengths in grant from ES/USDA.The motion and color of the Nebraska each year.The Department of Human videodisc, combined with the capabilities of the Development and the Family also sponsors the microcomputer, make effective, realistic National Symposium on Building Family Strengths instruction possible at any time and place. in Lincoln each May, drawing several hundred Evaluations of previous instructional efforts presenters and participants from 35 to 40 states. with interactive video have shown that subjects Sister conferences on family strengths have been learn faster and retain more than with live established at Pennsylvania State University and instruction. This, and possible future Pepperdine University in Los Angeles. videodiscs, should make it possible for farmers and ranchers to learn and relearn procedures, The family strengths research is seen as a like cash-flow planning, without the time and long-term approach to enhancing the crisis- travel expense of Extension specialists. This is meeting resources of families. a long-run investment and is a national demonstration project. It is an example of the leadership role of the Nebraska staff. The Changing Structure of Rural Nebraska Communities:Evaluating Economic, Sociological, and Psychological Impacts from the Current Tracking Household Expenses Agricultural Crisis
Dr. Kathy Prochaska-Cue, an Extansion Family This research will evaluate the effects of Economics specialist, has worked with the Ag the farm crisis on rural Nebraskans and their specialists on their Managing for Tomorrow communities, and delineate possible longer-term program and put together program ideas for better structural changes occurring in rural tracking of household expenses, cutting costs in communities. Faculty involved in the research time of crisis, and finding community resources. project include: Dr. Bruce Johnson, Department of Agricultural Economics, UN-L; Dr. Duane Olson, Department of Agricultural Economics, UN-L; Rome-Based Businesses Dr. John Yanagida, Department of Agricultural Economics, UN-L; Dr. David Scott Hargrove, Dr. Janet Wilson, a Consumer Education Department of Psychology, UN-L; and Dr. Richard Extension specialist at the University of Meile, Department of Sociology, UN-L. Nebraska-Lincoln (UN-L), has developed a workshop on starting a home-based business, and has presented her program at 20 different conferences
46 Nebraska 52 Family Strengths in the Middle Tears Both husbands and wives reported these events to be stressful, but they ranked the events in Finally, itis important to mention the work slightly different order: wives perceived of the North Central Regional Research Project family-related matters as more stressful, in (NC-164). The project has findings which are general, while husbands saw job-related and very germaine to those involved in trying to ease financial concerns as more stressful. the farm crisis. The researchers found that stressors have an University-based researchers in nine states additive effect. That is, if they tend to pile are in the final stages of a study on family up, one on top of the other, the final straw can stress in the middle years. More than 1,900 break the camel's back. The higher the stressors families responded to a 27-page questionnaire pile up, the more likely a family is to which looked at the stressors families faced and experience emotional, relational, and health how they responded. The study is the largest of difficulties. In short, the more troubles we its kind ever undertaken and its preliminary have, the more likely we are to become physi,ally results are worthy of serious study. and emotionally sick.And our family relationships suffer because of the stress. The research focused on intact families with husband, wife, and at least one child still The researchers found that one typical living at home. The parents were in their middle scenario in the middle years goes like this: A years and children were about to leave home or family with teenagers experiences the typical had recently left. Past studies tended to focus adolescent problem we all can describe, on families with young children or families of including pimples, dating, busy schedules, and the elderly. everyday worries. About the time the oldest youngster is to leave home and the family has to This study dubbed the middle-aged parent adjust emotionally and financially to molft, a "the sandwich generation" and found that it is grandparent falls and injures a hip. This difficult for couples in this period to find the requires hospitalization and at least temporary time and energy for their own wants and needs. placement in a nursing home. If a parent loses a job at this time due to an economic downturn, or Types of Stressors the family business goes to pot, the family may feel overwhelmed by problems. The researchers studied families in Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Stress-Related Symptoms Minnesota, Missouri, and Nebraska and found that the families who had large numbers of changes The middle-aged parents in the study were occurring during the last three years experienced asked to report symptoms of stress they saw in higher levels of stress than other families. The themselves and in each child still living at families rated each type of change according to home. The list below begins with the most common their perceptions of the stress they cause. symptoms of stress and proceeds to the least Below is the ranking the 3,800 individual parents commonly reported symptoms: in 1,900 families gave to each stressort 1. Irritability 1. Family member involved with the courts 2. Problems with weight 2. Family takes a major financial loss 3. Muscle tension and anxiety 3. Member experiences major emotional problems 4. Use of prescription drugs
4. Child has serious illness/accident 5. Difficulty relaxing
5. Major wage earner has serious accident! 6. Use of tobacco illness 7. Depression 6. Marital separation 8. Headaches 7. Death of adult brother or sister 9. Frequent colds or flu 8. Major wage earner loses/quits job 10. Difficulty sleeping 9. Death of husband or wife's parents 11. Use of alcohol 10. Aged parent becomes ill 12. Accident proneness 11. Expenses exceed total family income Parents generally reported more symptoms of 12. Relatives become intrusive stress than children. Wives reported more symptoms than husbands.
53 Nebrulis 47 Financial Pressure The researchers concluded that physical and emotional problems can be indicators of high The data for the study were collected in stress levels and if the signs appear in a 1982, mainly in the Midwest, and are still being family, people need to find help. First and analyzed. This was in the midst of an economic foremost the researchers recommended talking. down-turn foie the midwestern agricultural sconomy Don't try to do it all alone;it simply can't be in general and the United States as a whole. done. Talk to other family members, to Many families experienced financial pressures and relatives, to friends. Counselors and support developed a number of ways for saving money in groups in the community can also be helpful. The tight times: researchers also stressed the importance of proper nutrition, adequate rest and sleep, plenty 1. Eat at home more often of exercise, and fun activities in what can get to be a dreary, repetitive life. (The source for 2. Spend less on entertainment and this section was the North Central Regional recreation Committee 164, Agricultural Research Service, U.S. Department of Agriculture, Washington, D.C. 3. Spend less on clothing The material was adapted from a preliminary report by the Cooperative Extension Service, Iowa 4. Spend less on personal improvement State University, Apes.)
5. Spend 'ess on laundry and dry cleaning EXTENSION PROGRAMS AND RESEARCH PROJECTS FOR THE 6. Do more clothing repairs and alterations FUTONS
7. Seek less medical care The possible areas of study and programming are limitless. In Nebraska we see a potential Other tips the families offered for saving for a number of research projects and Extension money included: using store coupons more often, programs. The future in Nebraska will include using self-serve gas, increasing spending for continuing the programs that we now have in place store refunds, buying on sale and specials, and, as funds allow, adding new programs and calling long distance at cheaper rates, home research projects. growing fruits and vegetables, increasing canning and freezing of foods, making gifts instead of The major research area that we see is a buying them, servicing and repairing the car "rural refugee" study, dealing with displaced yourself. farm/ranch families. This study would look at how families cope with the stress of change, Coping with Stress where they go for support, how they deal with reassessing their goals, and how they go about The families were asked how they coped with finding a job. This study could give us insight the many life stresses in general. They ranked into dealing with the large number of families their stress-management techniques in descending that will be displaced by this farm crisis. An order: interesting aspect could be the difference between states where displaced farmers have ready 1. Attending church services opportunities for employment within commuting distance and states where families will have to 2. Sharing concerns with close friends relocate to find work.
3. Facing problems head-on and trying to find The effect of the farm crisis on communities solutions needs to be researched. A program that helps assess the strengths and weaknesses of a 4. Participating in church activities community is needed. If a community can decide what their needs are &no how they can meet them, 5. Sharing difficulties and doing things with they would then have goals that they could work relatives toward.
6. Seeking information and advice from the In the area of Extension programs we see a family doctor great need in facilitating the sharing of solutions. In Nebraska we have found that farm 7. Seeking information and advice from families are their own best teachers. Families persons in other families who have faced can be very creative in finding solutions on how similar problems to stay in farming, how to get back into farming once they have sold out, and how to adjust to 8. Asking for and accepting help from life without farming. While we must continue to neighbors teach the basics of farm management to farm and ranch families, we also need to address the 9. Seeking help from community agencies and personal side with the help of people who have programs been through "the fire" and have come out on top with their family life and self-esteem. 10. Seeking professional counseling
48 Nebroka 54 The farm crisis has given us fertile ground for research and Extension programming.The topics discussed above are just a few of the pressing problems ag families are facing. Our resources do not permit us to do everything we would like to. We must set priorities and move on. Every day that we waste, another family is not helped. We must be aware of the human toll this crisis is taking and how we are impeding the process by not reaching out. Extension and research staff 'embers need to work closely so that Extension specialists can usa preliminary research tesults in helping families now. We must break down the old boundaries of waiting five to seven years for results; the cost is too high. We must use the knowledge that is gained the first year and the second year to help the families that are going through the process.Now is the perfect time to blend research and Extension together for the good of the families in the farm crisis.
55
Nebraska 49 Coping with the Farm Crisis in North Dakota
by F. Larry Leistritz, Arlen Leholm, and Harlan Hughes
INTRODUCTION ratios in the ranges generally associated with considerable financial stress. The farm debt, high interest rates, and the cost-price squeeze in agriculture have caused a Debt-to-Asset Ratios financial crisis for many North Dakota farm families. Many farm families, as well as many No Debt 16.7% families in rural towns, are faced with declining 1-40 percent 45.2 income and the related problem of inadequate 41-70 percent 23.4 family living incomes. North Dakota farmers and 71-100 percent 14.7 rancher. are facing their most severe financial crisis since the 1930s. 5. The relationship between the debt-to-asset ratio and farm families' ability to meet A 1985 telephone survey of randomly selected cash-flow needs is summarized in Table 1. North Dakota farm and ranch operators identified Two-fifths of all farm operators surveyed key financial and demographic characteristics of had levels of total family income which farm operators and their families.Nine hundred were insufficient to cover family living thirty-three farmers completed the survey for a expenses. For farm operators with no response rate of 77 percent. Initial screening debt, about 20 percent appear to be questions were used to ensure that all experiencing problems in meeting immediate respondents were less than age 65, were operating cash-flow needs. Sixty percent of those a farm, considered farming to be their primary with debt ratios over 70 percent are occupation, and sold at least $2,500 of farm experiencing cash flow problems. produce in 1984. Some of the findings of the When principal payments were also taken survey are: int account (see bottom half of Table 1), more than half of the operators surveyed 1. Seventy-two percent of the farms had gross had income levels insufficient to cover incomes in the range of $40,000 to operating costs, family living expenses, $250,000. and principal parments. Of those with debt ratios over ,0 percent, about 90 2. Although net cash farm income averaged percent could not cover these cash $14,897, 24 percent of farm operators in expenses. It has been estimated that $375 North Dakota experienced zero or negative million would have been needed in North net cash farm income in 1984.1 Dakota alone to offset the shortfall experienced by these farm operators in 3. Respondents' estimates of the value of 1984. The significance of this becomes their total assets as of January 1, 1985 quite apparent when one considers the fact averaged $423,042 and their debts averaged that the current annual general fund $139,870. The average North Dakota budget for North Dakota is about $563 operator was carrying approximately 33 million (Leistritz et al. 1985). cents of debt for every dollar of assets he controlled. 6. The debt ratio is strongly associated with the age of the operator and the year that 4. At current prices, input costs, and asset he started farming. Of the North Dakota values, most commercial farmers begin to operators with no debt, 60 percent are experience difficulty meeting principal over age 35 and 82 percent are over 45. repayment commitments at debt-to-asset On the other hand, 67 percent of those ratios (debt ratios) around 40 percent. with debt ratios over 70 percent are under Above 70 percent, most farmers have age 45. of the operators with difficulty meeting even their interest no debt,70 percent began farming before payments and other current expenses. As 1959, 'while out 64 percent of those with indicated below, approximately 38 percent debt ratios over 70 percent began farming of the North Dakota farmers had debt after 1969.
7. When the education levels of North Dakota farm operators and spouses are categorized 1 Net cash farm income is defined as gross farm by debt ratio, it is evident that the more income less gross cash farm expenses and highly leveraged famili2s (whA tend to be depreciation. Net cash farm income does not take younger than averag,' generally have into account principal payments or changes in attained h;;her levers of education. This inventory of grain and livestock products during additional ew.ca.ion should prove the year. ad "sntageous if and when these operators and their families consider leaving the farm for other employment.
50 North Dakota 56 8. A major concern to the public services in trained to work with farm families on an rural communities, such as school systems, individual basis to help analyze farmers' is the impact that farm families leaving financial situations and to identify the community will have. The more highly alternative solutions to farmers' leveraged farmers have above-average financial problems. The analysts worked numbers of school-age children. If farm with about 700 farm families, averaging 16 families from the more highly leveraged hours per farm family.This program is groups are forced to leave their rural being continued in 1985/86 with communities, the reductions in school approximately 50 analysts and we expect to enrollments could be substantial. serve over 1,000 farm families.
9. Approximately 25 percent of the operators 3. Farm and family goals and family financial were employed off the farm in 1984 (Table management: This program was initiated in 2). An association between off-farm work cooperation with the Extension Home and the farm's debt ratio is obvious.The Economics faculty. It includes emphasis percentage of operators working off the on a procedure to encourage families to farm ranges from 16 percent for farms with identify farm and family goals and to use no debt to 36 percent for those with debt family financial management to help ratios over 70 percent. Similar patterns achieve these goals. This was included as of off-farm employment were noted for farm part of the two-day financial management operators' spouses. workshops. Also, field staff were trained to conduct local meetings for farm couples. IITEESION PROJECTS 4. One-day farm management, enterprise The objectives of North Dakota's Cooperative analysis, and credit use workshops: Extension Service's program in financial Workshops include enterprise budgeting, management are to help farmers and farm families cost analysis, time value of money, better ut.derstand a 'road range of management coordinating management, and developing topics, including: financial management and written marketing plans. decision making, risk management, enterprise analysis, determining costs of production,crop 5. Farm records and analysis: County agent and livestock budgets, farm records, economic training on farm records were conducted so value of land, rental rates and leases, farm that these agents could teach farm records business organizations, partnerships, estate to local clientele and provide information planning, income tax management, and other topics on record keeping and analysis to farmers. related to achieving farm and family goals. A new record book was developed this past summer in cooperation with adult vo-ag Specific program emphases in farm financial staff. This new record book corresponds management during the 1984/85 and 1985/86 directly to the cash-flow record keeping Extension years were: and the financial analysis that was taught in the finance 1 management workshops. 1. Two-day financial management workshops: Approximately 45 two-day and several 6. Annual two-day Northwest Farm Managers one-day financial management workshops for Conference: This annual event, which farmers and farm couples were held over includes invited speakers on current farm the state in the 1984/85 program year. management concerns, is implemented by Over 2,000 people attended these intensive research and Extension staff in workshops. Five two-man teaching teams cooperation with the Farm Managers Board were comprised of farm management, of Directors. marketing, and community development faculty, and two area farm management 7. Conferences with agricultural credit agents. Thirty-one additional workshops agency staff: Six conferences are held were held in the 1985/86 program year. over the state each fall for agricultural credit staff from banks, PCA, FmHA, and Major subject matter for these Fede-al Land Banks. These are afternoon- workshops included farm financial evening sessions for discussion of management, using the balance sheet, financial conditions of farmers, commodity income statements and cash-flow budget, price outlook, and an overview of setting farm and family goals, and Extension programs on farm management and understanding family financial marketing. management. 8. Economic input for production agriculture 2. Farm financial analyst program: In programs: Cooperate with Extension staff 1984/85 North Dakota's Cooperative in production disciplines for economic Extension Service initiated the Farm analysis of crop and livestock production Financial Analyst Program in response to practices. the financial crisis on many North Dakota farms. Grant funds were received to help support the program which was implemented with the cooperation of the agricultural credit agencies. Fifty-six analysts were
57 North Dakota 51 WW= ACTIVITIES Table 1.Cash-flow Analyses by Debt-to-Asset Ratio, North Dakota Major research activities which have been undertaken to deal with the current financial No Debt I-40% 41-70% 71-100% Total crisis in North Dakota's agriculture are: Simulation I
1. A telephone survey of randomly selected Total farm family farm operators conducted March and April Income less family 1985 to identify key characteristics of living expense farm operators and their families and to provide insights concerning (a) adjust- Average 530,023513,243 5701 S-5,258$10,102 ments likely to be faced by the affected Distribution: farm operators and their families and Negative 19.9% 35.9% 53.6% 60.1% 42.0% (b) impacts likely to be experienced by 0 to $19,999 35.4 37.0 35.2 32.1 35.6 agriculturally dependent rural 520,000 and communities. Results from this study were WNW 44.9 27.1 11.2 7.8 23.5 summarized above and considerably more detail is available in several research Simulation 2 reports and papers (Lehol et al., 1985; Leistritz et al., 1985). Total farm family income less family 2. A study of farm - dependent communities in living expense and North Dakota was initiated October 1, 1985 principal payments with partial support from the Agricultural and Rural Economic Division of the Average 530,023 $4,909S-19,9'05-31.4965-2,075 Economic Research Service, USDA. This Distribution: research will focus on the relationships Negative 19.8% 51.2% 80.5% 89.1% 59.2% between the farm sector, the agribusiness 0 to 519,999 35.4 28.6 15.1 9.31 23.9 sector, and rural communities, with 520,000 and special emphasis on the relationship over 44.9 20.3 4.4 1.6 18.0 between farm financial stress and community economic well-being.
3. North Dakota State University researchers have cooperated in analysing results of the Farm Finance Surveys conducted by the Table 2. Off-Farm Work Participation of North Dakota Farm Statistical Reporting Service (SRS) in Operators and Spouses by Debt-to-Asset Ratio cooperation with the North Dakota Department of Agriculture (Pederson No Debt 1-40% 41-70%71-100% Total et al., 1985). ------Percent Operator amp toyed 4. A program of legal-economic research has off the farm In focused on alternatives for financially 1964 15.7 22.3 27.9 36.2 24.6 stressed farmers. An early product of this work is a report on "Tax Implications Spouse employed of Liquidating a Farm Operation" off the farm In 1984 (Saxowsky et al., 1985). 21.0 30.3 34.6 38.0 31.0
CONTACT !MOSS REF MEWLS A. Research
North Dakota 1. Larry Leistritz (701-237-7455) Tare Finance Survey, January 1986." 1986. Crop and Livestock Reporting Service, February. 2. David Watt (701-237-7470) 3. David Saxowsky (701-237-7466) Leholm, Arlen 8., F. Larry Leistritz, Brenda L. Ekstrom, and Hervey G. Vreodhenhil. 1985. Selected Financial and Other S. Extension Socioeconomic Characteristics of North Dakota Farm and Ranch Operations. Ag. Econ. Report No. 199. Fargo: 1. Arlen Leholm (701-237-7379) North Dakota Agricultural Experiment Station. 2. Harlan Hughes (701-237-7380) Leistritz, F. Larry, Harvey G. Vreugdenhil, Brenda L. Ekstrom, and Arlen G. Leholm. 1985. Off-Farm Income end Employment of North Dakota Farm Families.Ag. Econ. Misc. Report No. 88. Fargo: North Dakota Agricultural Experiment Station.
Pederson, Glees, David Watt, and Harvey Vreugdenhil. 1985. Term Financial Stress In North Dakota."North Dakota Research 43(41:3-6.
Saxowsky, David M., and David Watt. 1985. IIIILvlications of Liquidating Farm Operation. Ag. Econ. Misc. Report No. 87, Fargo: North Dakota Agricultural Experiment Station.
52 NoshDakota 58 Ohio Farm Financial Management Programs
by David R. Miskell and LeRoy Hushak
INTRODUCTION connection with delinquent loans. Ohio's larger commercial farmers were experiencing much more The farm financial crisis in Ohio is a major stress than the smaller part-time farmers, as concern to farmers, agricultural lenders, rural farms with debt/asset ratios above 40 percent community leaders, and many farm, civic, and range from 12 percent of farms under 100 acres to religious organizations. The news media have 59 percent of farms of 750-1,000 acres. The devoted considerable attention to the farm proportion of all Ohio farms with debt/asset crisis. ratios above 40 percent varied across different parts of the state; the eastern part of the Weather conditions in Ohio since 1980 have state, where most of the small farms are located, had an impact; severe hail and wind storms one had the lowest debt/asset ratios, whereas in the year and extremely dry hot weather during two western, and particularly southwestern, part we other years hurt a number of farmers. Relatively found the highest debt/asset ratios. low crop prices, increasing production costs, and deteriorating land values have forced a number of A similar survey done in February 1986 farmers to liquidate as of 1985. indicated that there were approximately 20,000 farms with cash farm sales of $40,000 to Ohio has many part-time farmers; over 50 $500,000. This implies there were 2,000 fewer percent of the income to Ohio farmers comes from commercial farmers one year later (Ohio Crop nonfarm sources. As a result, small part-time Reporting Service 1986). Of these 20,000 farmers may have a negative farm income, but the commercial farmers, 9 percent had debt/asset off-farm income subsidizes the farm operation and ratios exceeding 70 percent.Twenty-one percent provides for family living expenses.Farmers in had debt/asset ratios of 40 to 70 percent, and 70 Ohio and/or their spouses have the opportunity percent of the farms had debt/asset ratios of to obtain off-farm employment without having to under 40 percent.The survey also indicated that commute long distances. There are, however, approximately 5 percent of all farmers in Ohio several thousand farm families facing serious are planning to quit operating in 1986, 3 percent financial problems. This influences family of them because of financial difficulties. The relationships, including the attitudes of the study also revealed that 4 percent or children. approximately 800 farmers are delinquent on real estate loan payments and 7 percent or 1,400 Although a few agribusinesses, including farmers are delinquent on their non-real estate banks, have suffered losses due to farmers going loan payments. Based on this data, as many as 30 bankrupt, there has not been a major problem with percent of Ohio's family-sized commercial farms agriculture-related and dependent businesses. are having serious cash-flow problems and 9 percent of these have extremely severe financial Most farm organizations, and to a great problems and are moving towards insolvency. extent church groups, have expressed concern over the farm situation. These organizations and groups are at a loss for what to do. Summary
The Extension Service in Ohio has launched Situation an extensive farm financial management educational program over the past several years, A March 1985 survey revealed that among starting with workshops on coordinated financial Ohio's approximately 22,000 family-sized statements. This has been followed up with commercial farms (gross annual sales $40,000 or additional computer programs to assist farmers in above) approximately 10 percent or 2,200 farms better realizing where they stand financially were having extreme financial problems with their farm operations. On March 1, 1985 a (debt/asset ratios above 70 percent) (Lines and CES Farm Program, which included the creation of Pelly, 19851. Nineteen percent (4,700 farms) a toll-free hotline and the organization of were having serious financial difficulties "immediate response" teams, was set in motion to (debt/asset ratios of 40 to 70 percent). This assist farmers facing financial crises. The CES indicated that approximately 71 percent or 15,600 Farm Program involved the county Extension farms had no apparent serious financial problems agents, Agriculture, Home Economics, and (debt/asset ratios under 40 percent). When all Community and Natural Resource Development of Ohio's 90,000 census farms were included, 24 (CNRD), and district personnel working together percent with non-real estate debt and 16 percent with farm families who requested assistance of those with real estate loans were delinquent either through their local county Extension in their payments. Three percent or 2,700 farms office or through the hotline. The state task were involved in some type of legal action in force gave leadership to the program and in each of the five Extension districts in Ohio a district task force was organized to coordinate activities within the Extension district.
59 Ohio 53 A number of Extension educational and were organized, consisting of three county research efforts have been underway to assist Agriculture agents, one Home Economics agent, and farm families facing severe financial crises. district specialists in Farm Management, CNRD, These programs have been multi-disciplinary and and Home Economics. Five of these district teams have involved state, district, and county faculty served the state. In addition, a state task working jointly with farm families who have their force provided leadership to the overall backs to the wall. Much of the Extension program. program was directed to the CES Farm Program, which involved one-on-one consultation with farm In the first month of the program there were families. In addition, workshops were planned 398 calls for assistance, of which 286 were to utilizing the FINPACK computer program to assist the hotline. There were additional calls that farm families needing a better understanding of went directly to county agents' offices and were their financial picture and possible alternatives never reported by some of the counties. A available to them. The CES Farm Program has been computerized program was set up to record all given much acclaim and, as a result of the calls on which either the hotline or the local initial success of the program, tbt state Extension office filed a report. These have been legislature in Ohio appropriated funds primarily summarized to assist with an evaluation of the for what is known as a "credit mediation program. The toll-free hotline was publicized division" as a part of a Farm Financial through a press conference and wide distribution Management Institute. The Farm Financial of a brochure throughout the state. The Management Institute has conducted three statewide farm organisations were also used to workshops which train agricultural lenders, alert farmers to the opportunity of seeking county agents, and vocational agriculture financial help through the CES Farm Program. In teachers to assist farmers with better order to assist the immediate response team understanding their financial situation. members with their county programs, special funding was provided to these counties to assist with hiring part-time help to replace the efforts "'TENSION FINANCIAL NAMAGEININT MOMS of the county agents when they were involved with the CES Farm Program outside of the county. Major Extension projects began with inservice training of Extension agents in the Due to the success and recognition of the early 1980s. The coordinated financial statement CBS Farm Program, the state legislature in Ohio was the central focus of the initial farm passed what was known as the "State Agricultural financial management program. It was critical Bill." It included, among other things, a link that county Extension agents be able to aid deposit program whereby farmers were provided farmers in preparation of a balance sheet in credit at approximately 3 percent under the going order to assist the farmer in knowing where he interest rate. The major portion of the bill stood. Use of the coordinated financial which affected the Extension Service was the statement was somewhat discouraging; workshops establishment of a Farm Financial Management were held in many counties and attendance was Institute to provide training for agricultural poor. Nonetheless, many of the agents did work lenders, Extension agents, and vocational individually with a number of farmers as well as agriculture teachers in assisting farmers. One with small groups of farmers in an effort to provision for the Institute and the Cooperative help farmers determine their net worth. In Extension Service was to provide credit mediation October 1985, a two-day training session on the on an optional basis for either lenders or use of the FINLRB component of the FINPACR borrowers that requested the voluntary mediation. computer program was taught to approximately 70 A special training program was held to equip county Agriculture Extension agents.A two-day credit mediators for their responsibilities, follow-up session in December was held to assist since this was a new venture for Extension. agents in better understanding the FINFLO and the FINTRAN. In addition, several agents who did not The Rome Economics :gents worked closely attend the initial FINLRB training were given with a number of local agencies in providing specialized training to equip them to work with counseling on stress management. A directory of farmers on the use of the FINLRB program. As a various agencies available at the local level was result of this training, a number of counties prepared for each county and provided not only to developed what is known as the "Managing for the the immediate response teams but also to all Future" program. This involves four all-day counties throughout the state. The agents sessions incorporating goals and needs assessment working in CNRD provided assistance to in addition to the FINPACK program. County communities by helping them identify some agents, Agriculture, Home Economics, and CNRD, employment opportunities, potential impact of at ag with the district specialists, have given farm foreclosures, or other agribustnesses that leadership to this training program. may face bankruptcy.
Even with the designated group sessions, it The Ag Law Institute was established at The was determined in February 1985 that additional Ohio State University. The Institute faculty efforts to help families facing severe crises were instrumental in helping identify members of were needed. As a result, the CES Farm Program the bar who had experience or were interested In was initiated on March 1, 1985. A toll-free working with farmers who were facing legal hotline was installed at the university, and problems. Although the Extension Service was not publicity was increased to encourage farmers to in a position to recommend any lawyers, we were contact the local county Extension office for able to identify lawyers who expressed interest financial assistance. "Immediate response" teams in working with farmers on financial-legal problems. The Ohio Council of Churches and many 54 Ohio 60 other farm organizations offered their assistance The four program thrusts of Extension in trying to help identify farm families facing educational programs are: (1) Attraction of New financial crises and referring these families to Industry, (2) Starting a New Business, the Extension Service for consultation. Close (3) Retention and Expansion of Existing Firms, working relationships were maintained with the and (4) Economic Impact Analysis. Programs 1, 3, Ohio Department of Agriculture, the Farm Credit and 4 emphasize the role and activities System, and the Ohio Bankers, as these groups communities can take in encouraging economic were vitally interested in providing whatever development. The participants for these programs assistance was needed. The Farm Credit System are public officials and local economic and the Farmers Home Administration declined to development practitioners. Program 2 is focused participate in credit mediation. This did limit on individuals wishing to start new businesses. the effectiveness of the credit mediation.The primary success of the program was the ability of our Extension agents to sit down and work with Attraction of Now Industry the farm family to help identify options which they had regarding their delinquent payments. This program, started in 1976, has reached the largest number of Ohio citizens In early 1986 the CES Farm Program brochure (approximately 883). Since nearly all of these was revised and widely distributed along with programs focus on community leaders, the number posters to alert farmers to the opportunity of of citizens influenced by these educational requesting assistance through the CES Farm programs is actually much larger than the direct Program. With nearly every county Agriculture participants. A large number of additional Extension agent now trained to be more effective people have received publications and information in farm financial management, fewer referrals are with less depth than these major projects. being made to the immediate response team.The local Extension agents are more active is working Two major educational events are used in with farmers within the county. Confidentiality this program: (1) Community Economic Development is maintained. At the farmer's request, he may Correspondence Course and Seminar, and (2) Ohio work directly with an immediate response team Basic Economic Development Course.These courses member rather than the local agent.Most of the focus on a wide range of topics necessary for help provided through the CES Farm Program is local practitioners to develop a strong program done one-on-one at the time and place suggested for attracting new industry. The first course by the farmer. Very little counseling is has a ten-week correspondence course followed by attempted by telephone. a two-day workshop. The second course is a five- day workshop accredited by the American Economic Development Council. These two workshops are COMMUNITY ECONOMICS EXTENSION PROGRAMS' sponsored by the Ohio Cooperative Extension Service in cooperation with the Chamber of Another means of assisting farmers in crises Commerce Executives of Ohio, Ohio Banker's is through improved nonfarm employment Association, Ohio Chamber of Commerce, Ohio opportunities in rural communities.CNRD Development Association, Ohio Economic Extension programs in Agricultural Economics and Development, Ohio Planning Conference, Department Rural Sociology (AERS) have focused on a broad of Development, and Ohio Development Financing range of public policies at the state, Commission. A number of regional programs have multi-county region, county, or community level. also been conducted on how to attract new Since the goal has been to provide educational industry. programs that assist rural people and communities, the emphasis has frequently been on programs and policies for nonagricultural Starting a New Business industries. The economic well-being of many rural Ohio communities and the vast majority of This topic lots been very popular during the many Ohio farm families requires a rapid last two years. Suggestions for encouraging expansion of the analysis and extension of entrepreneurship are given in Extension Bulletin community economic development issues, and 677 (Crawford, n.d.). Additional educational especially of programa and policies related to materials are supplied by the Small Business nonagricultural industries. Administration and local businesspersons and professionals. A series of local workshops have There is relatively little attention given been held starting home businesses.The fact to the 26,000 agricultural firms outside farming. sheet series "Starting a Business in Your Home" The potential contribution of AERS (and potential (Passewitz et al.) was developed. clientele and political support) for expanded programs in agribusiness management appears very large relative to the current audiences. Retention sad Expansion of Existing Industry
An educational program for the retention and expansion of existing industry was initiated in 'This section draws heavilyon material 1982. This local community program is aimed at provided by George W. Morse. improving the efficiency and profitability of existing industry. Through improved profits, the probability of growth and survival is enhanced.
61 Ohio 55 A series of newsletters, a slide set, and Second, econometric models of linkages two bulletins have been used to deliver the between employment in county industrial sectors program. Although this program is in its early and local tax and expenditure policies, county stages, approximately 1,500 persons have received demographic characteristics, and county location information on the R and E program. Fifteen characteristics were estimated for the East North communities have started new ongoing development Central region of the United States (Aki et al. programs as a result of our educational work. 1984). Finally, assessment of the effectiveness of local retention and expansion programs is ongoing in Ohio and in several other states (New konanic Impact Analysis Jersey and Wisconsin). Morse (1985) found that business visitation programs generated positive Two economic impact models have been net payroll benefits over a sample of 20 developed for use in Ohio communities. These programs. are: (1) The Ohio Job Impact Model (OJIM), and (2) Ohio County Input-Output Models (I-10). The OJIM model helps communities estimate the benefits and costs of using economic development RWERENCES incentives. This model has been used in six local case studies. Input-Output models have Aki, Charles F., Leroy J. Hushak, and George Y. Norse. 1984. been used in three local case studies. These "Employment Growth Impact of Local Fiscal Policies In case studies, using these two models, are no Non.Netro Counties of East North Central States." ESS -609. longer being conducted through Extension because Department of Agricultural Economics and Rural Sociology, of their heavy resource requirements. Research The Ohio State University, Columbus. projects using the input-output model will continue for state policy issues and agricultural Crawford, Sam. N.A. "Economic Development Through policy questions or for local issues when funding Retention, Expansion, and Creation of Local Firm." Extension Bulletin 677.The Ohio State University, is available for the research project. Columbus.
Henderson, Dennis and Stuart D, Frank. 1986. Term Ifficiesty is Delivery Transition Under Financial Stress.. -An Ohio Case Study." Department of Agricultural Economics and Rural Sociology, Several steps have been taken to improve the The Ohio Stets University, Columbus. efficiency of information delivery. First, the Hushak, Leroy J., Young Key Ro, and Zafar Y. Husain. 1983. newsletter Economic Development Notes is being "An Input-Output Analysis of Regional Economic used to help create awareness of the program as Development." Research Bulletin 1155.Ohio Agricultural well as to deliver specific educational items. Research and Development Center, The Ohio State While we mail only 500 copies per month, this University, Columbus. newletter reaches nearly another 9,500 persons each month in the magazine Ohio Cities and Lines, Allan E. and Robert Polly. 1985. "1985 Ohio Farm Villages. Finance Survey Results." ESO 1214.Department of Agricultural Economics and Rural Sociology, The Ohio State University, Columbus. Second, the slide set "Retention and Expansion: Vanguard of Economic Development" is Norse, George W. 1985. "The Benefits and Costs of Retention being used to provide information to community and Expansion Visitation Programa." Paper presented at the groups that are interested in retention and Conference on Community Economic Development Through the expansion topics. Groups that wish to have an Retention and Expansion of Existing Businesses, ColumbuS, opportunity for interchange are encouraged to use Ohio. Department of Agricultural Economics and Rural Sociology, The Ohio State University, Columbus. the telelecture units after showing the slide set. While every group and county agent would Ohio Crop Reporting Service. 1986. "1985 Ohio Feem Finance prefer to have state specialists or district Survey Results." Report, February 24. specialists attend the meeting in person, this is not possible. Passewitz, Greg, Barbara Drake, William Owen, and E. T. Shaudys, Various dates. "Starting a Business in Your Home." Fact Sheet Series.
EC01110/11C DIRLOPMUT 11181ARCH Ro, Young Kay, D. Lynn Forster, Leroy J. Hushak, and George W. Morse. 1985. "Environmental Regulation and Regional The Ohio State University faculty in AERS Economic Growth: An Input-Output Analysis of the Ohio Coal participated in several research efforts to Mining Region." Research Bulletin 1170. Ohio Agricultural facilitate nonfarm employment growth in rural Research and Development Center, The Ohio State areas. First, regional input-output models have University, Columbus. been used to examine the economic linkages among the industrial sectors of regional economies. Several models of substate regions have been developed and used to estimate employment impacts (e.g., Hushak it al., 1983 and Ro et al., 1985). A current effort involves estimation of the economic impact of changes in agricultural sectors in a multi-state input-output model.
62 56 Ohio Responses to Farm Crisis by South Dakota Institutions
by Ardelle Lundeen
INTRODUCTION of producers varied among regions in the state during 1985 (Schmiesing, 1986). Overview of Crisis Situation is South Dakota Another indicator of the farm crisis is the Headlines in South Dakota daily newspapers increase in farm bankruptcies from 37 in 1981 to speak of farm auctions and foreclosures, the 193 in the first seven months of 1985. A demise of small rural banks, and the ills of the continuation of the current rate for all of 1985 Farm Credit System. Dan Rather brought CBS would mean an 800 percent increase from 1981 to Evening News to South Dakota for three days to 1985. give national coverage to the farm crisis. All of this is appropriate since agriculture is the largest single industry in the state. Overview of Research sad Ritteasioa Activities
While no general survey of farm producers Most of the research on the farm crisis is has been undertaken by researchers at South linked to ongoing long-term research projects Dakota State University (SDSU), information funded by the Agricultural Experiment Station. gleaned from studies of credit conditions, Information relevant to the farm crisis has farmland market trends, and farm bankruptcies emerged from these projects and is being utilized indicates that the proportion of South Dakota by Extension and other personnel responding to farmers experiencing problems is similar to that farmers' needs. found in most Midwest *times. Scientists in plant and animal research feel For example, in some recent years farm that ongoing research to improve productivity and production expenses exceeded cash receipts from lower costs is more important than ever in this firm marketings (USDA 1985). Farmland values time of financial crisis. hive declined 34 percent from the 1981-82 peak. Wile the percentage decline may not be as great Some short-term research in the Economics as that observed in some states, farmland prices Department has been undertaken in specific had not inflated to the extent they had in those response to the farm crisis. The results of the states. In real terms, farmland prices in surveys indicated areas where additional mid-1984 had fallen to 1975 levels (Swinson and education is needed. The extent of the research Janssen, 1985). undertaken is dependent on the availability of funds from outside sources, however. Declining farmland values contribute to the current financial stress. Buyers who purchased The major thrust of Extension programs has land during 'ae late 19700 have had much--in some been in the area of farm financial management, cases all--of their equity erased. They still with some work in family stress, rural must meet financing obligations which have development, and family finances. remained the same. Without taking on any new debt, producers have seen their debt/asset ratio The South Dakota State Department of increase. Agriculture has instituted two state-wide programs which are utilizing Extension personnel Another less-discussed, but equally and skills. A hotline has been activated, which worrisome result of declining farmland values, is producers can call for counseling help. the reduction in wealth for older landowners who Individual counselors with farm management or ag relied on their equity in land to provide for lending experience have been trained, in part, by their retirement years. Extension specialists to meet with producers on a one-to-one basis to confidentially review the An increase in the quantity of land put on producer's situation. The counselors will the market may further decrease land prices if provide information, support, and assistance in most producers are not in a strong enough working with lenders. financial position to expand their holdings.The result may be more nonfarm investment in The second major program has been titled farmland. "Rural Renaissance" and is an attempt to draw together sources of assistance for those who need Results of two farm lender surveys completed help to remain in farming and for those who will during November of 1984 and 1985 indicated that be forced out and need assistance in making a 24 and 25 percent, respectively, of farm transition to a new career. Assistance is borrowers were in the weak or inferior risk provided by ongoing agencies such as vocational categories in each of those years. The position schools, employment services, mental health facilities, lawyers, and Extension personnel. The main contact points are the county Extension offices.
63 South Dakota 57 Ileeded isseardi and Extessios varieties, pesticides, irrigation, etc. AGNET also offers help through a diversity of More specific information is needed on the programs. financial condition of farmers, including dataon debt/asset ratios, inability to secure financing Marketing education is being carried out, for spring planting, farm foreclosures,etc. although a recent survey by SDSU economists Very little work appears to have been done in indicated that the predominant marketing researching family relations (e.g., divorce, technique used by South Dakota producers is that abuse, depression). The effects on rural of cash marketing. "Beefed-up" programs to communities, both financial and social,are also educate producers about marketing alternatives areas of needed research. and analysis of marketing alternatives are being designed. Implementation is contingent upon Of particular need in Extension are funding. personnel to work with family stress and rural development. An Extension Family Life specialist Extension Home Economics specialists position remains unfilled and the Extension work developed and piloted a program on "Your Home in rural development is being phased out. Business," which an Economics specialist later joined. The program was designed to aid in Surveys have also indicated an urgent need evaluating the economic feasibility and for marketing education by producers within the management aspects of starting home-based state This is an area where research and businesses, which farm and small-town families Extension activities are being carefully may be considering to supplement their farm coordinated and targeted. Initiatives are being incomes. Multi-county workshops covering the taken to expand SDSU's work in this area. entire state were conducted. Newsletters and handouts were prepared and distributed (Dobbs The role of farm women remains undocumented 1985). and unresearched. To develop complete programs, work is needed in this area. Economic development activities consisted of multi-county meetings, indepth workshops, and individual consultations. Many of the workshops EXTENSION PROJECTS were tied to the farm crisis concerns and possible impacts on small South Dakota farms and One of the major programs instituted by were titled "Small Town Economic Development Extension in 1985 was the FINPACK program, also Options."Participants included business called the "Planning for Tomorrow--Today" persons, loan officers, farm and other community program. Workshops have been held in eight leaders, and concerned citizens. counties with about 50 couples participating. Workshops are scheduled in four more counties. Economics znd Family Life specialists Producers are encouraged to assess goals and cooperated on programs on family stress. With a priorities of the farm business, develop a current vacancy in the Family Life specialist goal-oriented management plan, analyze their position, activity in the area has ceased. financial position, and develop alternative operating plans for the future. The major thrust of Extension programs has been in farm management and related areas where Several programs initiated in prior years the emphasis has been on families. Limited work are continuing. One such program deals with farm has been conducted on community impacts. management, inc..ding farm business structure and organization. Programs include dealing with land and livestock lease and share arrangements to RESEARCH PROJECTS lessen capital outlay and risk positions of agricultural producers, as well as alternative No large integrated research programs on the machinery financing and acquisition offers. farm crisis currently exist at SDSU but a number Additional specialist positions are being added of specific research projects are responding to in the farm management area. the needs of the crisis. Much of the specific research is occurring in the Economics and Rural Management "TIPS" meetings were co'ponsored Sociology Departments. It is felt, however, that by the SDSU Cooperative Extension Service and ongoing research in some of the other College of agricultural lenders in 1984 and 1985. Extension Agriculture and Biological Science Departments specialists from marketing, finance, animal (e.g., Plant and Animal Science) may help science, and agronomy addressed producer producers become more efficient. I will outline clientele in day-long meetings to emphasize the some of the research efforts carried out at importance of management in all phases of SDSU. agricultural production. The meetings were designed to stress what better management could mean in terms of "bottom- line" profits. Another Economic Research title for these meetings was "Row to Save $15,000." Within the past few years, the Economics Department has initiated projects in the area of Extension specialists in technical finance, land prices, and bankruptcy. disciplines are conducting "how to" meetings dealing with specific topics such as seed Agricultural Lender Surveys
An initial survey in November 1984 and a 58 South Dakota follow-up survey a year later were sent to commercial banks, Production Credit Associations, Farmland Market Trends Federal Land Banks, and Farmers Rome anmintstration county offices. The survey was Research on farmland market trends in South designed to document credit evaluation Dakota has been carried out on a statewide and procedures, financial warning signals, and regional basis. Results of the survey showed management information needs of borrowers so that that farmland prices have declined for the past SDSU could tailor its programs to meet these three years, with the average price per acre of needs most effectively. land sold from January to June 1985 being 34 percent less than the price during the peak of Results of the 1984 survey showed that 24 1981-1982 (Janssen 1985). Regions of the state percent of farmer and rancher borrowers were fared differently, with the largest decrease classified as being in a weak financial position occurring in the southeastern part of the state. and lenders believed that total debt had Reasons for and implications of declining increased for almost half of their farm customers farmland prices were also analyzed. in that year (Schmiesing, 1985). A second ongoing project to analyze farm real estate developments in South Dakota has Lenders indicated that financial planning relevance for the farm crisis. The objectives of and marketing were skills most in need of the research are to analyze (1) annual estimates improvement. Specific skills needing improvement o! per acre agricultural land sale prices, (2) included projecting cash-flow needs, enterprise changes in farmland financing terms and profit and loss analysis, understanding financial conditions, and (3) impact of factors explaining statewents, record keeping for decision-making, market price of farmland. Relationships between and marketing strategies.The approaches favored farmland financing terms, real estate market by lenders were workshops, management clubs, and prices, and debt repayment ability will also be one-to-one counseling. examined. Insights provided by the research will be useful to farm lenders, individual producers, Lenders stated that, of married borrowers, and farm management Extension personnel. almost 60 percent of the wives kept the records. Indications also were that more than half of the A project on land rentals is currently being records were inadequrte for financial planning. initiated. These findings would suggest that a coordinated effort should be made to reach and/or include Farm Bankruptcy Proposal farm wives in financial and management training. Of direct relevance to the farm crisis is a About 99 percent of the lenders agreed that research proposal to provide management farmers must be able to show that they have information on farm bankruptcies through analysis developed a farm financial management plan to of farm bankruptcy filings in South Dakota since repay debt if they wish to receive credit in the 1983. Specifically, the objectives are (1) to future. determine the financial and other characteristics of farmers filing Chapters 7, 11, and 13 The latest survey, undertaken in November bankruptcy; (2) to examine the differences 1985, showed that the financial condition of many between approved and unapproved reorganization South Dakota farmers and ranchers had plans under Chapter 11; (3) to determine the time deteriorated in the past year. Only slightly required from filing the reorganization plan more borrowers were classified as in a weak approval, conversion, or dismissal under Chapter financial condition than in the previous survey, 11; (4) to examine characteristics of secured and but the percentage in the "superior" or "good" unsecured creditors under Chapter 11 filings; and categories had declined by about 5 percent. (5) to examine legal fees charged for Chapter 11 About 7 percent of the farmers have liquidated bankruptcy filings. their debt in the past year (Schmiesing, 1986). Research results will be made available to The 1985 survey also showed that producers farm lenders and individual producers. west of the Missouri River were in considerably Researchers are awaiting word on funding at this worse financial condition than "East River" time. producers. "West River" has primarily livestock production and had been severely buffeted by drought and an early winter. Rural Sociology Research
Lenders indicated they would not make either A dissertation, which examined the role mat operating or real estate loans to "weak" the church during the farm crisis, has been borrowers, and some would not make loans to new completed in the Rural Sociology Department. The customers in any category. researcher focused on farm families and the extent to which churches mediated in order to The results of the two surveys have been relieve pressure and stress on the families. used to design and implement agricultural Peripherally, the role of neighbors and Extension marketing management workshops and seminars. personnel were also examined.
65 South Dakota 59 Reteesioe-Related Research REFENEICE1
As part of Extension-related research, analysis of farmers' responses in ?MAK Dobbs, T. 1965. Economies of Home-Based Businesses. workshops will be undertaken shortly. Strategies Economics Dept. Newsietter 5223. South Dakota State University, Brookings, June 5. undertaken or contemplated by participant farmers
in those meetings will be used in counseling Janssen, L. 1965. Reasons for and Isvilestions of Declining other farmers. Farmland Fticee. Economies Dept. Newsletter 5239. South $ # Dakota State University, Brookings, November 12. SY SUISIART Schmiesing, B. 1965. Debt Capital: A Ler Risk then Everyon. goy Realize. memos es . meTTer South Dakota State University. Brookings, Noy 27. While SDSU has developed no large
comprehensive programs to meet the farm crisis, Schmiesing. B. 1586. Financial Conditions of and much is being done through many specific ongoing Availability of Credit to South Dakota Producers. programs. Farm management is an area of special Economics Dept. Newsletter 0231. South Dakota State focus but attention is also being given to University, Brookings, January 30, families and to economic development for small towns. Additional information can be obtained Swinson, C. end L. Janssen. 1965. LonTerm end Recent Farm lend Market Developments in South from Extension Economics specialists at the elkote. tconomics Dept. Newsletter OZTO. South Dakota State University, Economics Department at SDSU. Brookings, March
USDA. 1985. Economic Indicators of the Form Sector: State income end Balance Sheet Statistics, 1963. Washington, DC: USDA NI-AVERS. ECIFS 3-4, January.
60 South Dakota 66 Farm Crisis Response: University of WisconsinMadison Extension and Research
by Jess Gilbert and Glenn S. Thompson
INTRODOCTION Researchers in the CALS have a number of projects related to the current farm crisis. The The current farm crisis in Wisconsin stems Department of Agricultural Economics recently directly from economic problems but has broad released a report on the financial condition of implications for individuals, families, Wisconsin farms; it estimates that between 2,000 communities, and the larger society. In 1981 the and 7,000 farmers will liquidate for financial average farm debt-to-asset ratio for the state reasons in 1986. That department contributed was 19 percent; by 1984 it had increased to 34 significantly to the recent Governor's Commission percent; and in January 1986 remained at 33 on Agriculture. UW agricultural economists are percent. Of the farms with debt, over one-fourth also studying the effects of the crisis on family have a debt/asset ratio of 40 percent or more, farmers and local communities. In addition, with seven percent of those having a ratio other departments in CALS (e.g., Agricultural greater than 69 percent. Younger farmers and Journalism, Landscape Architecture, Continuing dairy farmers tend to have higher ratios. Over and Adult Education) are investigating dairy four percent of Wisconsin farmers expect to quit farmers' policy preferences and comparative farming in 1986, with ten percent more expecting approaches to traditional dairy areas. Finally, to quit in 1987. The state lost an estimated the Department of Rural Sociology has several 3,000 farms between 1984 and 1985. (The above research projects relevant to the farm crisis: data are from the Wisconsin Agriculture Reporting an historical analysis of the trade-offs between Service, "Agricultural Finance Survey," May 1984 debt and tenancy in Wisconsin agriculture, a and February 1986.) study of the contradiction between publicly-supported research that enhances The problems caused by the current crisis, productivity and federal price and income however, are not adequately captured by programs, and an examination of changes in statistics. Farm foreclosures and bankruptcies farmland ownership and control. While CALS has are on the rise. Individual and family stress begun to respond to the farm crisis with all of has increased dramatically. Rural businesses are these research projects, it needs to encourage being hurt. Communities feel the strain. The further research efforts that address long-term current structure of agriculture may well be structural issues as well as Immediate policy significantly changed by the present crisis. The concerns of the people of Wisconsin. University of Wisconsin (UW) at Madison is responding to the crisis on a number of fronts. This report summarizes the efforts of the EXTENSION University's Cooperative Extension Service (CES) and the College of Agricultural and Life Sciences In the late fall of 1984, Extension's CES (CALS). program leaders, concerned with the deepening farm crisis, discussed ways CES could help Strategies on Survival (SOS) is a special affected Wisconsin citizens. The concern was CES educational program for Wisconsin farm generated by county Extension agents and families and agribusinesses facing financial statewide specialists who were receiving calls distress. This major program thrust is designed from farmers and ag lenders concerned about to provide a comprehensive educational campaign farmers who weren't servicing their debts. Farm that ties together the efforts of the four CES suppliers called, nervous about overdue accounts. program areas--Agriculture/Agribusiness, It wasn't just the chronic nonpayer; they said Community Natural Resource and Economic reliable paying customers weren't paying. Development, 4-R Youth Development, and Family Disturbing reports also came from the clergy. Living Education. The program focuses on three Some families weren't coming to church; they key groups: farm families, agribusiness, and didn't want to show their faces in public. An farm lenders. SOS teams, consisting of Extension estimated 6,000 farmers in the state were facing agents and specialists and farm and family critical financial difficulty. Bankruptcy rates financial analysts, help individuals, families, were increasing. agribusiness, and community groups through short-term and indepth counseling. Assistance is CES realized that individual farmers could provided on a variety of problems, including farm not do much about some of the main causes of and family finances, managing family stress, farm their financial problems. There was little a profitability alternatives, referrals to other farmer could do on his own about the high agencies, and evaluating possibilities for interest rates which drive up operating costs, or off-farm income. about low commodity prices, or about the strong dollar that makes U.S. farm products too expensive for foreign buyers. At the same time, CES realized that farmers and agribusinesses can get involved in collective action through organizations and the political process to deal with these broader issues. 67 Wisconsin 61 CIS staff also realised Cisme were steps the and counseling skills. Special training individual farmers could take to ease their materials (SOS Handbook I) and 3,000 financial stress. Part of the solution lay in "Survival Kits" for use with farm families ideas CES Agriculture/Agribusiness staff had been in one-on-one counseling were distributed to teaching all along--farm management and agents. production ideas which could help farmers cut ;Bete, increase efficiency, and improve profits. A statewide communication group was est as important was family stress and budget organized under the leadership of the CES information available from CES Family Living and Agriculture/Agribusiness program area. The 4-H Youth Development staff. Much could be done group was composed of representatives from to ease the burden on agribusiness through the CES; Farm Credit System; Wisconsin University Center for Cooperatives and the CES Department of Agriculture; Trade and Seel Business Development Center. Consumer Protection; Wisconsin Bankers Association; Wisconsin Board of Vocational, With this realisation, CES, with its county Technical and Adult Education; Wisconsin and state faculty from four statewide program Department of Health and Social Services; areas (Agriculture/Agribusiness, Community and the Department of Industry, Labor and Natural Resource and Economic Development, 4 -H Human Relations. The goal was to develop Youth Development, and Family Living Education), communication linkages, share programs, and undertook an ambitious educational program develop a systematic referral procedure. initiative entitled Strategies on Survival (SOS). The idea of the SOS program was to Farm or family financial analysts were hired provide a comprehensive educational campaign that in 15 clusters on an ad hoc basis to assist would coordinate the efforts of the four agents in working with farm families. statewide program areas and help agents reach Analysts' past experiences included work farm families, including those who hadn't taken with Extension and leading institutions and advantage of CES rrogramm in the past. as vocational/technical instructors and farm management consultants. The SOS program focuses on three key groups: (1) Farm Families receive intensive one-on-one Microcomputers were placed in the cluster counseling and small group instruction. These offices for use in counseling farm families. programs focus on farms and family financial FINPAK training was provided at May, analysis and planning, managing debt, farm September, and December workshops for profitability, resolving conflicts and reducing county-based faculty. stress, identifying sources of alternative income, and related topics; (2) Aaribusinevsfs, a As part of a cooperative effort to develop a large sector of Wisconsin's rural economy which five-state agency resource directory, CES depends heavily on agriculture, are provided prepared lists of contacts in each county counseling and workshops on planning, marketing, Extension office which provided help in six cash flow, inventory, and related areas of areas: farm financial management and farm business management; and (3) Agricultural Lenders profitability, family financial management, receive programs focusing on farm business family stress and family support networks, analysis, repayment capacity, farm production and youth-related concerns, community economic marketing, family financial management, and development, and alternative small business related legal issues. opportunities. A farm crisis info-line (telephone) was also established in Prior to the initiation of SOS, faculty were cooperation with the Wisconsin Department of devoting 25 percent of their planned time to Agriculture Trade and Consumer Protection. economic improvement program efforts that fit the The Department and CES are presently -loving objectives of SOS.When staff developed their to employ legal counsel for the info-line 1985-86 program plans, 44 percent of their total operation. Attorneys are presently planned time was devoted to SOS-type programing. volunteering legal counsel to farmers CES county-based faculty have been mobilized in needing services. team clusters encompassing two or three counties to offer a comprehensive range of educational Many educational materials have been services to farm families in need. Having staff developed or obtained for use in individual from several counties working together has and group counseling sessions and workshops several advantages. The can share expertise, with farm families.They include eleven make more effective use of scarce resources such con.uter software programs, a aeries of as microcomputers, and plan and implement videotapes on farm profitability and larger-scale programs. marketing, special counseling materials, six booklets related to increasing profits from A number of actions have been initiated to specific farm enterprises, and a guide for implement the SOS program: organizing small group family education and support and action groups. In March and November 1985, three-day orientation/training workshops for 104 A project proposal was submitted to county and 50 campus-based Extension faculty Extension Service-USDA, CES was awarded a focused on the background of the farm $55,000 grant to work with 10 pilot crisis, scope of planned SOS activities, and counties, and CES reallocated $185,000 of intensified training in farm business and its existing budget for SOS programming. family financial management, family stress,
62 Wiscoasin An administrative/program leader team was restrictions on tax-loss farming); (3) state organised to coordinate ongoing SOS rural development policies (e.g., creation of a activities and to provide counsel to a larLe state rural development council to coordinate CES steering committee. such efforts); and (4) federal policy decisions (e.g., targeting benefits to family farms, not In cooperation with the staff of Health and disadvantaging Wisconsin dairy farms under the Human Services Outreach (UW-Madison), CES federal milk marketing system). released the Neighbor- to-Neighbor program,a do-it-yourself guide for organizing Farm The 198,2 Wisconsin Family Farm Survey Family Education/Support Action GroupP. (n 529) covered eight counties that are similar to 300 other U.S. counties regarding A special quarterly reporting system is concentration in dairying, small-to-medium-sized underway to document a profile of SOS farms, and family provision of labor and counseling contacts, group teaching management. Directed by Priscilla Salant contacts, and organizational contacts. (Economic Research Service, USDA) and William E. Saupe (Agricultural Economics, UW-Madison), the survey is relevant to the -urrent farm crisis in RESEARCH several ways. Salant and Saupe constructed a "viability ratio" to evaluate farm household Researchers at the University of Wisconsin financial well-being. It consists of total net have conducted a number of research projects that family income from the farm plus all nonfarm deal with the current farm crisis. These income divided by the sum of three types of projects are summarized below. All share the financial obligations (consumption, principal common theme of policy relevance even as they payments on farm loans, and capital replacement range widely in terms of approaches to and costs). Farm households with a ratio of less perspectives on the crisis. than 1.0 will be unable to meet financial obligations in the long run. *,aced on this In February 1986 the Department of measure, one-third of the entire sample were Agricultural Economics and CES publisheda nonviable; 47 percent of the dairy farms were special report, Financial Status of Wisconsin nonviable. These estimates are based on data for Farming, 1986, edited by Edward V. Jesse. It 1982, when the current criaLs was just beginning. offers economic analyses of the roots of the Salant and Saupe have used a simulation technique current problem (massive decapitalization caused to predict how many of the survey farms would be by changes in macroeconomic policies)as well as both nonviable and technically insolvent in 1986; its magnitude: an estimated 2.S to 10 percent their estimate was over 11 percent of the farms. (2,000 to 7,000) of Wisconsin farmers :All Further, Salanr and Saupe have analyzed the liquidate for financia7 reasons in 1986. survey data on five different types of farms: Moreover, simulation analysis reveals the types (1) those that expect to stop farming by 1988, of dairy farms most likely to survive. Not (2) dairy farms, (3) nondairy, part-time farms, surprisingly, a high debt-to-asset ratioseams to (4) nondairy, full-time farms with sales less b, the best predictor of failure. Finally, the than $20,000, and (5) nondairy, full-time farms report analyzes the consequences of various with sales of $20,000 or more. For each type, possible solutions, including "doing nothing," they discuss public and private options. tax and credit policies, transition programa out of farming, and federal farm program options Another agricultural economist, Mary ("free market" vs. production controls).Trade- McCarthy, is studying the implications and offs between these alternative policiesare incidence of the current farm financial crisis mentioned, with no particular policy option being on local economies in Wisconsin. The primary aim endorsed. of this research is to examine the economic repercussions of changes in the farm sector on The twenty-two member Governor's Commission local rural and urban Wisconsin communities. on Agriculture, which issued its final report in This involves an analysis of county data on June 1985, was co-chaired by the Dean of employment, income, and sales tax revenues, and Agriculture at UW-River Falls and included the 1982 Census of Agriculture data on firm-type Dean of UW-CES and a member of the Department of income and ei..ployment. A secondary aim is to Rural Sociology, UW-Madison. Richard Barrows, of focus on the employment prospects of displaced the UW-Madison's Department of Agricultural farmers and their families in rural communities. Economics, served as Executive Director of the This is to be facilitated by conducting a sample Governor's Commission. Eight other Agricultural survey of displaced fern families in Economics professors and one Rural Sociology farm-dependent communities. professor, worked as technical advisors to the commission. The final report, strongly In late Septer' r Ind early October 1985, supportive of a family farm system of Mike Read (a gradtt cudent in the Department agriculture, included recommendations in four of Continuing and Adult Education), along with general areas: (1) state agricultural policies Hernando Gonzalez and Len Maurer (both (e.g., provision of operating credit, creation of Agricultural Journalism professors), conducted a an agricultural council, establishment of a random sampre survey (a 557) of Wisconsin dairy direct marketing program); (2) state taxation farmers. The aim was to obtain their opinions policies (e.g., reform of the propertytax concerning two divergent approaches to federal system, farmland preservation tax credits, dairy legislation: free market vs. supply
69 Wisconsin 63 management. Funded by the College of Ageculture Indeed, both the United States and Wisconsin have and Life Sciences, the Cooperative Extension experienced a modest increase in tenancy(1-3 Service, agribusiness firms and farm magazines, percent) along with a more rapid growth of the study went from initial conceptualization to part-owner operatorship (2-10 percent) since final report in one month. The findings 1974. This recent rise in farm rentals has indicated that 64 percent of Wisconsin dairy disproportionately affected younger farmers, who farmers favored supply management, 25 percent are more likely to be landless operators. Mooney preferred a free market approach, and 10 percent examines both short-term options to the curr%nt had no preference. In addition, 50 percent farm crisis (higher price support, off-farm work) supported mandatory production quotas on U.S. and long-term proposals. For instance, the fact dairy farmers, 22 percent "may be" in favor, and that farmland is a commodity may be seen as a 28 percent opposed such controls.Read is fundamental problem in the debt-tenancy cycle. currently continuing his research in the College One alternative to the current situation, then, pf Agriculture and Life Sciences. would be to view land as a unique means of production that should not be an object of Herman Felstehausen (Natural Resources and financial speculation. This policy option would Landscape Architecture, UW-Madison) has work entail restrictions on the land market such as gpderway that emphasizes comparative approaches exist in Western Europe. tp the rural adjustment and structural crises in the state. For example, the success in Jack Rloppenburg (Department of Rural sustaining owner-operated dairy farms in Clark Sociology, UW-Madison) is examining the ways in County, Wisconsin, is being compared with a which scientific research contributes to matched county in New York State. Delaware agricultural transformation. It appears that tne County, New York, was ve:y similar to Clark public agricultural research system has tended to County, Wisconsin, in 1940. Since then, both act in a contradictory fashion with certain other counties show large losses in dairy farms, with components of state intervention in agriculture. Delaware County representing the advanced case. There is a fundamental contradiction in the Most milk handling and processing plants have relation between research-driven productivity closed; some rural communities have become advances and expenditures on price and income vacation and recreation centers. The key support programs. There is embedded in thin question is, will Clark County follow the same relation a permanent tendency to fiscal cr.,is. course or can an alternative dairy-based program The state cannot indefinitely increase its be worked out in Wisconsin before the majority of investment in research designed to provide new the owner-operated units fail? A second area of output-enhancing inputs if it must also Felstehausen's comparative work addresses the underwrite the valorization of the increased environmental and structural consequences of output that those inputs produce. Kloppenburg is center pivot irrigation. Antelope County, investigating ways in which agricultural research Nebraska, is being studied as a "typical" center might be redirected from its current pivot irrigation county in that state. Antelope "output-enhancing" orientation to an County is located away from the Platt River thus "input-minimizing" emphasis. Such a redirection making it more diverse in agriculture and would slow the rate at which the "technological irrigation than valley farms. Irrigation impacts treadmill" is turning. While it is important to in Portage County, Wisconsin, will be compared address the immediate problems facing farmers in with the Nebraska experience. r' curent crisis, it is also important to unuerstand the structural roots of the problem. Pat Mooney, in work based on his dissertation in Rural Sociology at UW-Madison Jess Gilbert (Department of Rural Sociology, (1985), has developed an historical political- UW-Madison) is presently investigating farmland economic analysis of debt-and-tenancy cycles on tenure changes in Wisconsin. This project is an Wisconsin farms. The 1930s presented U.S. update of two township-level studies of tenure agriculture as a whole with a "tenancy crisis." processes done in the 1940s. The objectives are At that time, 42 percent of U.S. and 23 percent to describe the changes that have occurred since of Wisconsin farmers were full tenants, i.e., World War II, to examine the separation of land they owned none of the land they operated. Both ownership and control, and to discover the nationally and at the state level tenancy reasons that people own farmland. This research declined steadily after 1940 to the low-point in is relevant to the farm crisis in that it will 1974 (to 11 percent in the United States and 6 focus as well on ownership changes in the 1980s, percent in Wisconsin). While the radical on managerial decision-making concerning the decrease of tenancy had a number of causes, it laid, and on individuals' subjective meanings was accomplished in significant part by an attached to land ownership. increase in credit provided by the federal government (e.g., EWA, FLB). The problem of tenancy, then, was "solved" by growing debt ZITENSION IMMO minium loads. At the same time, the decline in tenants was not accompanied by an increase in full-owner SOS Handbook I (Agent Workshop I) operators but rather by a rise of part-owner operators (who own some and rent some of the land Macroeconomics they operate).Mooney's historical analytic Farm Financial Management raises the question of whether the current "debt Stress Management crisis" may be "solved" by a rebirth of tenancy. Helping Skills
64 Wisconsin 70 Community Helping Resources/Support Loan Calculator Organization Partial Budget Case Studies Badger Balance Total Mixed Ration SOS Handbook II (Agent Workshop II) Community Economic Analysis Food SS Equity Financing for Agriculture Decision-Maker Less* vs. Purchase Steps into Spending Machine, System and Crop Production Additional computer software available Cost via mainframe--WISPLAN Computer Managing the Farmr-L-'ty Feeding Service, 302 Hiram Smith Hall, 1545 Strategies--Feed Cost Observatory Drive, Madison, Wf 53706 Farm Enterprise Budgets FINLRB Counseling and Support Group Materials Managing the Financial Future of Your Dairy Farm Neighbor-to-Neighbor Case Study Materials Counseling Issues and Strategies Self Assessment Counseling Process Analysis Cost of Food Life Insurance Learning Series Farmers Resource Guide--A County/Community- Family Living Expense Planning Based Information and Assistance Guide Bankruptcy, Foreclosures Creative Financing Agriculture Finance Survey--February 1986 Moving out of Agriculture Curriculum- -Small Groups Contacts for Resource Materials:
SOS Survival KitDesigned to Help Agents Robert E. Rieck Counsel Associate Dean Cooperative Extension Service Family Records 615 Extension Building Cash Flow Planning Guide 432 N. Lake Street Managing Farm Financial Future Madison, WI 53706 Building Emotionally Healthy Families (608) 262-7965 Family Living Expenses Capital Debt Repayment Capacity Financial and Production Performance, Glenn S. Thompson Guide--Dairy Farm Asst. State Program Leader Agriculture/Agribusiness, CES Enterprise Booklet--Designed to Help Farmers 637 Extension Building Increase Farm Profitability 432 N. Lake Street Madison, WI 53706 Dairy (608) 262-7321 Forage Crops Sheep Beef RESEARCH usovacz masons Swine Grain Crops Richard L. Barrows Dept. of Agricultural Economics Farm Profitability Videotapes Henry Taylor Hall 427 Lorch Street Pricing Standing Crops University of Wisconsin Feed Inventory--Quality and Quantity Madison, WI 53706 Considerations (608) 262-6871 Grain By-Products in Dairy Rations Feeding the Dairy Herd when Foragesare Herman Feletehausen Limited Dept. of Landscape Architecture Marketing Hay as a Cash Crop 25 Agriculture Hall Grain Situation and Outlook University of Wisconsin Dairy Situation and Outlook Madison, WI 53706 Cattle Situation (608) 262-7922
Family Living Videotapes Jess Gilbert Dept. of Rural Sociology Making Ends Meet 350 Agriculture Hall Tracking Ycur Spending University of Wisconsin Madison, WI 53706 Microcomputer Software (608) 262-9530
FINLRB FINTRAN 71
Wisconsin 65 Ward V. Jesse Mike lead Dept. of Agricultural Economics Dept. of Continuing Education Henry Taylor Mall 112 Teacher Education Bldg. 427 Lorch Street University of Wisconsin University of Wisconsin Madison, WI 53706 Madison, WI 53706 (608) 263-1154 008) 263-4472 William E. Saupe Jack Eloppenburg Dein. of Agricultural Economics Dept. of Rural Sociology Henry Taylor Mall 350 Agriculture Rall 427 Lorch Street University of Wisconsin University of Wisconsin Madison, WI 53706 Maason, WI 53706 (608) 262-6867 (608) 262-9480
Mary McCarthy Dept. of Agricultural Economics Henry Taylor Hall 427 Lorch Street University of Wisconsin Madison, WI 53706 (608) 262-9479
66 Viscoesin 72 North Central Region Rural Development Center
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