Extension Communications
3614 Administrative Services Building
Ames, Iowa 50011-3614
(515) 294-9915
7/17/00
- Contacts:
Paul Lasley, Extension Sociology, (515) 294-0937, plasley@iastate.edu - Del Marks, Extension Communication Systems, (515) 294-9807, delmarks@iastate.edu
Farmers Say Financial Troubles are Widespread
AMES, Iowa -- Nearly three-fourths of Iowa farmers responding to a survey question about farm financial health say their neighbors have moderate to serious money problems.
That assessment, part of the 2000 Iowa Farm and Rural Life Poll, is the highest it has been in the past decade. Only 43 percent said they had neighbors with moderate or serious problems in 1998, according to Paul Lasley, Iowa State University extension rural sociologist who conducted the poll. Throughout the 1990s, the poll has found about 10 to 16 percent claiming their neighbors have very serious financial problems, but this spring the proportion jumped to 33 percent. Lasley said there are several reasons for this increase. "Chief among them are chronic low prices, increased costs of production, especially interest rates for borrowed money, and input costs such as fuel and fertilizer."
"We see an equally disturbing rise in the proportion of producers who describe their own financial situation as a very serious problem," Lasley said. Forty percent said the financial problems on their own farms were moderate to severe this year, compared to only 24 percent who held a similar view in 1998. "It is typical that respondents are more likely to indicate that their neighbors are having financial trouble than to admit to one's own problem. However, the 16 percentage point increase in two years is disconcerting," Lasley said.
"The only farmers in our area who are making any money on farms are the one who have the farm paid for with a minimum of 600 acres. A high percentage of farmers are working a majority of the year off the farm to make ends meet," a Fayette County farmer wrote in the comments section of the survey form.
If farmers see financial difficulties for their neighbors in farming, they see even more serious problems for other businesses in rural areas. Fifty-four percent of the poll respondents said agribusiness firms in their area face moderate or very serious financial problems, compared to 32 percent who said such problems existed in 1998. And 20 percent said banks and other financial institutions in their communities have financial problems, almost double the number farmers reported in 1998.
"It seems like the bankers around here were content with farmers signing over their loan deficiency payments, market loss assistance and other government payments to apply to loan balances this year. I expected to see many more farm equipment sales this past winter," a Lyon County farmer wrote.
"Although our assets might look impressive, we haven't been able to pay down our $100,000 bank note any in the last five years. We are just able to pay the interest and fix what we have to around the farm," another Fayette County farmer wrote.
These findings paint a rather stark picture for the future of agriculture, Lasley said. "Not only is it troubling for farm operators, but it forebodes even more long term issues about the question of who will the farmers in the next generation. Tough economic times serves to discourage young people from taking up farming and in turn contributes to the demise of family farms," he said.
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. A statewide random sample of 4,977 Iowa farm operators were sent mail questionnaires in February, with a 61 percent response rate.
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