Extension Communications
3614 Administrative Services Building
Ames, Iowa 50011-3614
(515) 294-9915
9/27/99
Contacts:
Paul Lasley, Extension Sociology, (515) 294-0937, plasley@iastate.edu
Del Marks, Extension Communication Systems, (515) 294-9807,
dkmarks@iastate.edu
Farm Family Spending Reflects Economic Pressures
AMES, Iowa - Iowa farmers are coping with economic hard times by watching how they spend money for everyday needs and cutting back on some activities.
A large majority of farmers who responded to the 1999 Iowa Farm and Rural Life Poll have taken at least one step to reduce living expenses, reported Paul Lasley, Iowa State University Extension sociologist who directed the poll. Seventy-one percent say they are reducing expenses by shopping at discount stores, and 61 percent are cutting medical costs by switching to generic drugs.
Of the 2,583 participants in the 1999 poll, about half (52 percent) say they are saving money by buying more used or second hand merchandise such as clothing, furniture and machinery. And 51 percent said they save money by avoiding name brand products when they have a choice.
Some financial adjustments that farm families have made are prudent decisions, but they can have important negative impacts on local businesses and may have negative long-term consequences for family life-styles, Lasley said. "Shifting purchases to discount stores or delaying purchases may result in financial stress among family-owned independent main street businesses," he noted.
More than one third of the poll respondents said they have changed food shopping or eating habits to save money, and 32 percent said they have reduced household utility use. Thirty-four percent say their standard of living is declining due to their financial situation, and 33 percent say they have delayed retirement plans.
Other ways of saving money include changing transportation patterns, mentioned by 30 percent, and postponing medical care, mentioned by 21 percent.
In addition to changing their everyday spending habits, farm families are looking at other ways to save money. Fifty-one percent said they are cutting back on what they spend on social activities and entertainment, and 47 percent said they have postponed major household purchases. Forty-five percent have cut back on charitable contributions, and 45 percent have postponed purchases of major items needed in the farm business.
Twenty-three percent of the poll respondents say they are purchasing more items on credit than they used to, and 22 percent say it has been necessary to borrow money from lenders for living expenses. Another 10 percent have borrowed from family members. A few, 16 percent, have raised money by selling possessions or cashing in insurance, and 7 percent have sold land or other assets to reduce debt.
Taken as a whole, these data show the widespread and pervasive changes that farm families are doing to make ends meet," Lasley said. He added that the findings document the seriousness of lifestyle changes farm families are making and the tough choices they may face if farm prices do not improve.
"For example, rural churches and other groups that rely upon charitable contributions will undoubtedly be adversely affected as farm families reduce their giving," Lasley said. "This only serves to reduce the capacity of these organizations to help others during these difficult times," he noted.
In addition to reducing expenses, a significant number of farm operators have sought to increase income. Thirty-seven percent said at least one family member has taken an off-farm job in the past 12 months, and 28 percent said they are working more overtime at off-farm jobs. Twelve percent have started home-based businesses, and 21 percent are trying to cope with income needs by expanding their farm operations.
The Iowa Farm and Rural Life Poll is funded by ISU Extension and the Agriculture and Home Economics Experiment Station. The purpose of the poll, conducted since 1982, is to ask farmers' views on a variety of rural and agricultural issues. Mail questionnaires were sent to a random sample of 4,947 Iowa farm operators in mid-February, with a 52 percent response rate.
ml: isufarm
Extension programs are available to all without regard to race, color, national origin, religion, sex, age, or disability.