Looking beyond crisis in agriculture
How do farmers see it?

To our readers: Achieving sustainability in agriculture requires more than just changing farm practices. It also includes sustaining those who care for the land. Much has been written about the current farm situation, as both a crisis and a transition in agriculture that could spell the end of the family farm. We assembled a roundtable of five Iowa producers to give us their views from the front lines. We also asked them for solutions-what would help them stay in farming? We talked in late August, before the start of this year's harvest and news of federal assistance for farmers.--Laura Miller, Editor

Participants in the discussion:

Dave Deyoe has a 200-sow farrow-to-finish conventional and hooped building operation and farms 100 acres of crops near Nevada where he lives with his wife and two children. He has farmed since 1987.

Naomi Maahs raises fruit and vegetables on 20 acres near Adel, part of which has been taken out of production for a four-lane highway. On weekends she has operated a pick-your-own pumpkin patch, and works with other Iowa growers.

Jerry Peckumn started raising hogs in 1979 and purchased his current farm near Jefferson in 1988. He grows primarily corn and soybeans, and raises cattle. He and his wife have three children.

Mark Roose has been farming ten years near Pella. He grows certified organic corn, soybeans, oats, hay and barley on 235 acres. He manages a 35-head cow-calf herd, 240-head beef feedlot, and a 17-sow farrow-to-finish operation.

Keith Sexton lives with his wife and three children on a farm near Rockwell City where his mother was raised. He farms 1,000 acres in a corn/soybean rotation, and has farmed about 20 years.

From the Leopold Center were education coordinator Rich Pirog, who moderated the discussion, associate director and ag economist Mike Duffy, and newsletter editor Laura Miller who took notes.

RICH: How would you contrast the farm problem and crisis now with what happened in the 1980s? What is the same and what is different?

DAVE: There's more uncertainty about the future than in the 1980s. All the mergers and acquisitions in agriculture drastically affect how farmers do business, and you wonder who will be farming the land. In the 1980s, farmers knew that if they could hang on, they would eventually start making money again, but now you just don't know if you'll make it through this one and what you'll be coming back to.

KEITH: Land values dropped 60 percent in the 1980s but we're not seeing that now. At least in the 1980s you had some positive cash flow, but not in today's crisis.

JERRY: I agree. Today there's more of an income crisis than an asset crisis. Livestock facilities will keep their values but there's less hope of making money in hogs than in the '80s. I think about getting out.

NAOMI: In 1983 when I got started, there was a lot of encouragement toward diversification. For me, it worked. If you find the right location and have a population base nearby, you can earn an income from the soil. But even today we're having problems with prices; we're constantly forced to lower prices to compete with Canadian tomatoes or apple juice from China.

MIKE: One big difference is in land values. In the 1980s we had seven years of buildup, so it was a very hot market for land. This time we've only had two years of buildup, and the peak wasn't as high. There's also a general concern now about structural changes, and people are concerned about the impacts of biotechnology on cropping practices. It makes for a different outlook and different attitudes.

JERRY: A lot of people I talk to are saying maybe they should get out of farming and get another job.

MIKE: A lot of people I worked with in the '80s asked, "How can I hold on to get through this?" Some of the people I'm working with today are saying, "How can I get out?"

RICH: What do you think about federal efforts? Are they adequate to keep you farming profitably?

DAVE: I've talked with Congressman Leonard Boswell about the relief for hog payments. A lot of us didn't even qualify for the first round; the threshold was too low. I get 85 percent of my income from hogs, yet this program couldn't help me.

JERRY: I'm also concerned about the crop program. I've heard that we should raise the loan deficiency payment limit on crops, but it would seem to increase overproduction and favor only larger operations.

KEITH: I'm afraid that any time there's a perception of a guarantee not to lose money, you're going to draw outside investment.

JERRY: That's a problem. The loan rate is somewhat above most people's variable expense. It guarantees that we'll follow the alternative to only raise corn and soybeans.

KEITH: I like programs where farmers create their own kind of crop insurance. You then move into a revenue-based rather than the traditional commodity production-based program.

NAOMI: Crop insurance would be helpful for fruit and vegetable growers, too.

KEITH: And include livestock.

MIKE: I'd like to see more recognition of the true cost of agriculture. Some farming operations can create lot of environmental problems. Farm payments could based on grassed waterways, riparian buffer strips and other practices. I'd also like to see it encourage farm succession-people passing the farm along.

JERRY: And maybe subsidize no-till operations. That might be one of the factors that limits me from going all no-till, the idea that I'm probably going to have reduction in yield.

RICH: Let's bring the discussion back to your own farms. What are things that would help you to continue farming profitably?

DAVE: Higher prices. [laughter]

KEITH: I'd prefer lower costs.

NAOMI: Lower labor costs. You have to compete with McDonald's and K-Mart. With 20 acres, I hire about five part-time people and pay minimum wage. It's a big cost of your operation if you're diversified with crops like fruits and vegetables because it is so labor-intensive.

JERRY: I see us converting agriculture to unskilled labor, maybe not minimum wage, but I think that's what happens when we have so much consolidation. One example would be a dairy. With 3,000 head of cows, maybe the majority of jobs would be unskilled labor that would take the place of ten 300-head family-sized farms that had been earning a good wage.

KEITH: My main concern is consolidation. I fear we may just end up being an unskilled laborer for a major corporation a couple generations down the road. There may not be a market for entrepreneurial skills in agriculture.

MARK: Is that the farmer's fault? Have we done that to ourselves?

KEITH: Partly. Companies promote their new technology. By buying into it, we're adding fuel to their fire to consolidate. Not only are we signaling that we want the technology, which costs so much to develop that it necessitates consolidating the research budgets of two or more companies, we're also providing the companies with profits to consolidate.

DAVE: When the government allowed companies to patent genes in plants, it changed everything. It was worth a lot of money to go this route, and we may be heading the same way on animal genetics.

JERRY: It seems like the GMOs, genetically modified crops, in the short run at least, have cost the farmer money because we've added in the case of Bt corn, maybe 5 percent supply that we didn't always have. How much would that decrease the price?

NAOMI: And some countries refuse to buy GMOs.

MARK: That is the folly of the American farmer. Rather than saying, "OK, the consumer is not interested in what we're producing, let's produce something they want," we moan about why consumers won't change their mind.

MIKE: If the customer is king-or queen-then you provide them what they want.

DAVE: I think it works both ways. I don't think there's necessarily anything wrong with any of these new genes and things like that. But what difference does it make if people have made up their mind that it's something bad-then it really doesn't matter.

RICH: What can be done to address market niches and segments so that Iowa producers can get more of the consumer dollar?

MARK: Let's say we get a co-op slaughterhouse in Iowa. Is the farmer benefiting? It's good for Iowa but is it good for the farmer? Can we produce something that doesn't need value-added? Do more direct marketing.

NAOMI: When you're close to Des Moines, it's really amazing to see people paying $50 to fill their trunk up with pumpkins. The consumer wants to see what is growing and how you are growing it.

KEITH: I commend the Leopold Center for promoting "Iowa-raised" meals at various conferences. Promoting Iowa food is a service to agriculture. Even if I don't produce the food that is served, if enough people demand that type of food, I may get into it.

DAVE: Farm Bureau just recently is trying to buy everything they can from Iowa for the cafeteria there and they serve hundreds of people a day.

JERRY: Maybe they could serve Iowa food at the State Capitol?

NAOMI: Wouldn't that be a nice gesture if all the food came from Iowa?

RICH: What else can the Leopold Center do with its programs to help Iowa producers of all kinds?

JERRY: How about marketing? This is one of the biggest barriers for organic food or Iowa-produced foods. Part of the marketing problem is getting people concerned about where it comes from, also finding markets to sell your produce.

KEITH: Mike had mentioned earlier about making it easier for a younger person to get involved in a farming operation. Unfortunately, our estate tax laws encourage land owners to hold on to their farms till they die.

JERRY: The reason I'm a farmer is because an individual was concerned about another family farm starting. My landowner has really never been recognized by anyone for taking the risk of letting me farm his land and helping me get started.

DAVE: We see a lot of farm management in our area. Instead of trying to find some young producer to take it over, retiring farmers who own their land go to a farm management firm, or the person already growing 5,000 acres. These people already have machinery, and the landowners think they can get a better return.

MARK: I don't know how to change that attitude. Ten years ago I had this family come and ask me if I'd like to farm their farm. I was enroute to college and I hated school, so it was an easy decision for me. But if it wasn't for them, I probably wouldn't be in agriculture.

MIKE: The young person cannot start off with a big debt load. They've got labor, not capital, but our system today is capital intensive. We need to show farmers as they retire that their farm is worth more as a unit than it is busted up. In other words, instead of having an auction and getting rid of the equipment and everything, it's better to transition to another generation. But it's difficult.

JERRY: I don't think there's any doubt that our farm policy has really encouraged the intensive capital and larger farms. The Leopold Center should try to educate people about that, and work toward federal farm legislation that encourages smaller farms.

RICH: How do you feel about the future?

JERRY: I'm apprehensive because it's changing so fast and I don't know if we're going to have family farms. I don't know if I'll have an economically viable unit ten years from now.

KEITH: I'm optimistic that I'll be able to compete for the rest of my career. I am concerned about my children and grandchildren.

JERRY: Would you want your children to farm? All of them?

KEITH: If they want to, sure.

JERRY: My dad was a wise man. He told me not to farm. I have told my children that I'd like to have them farm if they'd like to, but they'd better have a profession they can fall back on.

DAVE: I wouldn't let my kids farm right after high school. I'd tell them they've got to go to college and experience working somewhere else first.

KEITH: That would be a requisite for my kids, too.

NAOMI: Our children are all in their own careers Even my daughter who worked for me didn't want to start up in a fruit and vegetable business. I'd like to see people be able to stay on the farm. It's a great way of life. It's a good thing to do a hard day's work and sweat a little bit.

MARK: I tell my kids that farming is not a white collar job. You've got to get your hands dirty. A lot of my peers are failing. All they really want to get out of farming is $40,000+ and a lot of cab time. But that doesn't work.

JERRY: I agree. I've never been a big believer in government subsidies, but I think the family farm is worth saving because of the type of environment it gives children. I'd like to see us redirect our government subsidies to support family farms. If we're going to put out money, we should use it to achieve a social means that's worth achieving.