As the US economy grows, the strength of the dollar grows with it. This has lead to a problem for farmers as they lose out on exports. This, with the elimination of certain subsidy support, has lead to many farmers either giving up farming or having to take on a second job in order to support themselves.
[showhide type=”transcript” more_text=”Read the Transcript »” less_text=”Close the Transcript”] ELIZABETH FARNSWORTH: The Senate yesterday passed a $7.4 billion farm aid package designed to help ease the plight of American farmers. Fred De Sam Lazaro of KTCA, St. Paul-Minneapolis, reports on what’s going wrong. FRED DE SAM LAZARO: Big agriculture shows are a summer ritual in farm country, a chance to showcase gleaming new equipment. But at Minnesota’s Farm Fest this week, very few people were seriously kicking the tires. MAN: Just looking. Good economy: bad for farmers MAN: You looking or buying today? MAN: Just looking. Waiting for my wife. HOMER SCOTT, Vendor: Well, the people that are coming in are just sightseers. They’re not actually dealing. They’re not even interested in finding out where our dealer is. You know, they’re just — it’s kind of tough, you know. Of course, then you’ve got to listen to their sad story. And you then have to tell them your sad story. MAN: It wasn’t set up right, didn’t help the right people. FRED DE SAM LAZARO: In the big tent, more sad stories and little hope things would change for the better anytime soon. DEAN KLECKNER, President, American Farm Bureau: This is truly a free market. We don’t like it now. I despise it now. We’re losing sales because of our strong currency, which is a reflection of the good U.S. economy. Agriculture is not, we give you that. The economy of the country is great. Our currency is strong. Other currencies are weak, and we’re in trouble. FRED DE SAM LAZARO: The strong dollar is only one of several factors that’s devastated farmers in recent years. They’ve had to endure drought, floods, crop disease, fewer exports to Asia and global competition, all at a time when federal farm subsidies are being phased out under reforms passed by Congress in 1996. Many experts say the current crisis dwarfs the hard times seen here in the 1980s when high interest rates drove thousands of farmers out of business. Paul Gruchow is an author and historian. PAUL GRUCHOW, Author: Maybe 50 percent of farmers, some people tell me, will go out of business this time around. And it’s inconceivable to argue that those are farmers who just are not very good at what they do. This is a group of farmers who really are – who’ve survived. The average age of farmers is pretty old. They’re people who have survived all the previous crises, they’re pretty good, and they know what they’re doing. Finding new lines of work FRED DE SAM LAZARO: Some will survive again, but not as farmers this time around. AUCTIONEER: Bid $500? What do you think, guys? Last call. Will you give $475? Sold for a mere $450. FRED DE SAM LAZARO: One year ago, we attended the auction at the farm Don Taus’ grandfather began at the turn of the century. DON TAUS: We are living with the same prices that we lived with in the early 1980s in the dairy business. And you could buy a pickup then for $4,000 or $5,000. You can’t touch one for $20,000 today. FRED DE SAM LAZARO: Today the 61-year-old Taus works in a kitchen cabinet factory. His job is to keep its many machines running, the first job in years to guarantee him an income. DON TAUS: I don’t have the pressure of having to make sure that that crop comes in, and if it doesn’t come in, that I’m going to be able to come up with dollars from other sources to keep my livelihood going. I’ve had no formal training, but I guess to me, a machine is machine. It’s usually run by an electric motor, and it’s run by shafts pulling belts and chains, and pretty similar to any equipment that I’ve run all my life. So it wasn’t a hard adjustment. FRED DE SAM LAZARO: A booming non-farm economy across the upper Midwest is helping many farmers make that adjustment. Bob Grzadzelewski was forced out of farming by the record 1997 floods. Today, he owns a thriving construction firm, taking advantage of a boom in rebuilding. BOB GRZADZELEWSKI: There’s probably a job for everybody. There’s a time when you can’t see it, as a farmer you can’t see it. You sell yourself short until you look at the big picture and what you’ve done and what you’ve accomplished in your lifetime and how many things you’ve learned doing the job. You’re a mechanic. You’re a financial person. You’re a marketer. You’re an agronomist. You’re a whole package in one. So, yes. Yes, there’s jobs for everybody. LUCIEN BOLL: I’m not worried about a job. There’s jobs out there. There’s jobs all over, and I realize that. FRED DE SAM LAZARO: Lucien Boll says his problem is not finding a few job, but getting out of the one he’s had all his adult life. When we visited him a year ago, Boll thought he might be swatting his grain for the last time. LUCIEN BOLL: I think this is it. I mean, if we don’t get some prices, this is it. Equipment’s getting old. Repairs are going up. I mean, we just can’t, you know, cut corners and cut corners. We can’t do it any more. FRED DE SAM LAZARO: A year later, Lucien Boll is still tinkering with old equipment. Bailing out, he discovered, was not an option. LUCIEN BOLL: If I got completely out of farming and just threw up my hands and said, “to heck with it,” I’d have such a big tax burden, I couldn’t pay it. And the banks, they got rules that they can’t come and take your home quarter and your house. You know, you file bankruptcy, you get out and that’s it. But the government can. The government can come in and take everything you’ve got to pay the taxes. How do I go pay a tax lien of $100,000 on an $8-an-hour job? Next generation of farmers FRED DE SAM LAZARO: So for now, Boll’s survival strategy is to buy time. He plants only half the acreage he did last year, and he sold the farm equipment to his son. 25-year-old Brian Boll already has a full-time job for a computer software company, but he was able to get a low-interest loan under a federal program for young farmers. BRIAN BOLL: In my dad’s case, I know he would love to keep farming. He’s frustrated now, because he’s drowning in a sea of debt, basically, and can’t see the light at the end of the tunnel. And it’s frustrating for him, but I know he would keep doing it if he could. And that’s one reason I want to farm, because I want to hang on to the land. I want to hang on to some of those things that he’s worked for and that I’ve worked for. FRED DE SAM LAZARO: They may have a long wait before prices rise high enough to make farming profitable again. Richard Nelson of the University of Minnesota says aside from all the weather and disease problems, farmers here face daunting competition. RICHARD NELSON: In a country like Brazil where there’s a fair amount of land in the Piedmont that goes for perhaps $100 an acre and land in this valley might be $1,500 or $2,000 and prime land in Iowa is $3,000. Now, as I said, I do think that it will come back. I do think we have some things in our distribution system and in our growing system that gives us an advantage. Whether or not there’s a future for that 600-acre family farm that will generate enough income to comfortably raise a family is another story. I think those days probably are over. FRED DE SAM LAZARO: Nelson says the likely survivors will be large-scale farmers, planting several thousand acres, acquired or rented from neighbors who are leaving the area or leaving the business of farming. CAROLYN WEBER: The flies are horrible, aren’t they? FRED DE SAM LAZARO: Carolyn Weber used to farm 2,000 acres around her home with husband Dan. Today, they lead only part of the farm lifestyle. In 1995, after years of financial struggle, the Webers decided to give up all but 200 of their acres. They rented their land to a neighboring farmer. It was a wrenching move that came only after Dan Weber had a heart attack at age 39. CAROLYN WEBER: And we had gone back and forth and had discussions and many tears and some raised voices. And it got to the point, well, what the hell are we going to do then? At that point we said nothing. So this is what we’ll keep doing. But when it came to the point that it challenged our life, not just the lifestyle, but Dan’s life itself, the stress got to be humongous. FRED DE SAM LAZARO: Dan Weber now works as a research plant technician at a local university campus. His wife Carolyn just graduated with a degree in agricultural economics. She expects to soon have a job that will allow her to hang on to the ancestral farm home. CAROLYN WEBER: I think just lying down and saying, “poor us” is not a quality that people here hold on to. Maybe I’m a lofty idealist, but I do believe that there’s a very strong infrastructure here and that there is a strong desire and a good quality of life here – not that there that there isn’t good qualities of life in other places, but the quality of life that is here is something that I desire and that I know my neighbors desire and that we’re willing to work towards sustaining that, whatever that means. FRED DE SAM LAZARO: The challenge for Carolyn Weber is she’ll likely have fewer and fewer neighbors. These days, many Red River Valley counties record their annual births in the single digits as people leave an area that plays a smaller and smaller role in the U.S. economy. [/showhide]