University Wire / April 19, 2001 / By George Green, Daily Nebraskan
Thanks to the federal government, farmers last year saw red change to black.
According to an annual report compiled by the Nebraska Farm Business Association, many farmers would have been caught in the red of debt without government bailouts.
The report revealed the average income of 156 farm operations surveyed was $48,279.
The report also discovered the average government pay-out to those farmers was $57,561.
Thus, had the government not stepped in to bail out the farmers, on average they would have fallen about $10,000 into the red.
The negative profit numbers didn't surprise Gene Watermeier, a Nebraska farmer who works near Unadilla.
In an age of ever-changing global markets, he said, someone must mediate the volatile markets, otherwise farmers couldn't afford to feed the world.
Thus, he said, his government payments don't make him hang his head in shame.
"I don't apologize for the those government payments," he said.
According to Tina Barrett, an associate with the Farm Business Association, farm payments similar to Watermeier's have ballooned since the 1996 Freedom to Farm Act became law.
The act lessened government control over which crops were grown and instead encouraged farmers to grow whatever crops they saw fit, with the government ensuring them new markets would exist for their product.
In 1996, the average government payment to farmers was $10,939. By 1999, it had swelled to $51,153.
But Barrett said it's important to note her group's report did not represent the entire agricultural community.
Rather, she said, it gave a glimpse at a select few who were members of the farm association and wanted to have economic evaluations of their farms.
If the survey had included all Nebraska farmers, experts predicted the gap between market-based profits and government payments would have expanded.
Both the University of Nebraska Cooperative Extension and the Nebraska Community Colleges helped sort the data.
As bad as the news got for farmers, Barrett noted that some farmers weathered the agricultural economic slump quite well.
In fact, 22 of the 156 farm operations turned a profit of more than $100,000 last year.
She said these fortunate few dodged the economic plague because they were larger operations with more product to push.
But despite some farmers' successes, Barrett said, some farmers in southeast Nebraska got dealt another blow by last year's stifling drought.
"(Farmers in southeast Nebraska) had very limited yields," she said.
Brian Wolford, executive director of the Nebraska Farm Service Agency, which administers many farm programs, cited increased export competition from other countries as a contributor to national farm slump.
"Other countries are catching up," he said.
But, he said, nailing down a culprit for the agricultural recession is a problem economists have been tackling with limited success for years.
In addition to better competition, Barrett said, 1996's farm bill gradually caused a backlog of excess crops because it opened the gates for farmers to grow what they wanted, trusting that the economy would adjust to farmer's decisions.
But as supply skyrocketed, she said, demand plummeted.
For example, she said, the average cost of a bushel of corn hovered around $2.50 a bushel over much of the last decade. Last year, though, she said, a bushel sold for about $1.80.
To offset these loses, Wolford said, his agency engineered a slew of payment programs to help farmers.
Most of the $57,000 that the average farmer received this year, he said, came from a Market Transition Payment program, Market Loss Assistant program and emergency aid grants.
Both market programs buffered farmers anxiously waiting for the commodity market to rebound, he said.
But, he said, "The markets really haven't adjusted."
Wolford said the emergency program allocated dollars to farmers caught in pinch because of natural disasters, particularly droughts.
(C) 2001 Daily Nebraskan via U-WIRE:
