Listen: After the Flood, Part 1

Mainstreet Radio presents broadcast from the Meadowland Farmer's Co Op in Lamberton, Minnesota. The program focuses on how local area is dealing with the effects of flooding from the previous spring and summer, and the impact it is having on farms and the economy.

Program contains reports and interviews on climate, government programs, and banks. This is followed by an audience Q&A.

This is first in a two-part program.

Click links below for other part of program:


1994 Associated Press Achievment Award, first place


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MARK STEIL: Minnesota Public Radio's Mainstreet Radio is supported by a major grant from the Blandin Foundation, strengthening Minnesota's rural communities through grant-making leadership training and conferencing.

CATHERINE WINTER: Good morning. I'm Catherine Winter. And this is a special Mainstreet Radio broadcast, After the Flood. For the next two hours, we'll be talking about the impact this year's floods and wet weather have had on farmers and on the economy of Minnesota, where farming is a major industry.

We're coming to you live from Lamberton today, a town of a little over a thousand people in the farm country of southwestern Minnesota. We're sitting in front of the Meadowland's Farmers Coop in downtown Lamberton. To our right, there are some tall, white grain storage silos against a bright, blue, absolutely clear sky. The noise you can hear in the background is a conveyor belt that brings the grain up into the storage silo.

We have a small audience gathered to listen. And if you're listening locally, please feel free to come down and join us. We'll be taking questions later. My co-host this morning is Mark Steil. Good morning, Mark.

MARK STEIL: Good morning, Catherine. Do you want to take credit for this beautiful weather, or should I?

CATHERINE WINTER: I think you can. I know I can't.

MARK STEIL: The weather we have today with the blue sky is a little bit of an irony. We're here to talk about rain to a great extent, things that happened the past summer. When farmers remember weather-related crop problems, they usually think of a lack of rain. What makes this year so unusual is that it was rain.

Normally, the lifeblood of crops that hurt farmers storm after storm either washed out standing crops or prevented farmers from planting fields at all. In the next two hours, we'll examine some of the results of all that, the financial worries, the rains brought farmers, the impact the weather has had on small towns that depend on farming.

We'll also look at what lies ahead, including harvest prospects and the credit problems many farmers face. We'll visit some farmers who are on their way out of the business, and we'll also hear the thoughts of some young people on the future of agriculture.

CATHERINE WINTER: Coming up in a moment, we'll have the story of one farmer's year struggling with flooded fields and frost. Later, we'll hear from a panel of experts on farm issues. And we'll take your questions both from our radio audience and from the people gathered here in Lamberton.

This year's bad weather has meant constant worry for farmers, first about planting, then drowned-out crops, then frost. It was a summer when the abnormal became the normal. For a Yellow Medicine County farmer, the year has been the worst of three bad years in a row, and it's taking a toll. Mark Steil has that story.

MARK STEIL: In mid-July, the countryside should be the deep green of healthy corn and soybean fields, but this year, many were pockmarked with rain damage. Crops were streaked with yellowy patches of water-choked plants, ponds dotted many fields. In some areas, mudflats stretched a mile or more where water had receded.

One farmer north of Marshall tried to cultivate corn, but two deep ruts marked the spot where muddy soil stalled the tractor and ended the effort. In some fields, swamp rushes grew as ducks swam between corn rows. Montevideo area farmer Galen Halverson struggled with wet conditions. He sees stunted corn and soybean fields as he drives around his farm on a cloudy, cool July day.

GALEN HALVERSON: Well, on the left here, there's a cornfield that-- oh, there's a small area that's drowned it out in the corner of the field. The beans on this higher ground here look fairly good. If you were-- if you were talking about the first part of June, they'd be in great shape, but we're in the middle of July.

MARK STEIL: Minnesota River flooding destroyed about 150 acres of Halverson's crops, the third straight year that's happened. The rest of the fields are far behind schedule. And he's already worrying about an early frost as he pulls into his farmyard to gas up his car.


GALEN HALVERSON: I come home, and I look around. And I see I need paint or siding on my house and need new windows, all these things that need to be done, but I can't afford to do it. I need to replace machinery. I can't afford to do it. The hard times are here. I guess we have to weather them, but you keep going. Hopefully, next year is better.


MARK STEIL: A month later, Halverson pours coffee in the kitchen of his old farmhouse, overlooking fields which have made progress since July.

GALEN HALVERSON: Things are looking a lot better than they did a month ago. Corn is tasseled and set in ears. The beans are all pretty short, and they're not looking great by any means.

MARK STEIL: Warmer weather in the end of torrential rains have restored some green to the fields and helped them advance. But on this August morning, Halverson's health overshadows worries about crop progress.

GALEN HALVERSON: Well, about 3 and 1/2 weeks ago, I had a heart attack. It was a surprise to me and a surprise to everybody else. I'm 39 years old. I don't show any signs of having any problems in-- my cholesterol is not high. My blood pressure is not high. My stress level might be a little bit up there.

MARK STEIL: After a short hospital stay, Halverson was given the OK to resume normal activities, including farmwork. He says doctors were not able to pinpoint a cause of the heart attack, but didn't rule out stress as a contributing factor.

GALEN HALVERSON: We talked about stress as far as being a farmer and going through tough times. But I guess you could make a case for it, but I don't feel like I'm under any more stress than I have been in the last couple of years. But I guess I don't really know the answer to that, but I guess nobody really knows the answer to that.

MARK STEIL: By mid-September, frost is Halverson's main concern as he rips an ear of corn from a stock.

GALEN HALVERSON: We snapped it off. And looking at it, that corn there would not fare very well with a frost.

MARK STEIL: That night, a light frost touches his crops. Although it didn't damage corn significantly, it hurt soybeans, cutting yields another 25%. Even without more freezing temperatures, corn and soybean yields will be far below normal.

And Halverson's already making plans for off farmwork to supplement his income. His father, also a farmer, did that for years to survive. Of his children, only Galen is a farmer. Galen Halverson says his parents and brothers and sisters have tried to talk him out of the farm life, but he says he'll fight on.

GALEN HALVERSON: I still look at it as something that I want to do, and that there will be better days. And I'm still waiting. I've been waiting for 20-some years, and I'm still waiting for the real good days. But I still like what I'm doing. And I guess I'll still try to work it out the best I can.

MARK STEIL: Ahead is a difficult harvest. Additional rains could make fields too muddy to pick until soil freezes. It could be an expensive harvest with farmers paying high fuel bills to dry corn so it won't rot in storage. At best, Halverson hopes his farm income this year will cover what he spent to plant the crop. If he can salvage that, he believes he can farm again next spring. This is Mark Steil, Mainstreet Radio.

CATHERINE WINTER: Joining us now here in front of the Meadowland's coop in Lamberton are two people who've been closely watching the weather this year. Dennis Youngerberg is a purebred cattle producer and grows corn and soybeans in southern Minnesota. Wally Nelson is the former superintendent of the Southwest Minnesota Experiment Station here in Lamberton. Wally Nelson, I wanted to start with you and ask you, can you give us a sort of an overview of how bad the problem is?

WALLY NELSON: Well, it really started last fall when in September on through December, we ended up with over 8 inches of precipitation here that left our soils full and then this spring. Since then, we've had 36.21 I believe out at the experiment station this year.

CATHERINE WINTER: Inches of rain that is, huh?

WALLY NELSON: Inches of rain. And that means that we are about 43 inches for the last 12 months. And that's-- 25 is normal. And in a drought year of 1976, we only had 12.4.

CATHERINE WINTER: For farmers, does that mean a major disaster for a lot of people?

WALLY NELSON: It can because not only we were late in planting, but if we looked at our temperatures, they were probably the third or fourth coldest summer we've had in this century.

And talking with Mark Seeley, our climatologist extension, he said, if you look at the soil moisture we started with, the rainfall we had in southern Minnesota, the cloudiness and the temperature, it's probably the worst agricultural climate we've had in the last century, or this will go down as the worst for agriculture. So to live in the center of a continent, to have a normal year is just damn abnormal.

MARK STEIL: Dennis Youngerberg, you farm about 14 miles east of us here in Lamberton. What sort of year did you have on the farm?

DENNIS YOUNGERBERG: A wet year, a crop damage. Crop damage was probably limited to 80, 90 acres of our production. We weren't able to plant and probably another 90 acres that we did have planted that drowned out among the-- I guess that was the biggest problems.

MARK STEIL: There's a lot of talk now of a hard freeze, a good chance of that next week. How would your corn and soybeans fare if that does occur?

DENNIS YOUNGERBERG: Oh, it would probably cut our soybean yields maybe another 10%, 15%. Our corn I think is just in the mid-dent stage. And I suppose if I were to chop that for silage, which I probably plan to do, I would maybe get 65% of the feed value at best.

CATHERINE WINTER: You're listening to a live broadcast from Lamberton in southern Minnesota. Dennis Youngerberg, can you tell us, does that mean a major financial loss for you?

DENNIS YOUNGERBERG: Well, very definitely. I guess we don't know how much money we'll pick up from a federal crop program or a federal crop insurance nor from a disaster. So it's really hard to pick what your income might be. But I suppose at best, we'd be looking at a reduction in a gross income of around $70,000, $80,000.

MARK STEIL: Wally, you've been around for a number of years. And seeing the sorts of damage that a freeze can do, where is the corn crop at in this region? And what might happen next week?

WALLY NELSON: Well, because it's been so cool in the late planting, a lot of the corn is just barely starting to dent. It's in the late dough stage. It's early dent. This has several complications in that it's going to take a long time to dry out if we're going to try and harvest it for grain. And, of course, we don't have enough livestock to cattle like Dennis to put it all up for silage.

And so it gives a farmer a real dilemma in that it may be November before it'd be dry enough to combine. It'll be light in weight. If it freezes now, the majority of it will have a test weight down in the 40s someplace. And then it'll take a lot of energy to dry it when we do get it out. And if-- the other thing is we get some more rainfall. How are you going to get across the fields to get it out before it freezes up?

CATHERINE WINTER: What's that going to mean for the economy of this area?

WALLY NELSON: Well, I think it'll have a long-lasting effect. The amount of personal disposable income will probably go down. Hopefully, with the disaster and the other payments, there'll be enough to take care of the baseline. So the amount of money to go in a vacation, to go out to eat dinner, and so forth I think will go down very drastically.

CATHERINE WINTER: It's just about 15 minutes after the hour. Coming up later in the program, you'll have a chance to call in your questions, and we'll be taking questions from the audience as well.

MARK STEIL: Dennis, I was curious if you took part in any of the federal disaster programs, 092 programs, or some of the others that paid farmers to plow their crops under.

DENNIS YOUNGERBERG: No, we didn't. If I were a grain farmer, I would most definitely take the 092. I have a large brood cow herd, so we'll chop most of the corn for silage. We did try to get some ASCS emergency funding for flooding. And I guess I wouldn't say the word amused, but I was somewhat surprised to find out that there was no funding available for anyone that lived along a creek or river if they had flooding in the last three to three years out of the last 25.

And I thought that was amusing because if they don't give any flood relief or any payment for people that live along a creek or river, I was wondering where all the money was going to go along the Mississippi River and everything because they've got a lot of money. They say it's going to help relieve the problem. But if you live along a creek or river, it looks like you won't qualify for it, so it's interesting.

CATHERINE WINTER: What kind of impact will the problems that you're having this year have in the coming years?

DENNIS YOUNGERBERG: I think the problems we're having right now will definitely go into next spring. And depending on the weather, we have the rainfall. I think that's really going to be critical. We've compacted our soil so bad the last year or this past year that I think those effects might go into the next three, four, five years. And it's going to be problems that I think will live on a long, long time.

CATHERINE WINTER: Would you agree with that, Wally?

WALLY NELSON: Yes. In fact, I think this is one of the reasons some farmers went into 092 as because they looked at not being able to get into-- get their corn out until November or later. If you go past the first week in November, your risk factor goes up over 20% and getting snowed in and not getting it out.

And then you have problems next year trying to get a crop in. And any more rainfall now this year will add to that problem. And certainly if it catches snow out there, that will add to the problem because we won't freeze up and so forth.

CATHERINE WINTER: Let me ask you real briefly. I think that the 092 or 092 program is probably going to come up again and again. Is it possible for you to explain for our more urban listeners what that program entails?

WALLY NELSON: Well, what it entails is two parts to a program. But you destroy your crop at this point, or you earlier wouldn't have planted it because-- and you get some government payments for this. And the alternate-- and then you have to destroy the crop, so you don't produce. And then you can't seal it. The government has some other programs that they think it will be a wash as to what it costs the government to do, but you have to destroy the crop.

CATHERINE WINTER: So the idea is that you're betting that you're not going to be able to bring a crop in. And so the government is paying you a disaster relief because you couldn't get a crop in. And you destroy your crop so that you don't both get the government relief and bring in a crop. Is that correct?

WALLY NELSON: That's right. And most of the crop at this stage is such that-- we mentioned before it'd be very difficult, very high priced to dry. The quality would be very low. There would be huge discounts and so forth.

CATHERINE WINTER: Did a lot of farmers do that?

WALLY NELSON: Yes. Depending upon the county and so forth, I believe Redwood County someplace between 25% and 50% of the acreage. This was just last week. We'd have to ask ASCS what it was. But Worthington, which is in Nobles County-- that county, I understand went 75% to 80%, is into the program because they were a little wetter there. And so it depends upon your soil type and where you happen to get extra rainfall. In center of a continent, we do have these storms that are somewhat localized at times.

MARK STEIL: Dennis, did you receive any payment for the acres that were flooded out and drowned out or were not planted? Any federal--

DENNIS YOUNGERBERG: Not yet because we haven't finalized the damage. And until we harvest and assess the rows that we have left, no, we haven't received any payment yet whatsoever.

MARK STEIL: Is that a lot of paperwork to get through then?

DENNIS YOUNGERBERG: It isn't so bad. I guess we're getting used to it. I always thought it'd been nice if a person would have planted trees and just sold pulpwood for paper. But no, it's not-- oh, it's disgusting. Paperwork is always disgusting, but it-- I mean, you're getting something for it, so it ain't quite so bad.

MARK STEIL: When you think ahead to this winter, and you sit down and calculate where you're at and look at next year, what bottom line are you projecting for yourself?

DENNIS YOUNGERBERG: Profit-wise or what?

MARK STEIL: If there would be a profit. Would there be a profit?


MARK STEIL: Will there be?

DENNIS YOUNGERBERG: There is no possible way there can be a profit. No. And to project for next year-- I mean, the farmer's an eternal optimist. No matter how bad it is, he thinks it's going to get better the next year. You talk about the weather being really the problem here. I wonder if that's not the wrong question we're addressing. I think the pricing of our product and the fact that we have no control over our product and the fact that we have no control over our inputs is probably a bigger problem.

MARK STEIL: Have prices reacted to the weather situation in the Midwest?

DENNIS YOUNGERBERG: I don't know what the prices were last fall exactly, but I'm thinking corn might be a dime higher, and beans might be $0.35 higher.

CATHERINE WINTER: Is that a lot, or is that a little?

DENNIS YOUNGERBERG: That's absolutely nothing.

CATHERINE WINTER: Well, I suppose we should let the two of you get out of the sun before you get burned. Is there anything either of you'd like to add that we didn't bring up?

WALLY NELSON: Well, climate is always-- everybody talks about the weather. And there is a lecture going on in the 5th of October down in campus called, Is climate still important? It's after one of our state climatologists died very prematurely. And so they have a lecture series.

And I think that we need to take more account and take into-- even in our research in farming, how do we best take advantage of everything that weather has? And I think we've done a lot of this. And it would have been a much greater disaster if we would have been 50 years ago than now.

CATHERINE WINTER: All right, thanks a lot. Wally Nelson is the former head of the Southwest Minnesota Experiment Station in Lamberton. Dennis Youngerberg produces purebred cattle near the town of Springfield about 20 minutes away from here.

MARK STEIL: And we're outside at the Meadowland Farmers Coop in Lamberton with a bright, blue sky overhead and occasional farm trucks going by a tractor now and then. A lot of those farmers are worried about harvest. And in a month or so, we should know just how much of a loss Minnesota farmers will take this year.

Some crops have been hampered or halted by floods, and cold weather, and disease. And thousands of farmers are expected to receive some form of federal aid. But how good are those federal programs? And why are there so many of them? And is the money going where it's needed? Leif Enger of Mainstreet Radio reports.

LEIF ENGER: Berdeen Lawrenson is taking a break from the field standing by his machine shed, filling the tank of his John Deere tractor before heading back out. Half of Lawrenson's 160 acres in Rock County in far southwestern Minnesota are planted in corn. And the corn doesn't look bad, green, and tall, and tasseled, but at this late date, he says, the crop has no chance to mature. So this morning Lawrenson hooked up his disk to do something he's never done before, work an unharvested crop back into the earth.

BERDEEN LAWRENSON: It is very hard. You got all your expense and everything in it. And I'm sure that we wouldn't have got enough to put in a crop next year without doing it.

LEIF ENGER: Lawrenson is one of several hundred Rock County farmers enrolled in what's called the 092 program, which allows them to destroy an immature or diseased part of their crop and receive a partial subsidy for it. This year, it's one of the three most counted-on farm programs in the Upper Midwest.

The other two are federal disaster aid from the emergency $3-plus billion measure passed by Congress and the Federal Crop Insurance Program. With so many dollars available, it would seem there must be enough to go around. Minnesota Farm Bureau chief administrator, Gerald Hagaman, says that's not so.

GERALD HAGAMAN: I think if there's anything that's been overplayed, it's the idea that somebody's standing out there, handing farmers money.

LEIF ENGER: Hagaman is one voice in an ongoing argument over how the government distributes farm aid. Federal crop insurance is purchased by fewer than half the state's farmers. The other half gambles on a good crop or hopes Congress will approve disaster aid in a year like this one. As for 092, the rules and deadlines for the program have undergone almost daily changes since late summer. Hagaman says the most reliable of the three crop insurance isn't an effective enough program to be attractive to many farmers.

GERALD HAGAMAN: I've talked to people that say they barely got their premium back because of adjustments based on the degree of damage and all that sort of thing. So there has to be some pretty definitive ways to ensure that a person isn't just going to get his premium back. He needs more than that.


LEIF ENGER: On the farm of Albert and Debbie Van Belle in Central Rock County, a herd of clean, pink feeder pigs scurries from corner to corner in a small, white-painted barn. The Van Belle's farm 800 acres of corn, and soybeans, and alfalfa. This year, they've got good fields and bad and have plowed 50 acres of corn into 092. Albert says they've never bought crop insurance. Instead, they've done what most of their neighbors used to do, relying on a livestock operation to help make up the occasional losses in cash grain.

ALBERT VAN BELLE: That's the name of the game in farming. I think you've got to be a little bit diversified. I mean, the guy that's strictly crop farming and goes south all winter-- well, what do you expect? You got a-- you got to take the lumps with it.

LEIF ENGER: Van Belle says too many farmers expect to be rescued by the government, assuming wholesale disaster aid will materialize in a bad year. Even when that happens, he says, there's a price to pay. Many who have sought help at the county Agricultural Stabilization and Conservation office or ASCS have come away puzzled at which if any benefits they might receive.

ALBERT VAN BELLE: It's all guessing. You've got to guess at how many acres you're going to destroy, guess at what the price is going to be, guess at everything and then put them figures into the computer and come up with another guesstimate. And everybody that walks in is shrugging their shoulders. When they come back out, they're still shrugging their shoulders.

ROGER CARLSON: I know that over the years, we've lost contact with some farmers that get to a certain point and get frustrated and say it's not worth it.

LEIF ENGER: Roger Carlson is Rock County's ASCS director. He says having multiple programs, which must keep track of one another's payments to farmers, is inefficient and expensive.

ROGER CARLSON: I guess I would hope that somewhere down the road, that the administration would take a look at all the forms that we make these farmers sign, the paperwork, the rule changes and try to-- and try to simplify the programs.

LEIF ENGER: That call to simplify the programs to blend them into one has become a common theme in this year of cold, wet fields. But that sort of reform might itself be complicated and costly. Minnesota state economist Tom Stinson says even a terrible crop loss this fall will probably amount to less than 1% of the state's gross receipts. That's before any federal aid rolls in, measure that against the weight of the federal legislative process needed for sweeping change.

TOM STINSON: The problem is one of the Congress and the executive branch trying to tailor a program so that it fits every individual's needs and treats everyone as advantageously as possible. And when you do that, you end up with extraordinarily complicated programs.

LEIF ENGER: What's more likely are some smaller changes to the programs already in place. Farmers say they'd like crop insurance to cover a wider set of circumstances. Now, for example, there's no provision for policyholders whose fields were too wet to plant last spring. There's been talk of making crop insurance mandatory.

And so excusing Congress from having to draft emergency disaster aid bills-- that's an unpopular idea with farmers who don't like to be told what to do. But after a year like 1993, it won't be the last unpopular idea to see lengthy discussion in Washington. Leif Enger, Mainstreet Radio, Rock County.

CATHERINE WINTER: The final chapter of the agricultural year won't close until this winter when farmers sit down with lenders to find out if they can borrow enough money to plant a crop in 1994. Some farmers will go out of business, but efforts are underway to minimize that number. Bankers and farmers agree that lessons learned during the farm crunch of the 1980s will help many survive the credit crunch. Mark Steil prepared that story.

MARK STEIL: After the harvest, farmers all over the region will figure out their economic bottom line and with it, their chances of staying in agriculture another year. Trimont banker, Les Peterson, says those in the worst financial shape will have a difficult decision to make.

LES PETERSON: Most of the farmers, if they face that kind of a situation, that it's the first time in their life they have, and it wipes out a way of life, and that is a horribly tormenting thing to even think about for them and probably the biggest decision they'll ever make in their life.

MARK STEIL: Peterson advises farmers to begin honestly assessing their financial situation now. He says starting early increases options, one of which may keep a farmer in business.

LES PETERSON: They need to look at what their dollar and cents position is under each alternative. And if it looks like it's going to wipe them out, they need to look at what their alternatives are then, either for liquidation, or for refinancing, or doing something else. And the earlier they look at it, the better.

MARK STEIL: Peterson believes several hopeful factors will hold down the number of farmers forced out. Most important are millions of dollars in federal disaster payments. Also, land prices have held steady or even increased the past few years, providing farmers potential loan collateral.

Since the crisis of the '80s, farmers have become more conservative. Agricultural debt is down. Another positive factor is that farmers and bankers seem to get along better now than they did during the farm crisis. Delores Swoboda is with the farm advocacy group Groundswell.

DELORES SWOBODA: I can remember farmers that were so angry at the bankers for this and that and the other thing. And now farmers have learned the truth of the matter that most of these bankers are under the control of a larger chain of banks. Or if they're a privately owned bank, they've got those regulators that come in and set the rules. And the bankers hands are tied. There's nothing they can do about it.

MARK STEIL: Trimont banker Peterson agrees with that.

LES PETERSON: Somebody looks over our shoulder continuously. And they have teeth to enforce their positions now that they didn't have in the '80s.

MARK STEIL: Hundreds of banks and savings and loans were closed in the US during the '80s by federal and state regulators with taxpayers picking up the bill. Most of the closings were because banks made too many loans, which were not paid back. In response, new regulations were passed to make it more difficult for banks to give delinquent accounts extra time to pay.

That hits farmers especially hard since extra time is what they need most after a poor crop year. Federal and state bank examiners though have relaxed some regulations to give banks more options in dealing with troubled farmers. Jim Ulland is Minnesota's commerce commissioner.

JIM ULLAND: We are trying to provide as much flexibility as we can to the banks so they can work with the farm borrowers and arrive at creative, innovative, acceptable ways to structure and restructure loans so that there's a minimum amount of failure on farm borrowers.

MARK STEIL: That's good news for farmers like Dan Potter, who has worked his Redwood County land more than 40 years. He says producers hit with two or three straight years of below normal crops will need help to stay in business. He says some farmers problems go back further than that. They're still recovering from the '80s farm crisis.

DAN POTTER: I feel that the last 10 years in my lifetime has been the roughest of any time. And I'm speaking from starting with nothing and raising a family. And I just feel that the last 10 years has been the most frustrating and the hardest there has. I've seen a lot of young people trying to get started, and it's just not working for them.

MARK STEIL: Trimont banker Les Peterson believes while many farmers face a struggle, there will not be a repeat of the '80s crisis when thousands went out of business because programs used then to help farmers are still in place.

LES PETERSON: The mediation law's still there the Farm Credit System and the Farmers Home Administration also have forbearance programs that are still in place from the 1980s. So that there's a stronger set of rules out here now for lenders and borrowers to deal with or to work with that pretty well lay out the parameters for any dealing with any credit problems.

MARK STEIL: Another tool farmers are using is the state's Farm Advocate Program. Started about 10 years ago, the advocates provide counseling for farmers in financial trouble. This is Mark Steil, Mainstreet Radio.

CATHERINE WINTER: You're listening to a live Mainstreet Radio broadcast coming to you from the town of Lamberton in southwest Minnesota, where we have our broadcast table set up in front of the Meadowland's Farmers Coop, a grain elevator that's the source of the roar you hear. It's a gorgeous sunny day, but we're talking about rain and flooding and the effect of the wet weather on farming.

In a few minutes, we'll take questions from our listeners who can call in, and we'll also take questions from the audience that's gathered here to listen to the program. Joining us now is Steven Taff, an ag economist from the University of Minnesota. He joins us from our studios in Saint Paul via satellite.

Steven Taff, you've said before that some farmers are going to do poorly this year, but others are going to do well, perhaps even better than they would have had there not been such bad weather because of the disaster relief programs. Is the government providing too much money in those programs? Or are there problems with the way those are structured? Or what do you think is the problem?

STEVEN TAFF: Well, as Tom Stinson mentioned earlier, the problem is when we try to run a program from Washington and deal with the enormous diversity that's in our farm population. Even within Minnesota, we've got farmers that raise livestock, that raise grains, that raise specialty crops, that raise llamas or whatever.

And we have to write programs that deal with all those folks. It's not surprising when we try to deal with averages that some folks will end up getting more and some folks are getting less than they need. I think that's going to be inevitably the case this year because it always is. Nothing new about that.

CATHERINE WINTER: So there wouldn't be really a way to restructure those programs to try to get the money where it's needed.

STEVEN TAFF: Oh, I don't think we're that smart. We always say what we really need is a comprehensive policy that's going to just help everybody out just the way they need it. We're trying to do that with health care right now. And the costs of being smart bear a cost as well. We need a whole lot of information that's very difficult to obtain.

And we need a whole lot of time in order to get money exactly where we might want to take it. I don't think anybody in Washington is that smart, and I don't think anybody in Lamberton is that smart. So consequently, we just have to deal with the fact that programs are set up to deal with the average person, and there's no such thing as the average person.

CATHERINE WINTER: I'd like to ask you what you think will be the broader impact of this year's wet weather on the state's economy. How serious a problem will it be?

STEVEN TAFF: I agree with Tom Stinson. We won't be able to see the effect of most of the crop losses this year on the state's economy as a whole. We have to remember that we're talking about a crop loss of-- I saw an estimate on yesterday of maybe a billion dollars. Our state's economy is well nigh up to $200 billion, $180 billion, or something like that. This is a very, very small piece of the state's economy fortunately because we don't want to be subject to large adverse effects in any one industry.

But that doesn't mean that the effects on any locality like a town like Lamberton, or Worthington, or the southwest part of the state-- the effects will be more in that area than they will as a state as a whole. But even there, we have to remember that most people who live in rural Minnesota are not farmers, and a great many of them make money off of economic activities that are not related to farming.

CATHERINE WINTER: Do you think we, in the media, are overstating the problem? Are we hyping this? And is it as bad as everybody says it is?

STEVEN TAFF: I think we're very enamored of the strong visual images of crop failure and flooding. And I think we get a little overexcited about something like the corn crop, the size of the corn crop. It's a human failing, I guess.

We like to keep score. And so we look at things like the corn crop and act as if that tells us anything about how people are doing. I would argue that it doesn't. I'm much more interested in how individual farmers are doing and individual businesspeople, and that varies all over the place. The size of the corn crop, which we focus on, tells us nothing.

MARK STEIL: Let's bring the rest of our panelists in on this discussion. Now joining us at the broadcast table here in Lamberton are Lou Anne Kling, state director of the Farmers Home Administration, Wally Sparby, executive director of the Agriculture Stabilization and Conservation Service in Minnesota, and Sandy Ludeman, a farmer from nearby in the Tracy area, who is also a past chairman of the United Soybean Board.

Lou Anne Kling, I'd like to ask you if you think that the problem has been hyped. Or are things really tough out here in the countryside?

LOU ANNE KLING: No, I don't believe the problem has been hyped. I've dealt with farmers in financial crisis for the past 10 years or more. And there's been problems in agriculture for many years. And because of the economics of what's happening in agriculture, nobody has been able to build hardly any equity at all in their operations. And so when we go through a disaster like this, it becomes a real disaster.

MARK STEIL: Wally Sparby, your agency has direct responsibility for administering many other disasters programs. Do you think the aid is getting to the right people?

WALLY SPARBY: Well, we hope so. The programs have been designed to take care of folks in need when we have a disaster situation like this, and we certainly hope that we are doing that. We do have 82 county offices throughout the state of Minnesota that work directly with the farmers. And that's the intent of the programs, and that's the intent of the staff within the offices to do that.

MARK STEIL: In this kind of a year when there is so much devastation and so many problems, so many farmers coming in to fill out forms and sign up for this disaster program or that disaster program. Do you worry or do you have some watch regulations in effect to watch out for fraud or to watch out for things that aren't going exactly right?

WALLY SPARBY: Yes, we do. I think we have one of the best staffs probably in the Department of Agriculture. I'm not saying that there's any bad employees there. Don't get me wrong, but they work hard, and they're very dedicated. I think they're very knowledgeable about the farming industry.

But the programs themselves sometimes are confusing, and it's difficult to deal with them. It's hard for us to keep up the speed with some of the changes that come along. And certainly, we're going to have some problems here and there, but I think they're very minimal. And we try to deal with them as quickly as we can.

MARK STEIL: What sorts of problems might you find?

WALLY SPARBY: Well, we've always had some problems with someone attempting to abuse the system. That goes way back probably to the beginning of the programs. I used to be a county executive director in ASCS back in the '70s-- in the '60s and the '70s. And we had it then, and we'll have it now. We'll always have that. It's nothing different than any other program that you have, but we've got a great mechanism out there I think that can handle those kinds of situations in a very efficient manner.

CATHERINE WINTER: Sandy Ludeman, you've been a director in your county too of the local ASC. Would you agree?

SANDY LUDEMAN: Yeah, I agree. I think there are certainly abuses, but they are very minimal. Unfortunately, with any type of a program, you have individuals that seek to work their way around the edges. But as Mr. Sparby said, they are far by a minimum. And it's no different than anyone else with their own individual income taxes or anything else. There are those that try to expedite and explore the system more than they should.

CATHERINE WINTER: I was thinking that when I talked to you a week or two ago, you were talking about possibly plowing under one of your fields. Did you end up having to do that or take advantage of any of these relief programs?

SANDY LUDEMAN: We decided in the last days not to. Our particular operation-- we had flexed a number of our wheat acres into the corn program. And so we would have had to destroy a substantial number of corn acres to even get to where we would have received some disaster or payment under the 092. We're going to go ahead and try and harvest our crop and see what we end up with. And then maybe if we qualify for the regular disaster provision, apply at that time.

MARK STEIL: Wally, there is still a long way to go until the harvest is over until this farm year is over. Are there federal programs in place if there should be a freeze, say, next week and farmers lose more of what they expected to harvest?

WALLY SPARBY: Yeah, the disaster program itself will kick in in that situation. We have a lot of farmers that have enrolled in 092. We had 11% of the corn in Minnesota that was enrolled in 092. And we had 8% of the wheat and a smaller portion of the barley.

But if the frost comes, and they lose their crop, and they lose the whole corn crop as an example, they'd end up with approximately the same amount of dollars in that regular disaster program as they would if they were enrolled in the 092. However, if they harvest part of that crop out there, and they get some bushels out of that, then it would be reduced accordingly. But yes, they will be helped.

CATHERINE WINTER: What do you think is going to be the impact of that loss on the small towns in this area? I'm not sure which of you should respond to that.

WALLY SPARBY: Well, Catherine, I think that every one of these towns are going to feel the effect of what's happened this summer. It's a very abnormal situation. And it doesn't matter if you're up on the Canadian border in the town of Hallock or if you're down here in Lamberton, Minnesota. We're going to see some effects on that in all of the people that work with ag-related businesses.

CATHERINE WINTER: Steven Taff, what's your response to that? Do you think that there are going to be towns in this area that just dry up and blow away? Or is the problem perhaps not that serious?

STEVEN TAFF: There will be-- ahem, excuse me. There will be towns that dry up and blow away, but not directly because of this particular weather year. That's been the pattern that we've had in the western part of the state and continuing on west from there. Since the turn of the century, most of our counties in that area peaked in population around 1910.

So yeah, we'll continue to have some small towns that will continue to experience difficulties. This particular crop year will only exacerbate that problem. There will be an effect. And certain towns that rely more so on farming output than some larger communities will be hit worse.

We have to remember, though, we're talking about corn, and wheat, and a few other crops. When we're talking about these federal disaster programs, farmers who aren't part of the subsidized commodity programs, which are primarily corn and wheat, little barley, and oats farmers who are not participating-- those are not eligible for some of the-- some of the financial payments that we've been talking about here earlier.

Those farmers, livestock farmers, people who feed their grains and so forth, or people who grow crops other than the favored few are going to be affected perhaps worse than our farmers who are participating in these programs and who will receive some of the disaster payments. Again, I stress the diversity of our farm population. Even within a small area, we have a wide range of types of farmers, some of whom will be quite severely affected and some of whom will not.

CATHERINE WINTER: Would any of our other panelists like to respond to that point?

SANDY LUDEMAN: I think there are some specific industries that certainly will show the impact of much more of this type of disaster, the trucking and shipping industry, those specific ag-related industries that do rely on a certain volume of input flowing through their facilities, and so on.

And so yes, there are locales that will be affected. But even within those locales, there are more specific individuals and related industries that-- farm input businesses farmers might decide to delay maintenance and those types of things this year.

STEVEN TAFF: If I may follow on that just briefly, I think that was Sandy--

CATHERINE WINTER: Steven Taff, go ahead.

STEVEN TAFF: Sandy talking. He's absolutely right. The folks who will bear the brunt of the economic downturn here are those who are not going to be covered by federal disaster payments. And a lot of those folks are like truckers, folks who do custom harvesting, folks at the elevators.

We tend not to pay any attention to those folks because they don't have the visual signs like a drowned-out cornfield or stunted soybeans. And so we tend to forget that those folks are there. And they're significant parts of rural economies, but we don't have direct disaster programs for them in a lot of cases.

CATHERINE WINTER: Well, let's turn now to our listeners for some of their questions on these issues. Mainstreet Radio reporter Rachel Reabe has been talking with some members of the audience here in Lamberton. So let's begin by taking some questions or comments from people here if they have any. Rachel?

RACHEL REABE: Catherine, we have a couple of dozen people that are watching this broadcast now right off Lamberton's Main Street. Frederick Uni is here. He farms between New Ulm and Sleepy Eye. Tell us a little bit about your summer, sir.

FREDERICK UNI: Well, it's been devastating. As Dennis Youngerberg, one of the earlier panelists, said, we've been dealing with adverse weather conditions from before planting, in fact. And the situation has deteriorated. Since then, we've had almost 3 inches of rain in the last week, which is going to add a lot of problems to what's already going to be a late harvest.

The crops in Brown County, the county I'm from-- we have estimated between $34 and $40 million in crop losses. Some of those dollars, of course, may be recovered through ASCS disaster programs and Federal Crop Insurance Programs.

RACHEL REABE: Is it adequate? Or if you were designing it, would it look altogether different?

FREDERICK UNI: That's a tough question. There are certainly facets of current policy that I think could stand some streamlining and overhauling. There are some real concerns with the Federal Crop Insurance Program as it exists today.

If you aren't able to plant a crop at all-- and believe me, all farmers do their very best to get that crop in the ground. And if you're not able to plant that, there is zero coverage for that. If you're planting is delayed beyond certain predetermined dates, your coverage then decreases progressively as late-- the later you plant, and your premium stays the same.

So that's an ongoing concern among farmers is federal crop insurance, ASCS. And that's been addressed. There are some policies, some programs that are somewhat cumbersome. But believe me, staff and personnel do the very best to do to deal with that and to thoroughly explain to local farmers and producers the options that are available to them.

RACHEL REABE: Some people have said that the disaster aid is a worse disaster than the disaster.

FREDERICK UNI: Well, I guess I can't concur with that. No doubt there are a few people that have that feeling. I have said often during this summer-- and we've had previous disasters that, in my opinion, the real disaster within the disaster is the fact that we, as farmers, as a group in southern Minnesota, basically throughout the nation, are not realizing sufficient income to establish that nest egg to withstand these types of crises. If we were able to bank some income, we could stand these down years and maybe not be so dependent on outside assistance.

RACHEL REABE: Thank you.

CATHERINE WINTER: Apparently, we have some listeners on the line with questions for our panelists. Let's go to the first caller. Go ahead. What's your question, please?

SPEAKER 1: I have two questions. One, I'd like you to address the issue of the statement that farmers are probably the biggest welfare recipients as far as receiving tax dollars. And the second one is when people buy farms that have been soil banked and have no intentions of farming, why has that continued under the Soil Bank provision? Thank you.

CATHERINE WINTER: Steven Taff, can you respond to those perhaps?

STEVEN TAFF: Well, I can try. We often hear the word welfare associated with a lot of the farm programs. Of course, that's not the official word. The official word in the language is deficiency payments, or price supports, or operating loans, and so forth. Many folks equate that to welfare. Farm groups are quick to respond saying that's the price we pay in the society for keeping a diverse group of farmers who can respond when we need the food.

That's a political kind of a judgment as to what we call it. But it is very much the case that a great many of our farmers who grow what I call the favored few crops, corn, soybeans, and-- excuse me, not soybeans but corn and wheat in particular in this area. Those folks rely heavily on government payments, and government payments do come from taxpayers.

With respect to Soil Bank, I think the caller may be referring to programs which pay farmers not to farm land at all for a period of time. The current version of that we have is called the Conservation Reserve Program. And those contracts are set for 10 years. We pay farmers not to farm land that is supposed to be erosive.

And we give them a certain amount of money in exchange for that. Those contracts, when they expire, will be gone whoever happens to own that land. It doesn't matter what the intent of the farmer or the current landowner is. It just matters what the contract says, which is a contract between the landowner and the federal government.

CATHERINE WINTER: Both Lou Anne Kling and Wally Sparby would like to respond. Let's start with Ms. Kling.

LOU ANNE KLING: Yes. When you talk about welfare for farmers, actually, it's the other way around. It's welfare for consumers because of the cheap food policy we have in this country.


We have to try to help farmers stay on the land and survive, so they can continue to grow that cheap food. So it really raises my collar when I hear someone call it welfare for farmers because it's welfare for consumers.

CATHERINE WINTER: Our farmers getting rich, Lou Anne Kling?

LOU ANNE KLING: Farmers are not getting rich. Farmers are going out of business every day. And every person in this country ought to be very aware of that because as we lose the independent family farmers, we're going to lose our independent grocery stores, and banks, and schools, and churches. And as we lose that, the large corporate or whoever farming will take over. And when they have control of the food, let me tell you, we will not have cheap food policy in this country.

CATHERINE WINTER: And, Wally Sparby, you wanted to add something.

WALLY SPARBY: Well, just a little bit. First of all, I have to concur with Lou Anne Kling certainly that the farmers are not in a situation where they're making a lot of money. They're trying to etch a living out of what they have out there and the soil. And I think they're doing a good job of that as efficiently as anybody in the world. But the person that goes to the grocery store in the United States of America buys their food cheaper than anybody else in the world. And we got to remember that.

And the reason for that is because we're working in this system as a team. That means the taxpayers of the United States of America and the farmers and the environmentalists and everybody are in this game all together. And the reason being is that we want cheap food. We want to be able to buy other things with those dollars instead of spend $14 for a steak like they might in Tokyo, Japan.

The second question in regard to the Soil Bank, the Soil Bank Program was put together as a supply management program, but secondly, to take care of highly erodible soils. And we have a lot of soils that are susceptible to erosion.

And one of the major programs that's come along to take care of a lot of this is the Soil Bank Program as what we call the Conservation Reserve Program today that we've had the Cropland Adjustment Program. We've had the Soil Bank in the past, and now we have the Cropland Reserve Program.

But these are programs that are all very effective in that area. And the environmental group seems to think that this is one of the more important programs than it is. And so we have that element to deal with, that we're trying to find some kind of a balance here. And not only that. It provides a great opportunity for the wildlife and the habitat out there for the many species of wildlife and birds that so many of us like to hunt and have in our country.

MARK STEIL: We're at the Meadowland Farmers Coop in Lamberton just off Main Street on a nice autumn day. To our right, we have some grain silos and people unloading grain there and some other activity going on from time to time here. Perched atop the concrete silo about 100 feet up in the air, I can see a nice star that must light up about Christmastime, I would assume. We have people in the audience here, and we'll be hearing from some of them. But we have also people phoning in questions, and we'd like to take your call. Go ahead.

CATHERINE WINTER: Go ahead with your question, please.

SPEAKER 2: OK. All right, my question is for Mr. Sparby. And I'm wondering why a farmer's disaster payment would be reduced when he has federal crop insurance. I'm concerned because it seems that we're trying to subsidize the crop insurance program and encourage people to carry crop insurance, but then when the disaster strikes, we penalize them for having the crop insurance.

WALLY SPARBY: Can you explain that a little further? And what way is it reduced?

SPEAKER 2: Well, I understand there's some maximum payments for the disaster program that a person can only receive so many dollars. Even though he has paid the premium for crop insurance, if the indemnity he would receive from that crop insurance would be-- he would still get, but it would be his disaster payment at the ASCS office would be cut off to a maximum point.

WALLY SPARBY: Yeah, that's correct. The maximum payment there is the target price-- is your yield times that target price. And when you're maxed out on that together with the federal crop insurance is the maximum amount of payment that's allowed. And that's a law that's put into place by Congress and one that we have to administer.

SPEAKER 2: It just seems like it's penalizing the farmers who carry the crop insurance. And they may be better off not carrying it and just taking the disaster the government provides.

WALLY SPARBY: Well, in most cases, that wouldn't be true. It varies-- the crop insurance cover varies by the yield that you have on the farm. I've talked to some farmers up in northwest Minnesota. As an example, there are wheat growers. And if they have a yield that's, like, 30 bushels, their premium probably is $5 an acre as an example.

And their return on that investment is probably somewhere in the neighborhood of $18 to $20 versus the neighbor down the road that may have a 45 to 50 bushel proven yield. And his premium is probably similar, but his return on his investment is considerably higher.

CATHERINE WINTER: Let's go back now to Rachel Reabe, who's taking questions from members of our audience.

RACHEL REABE: Jean Erlebach is in our audience. He farms outside of Lamberton. When the panelists said that this is not going to have much of an effect on the state's economy, you took umbrage to that.

JEAN ERLEBACH: Yes. I guess I'd have to say no matter how you look at this, the overall impact of the economy from the loss of the farm dollars is going to be catastrophe, not small catastrophe to say the least because a few dollars of profit in all these farmers would be staying in business.

But the way the thing is right now, no matter how you figure this whole income situation coming off of the disaster payments, and the 092, and all the different things that are out here, you still can't cover the original cost of the inputs of that crop. And so whoever thinks the farmers are getting a handout, it's not a handout. You better feel sorry for him because you're going to pay for it in food down the road.

RACHEL REABE: You're involved in Groundswell. And you have strong positions-- your organization does on what's happened this summer and the aid that's been offered.

JEAN ERLEBACH: Yes. As an advocate organization, our number one mission is to save family farms. And we've been advocates of that since we began. And we will do everything possible to try and save these farms because we know what's happening out here in the rural areas.

CATHERINE WINTER: I think we have some more callers on the line. At the moment, apparently, we don't have any more callers on the line with questions. If anyone in the audience has a question they'd like to ask, please just raise your hand, and Rachel will come over and find you. So if there are questions you'd like to put to members of the panel or to Steven Taff, who is in Saint Paul, please feel free to do that. Steven Taff, would you like to respond to what was just said?

STEVEN TAFF: Well, I agree with the speaker that individual farmers will be hurt. There's absolutely no denying that. And some communities will be affected. But I will stand by my statement that the effect of this on the state's economy as a whole will be very, very minor. We like to think that farming drives the economy, but that's simply not the case. The state of Minnesota is blessed with a really diverse, vibrant economy. We're not as vibrant as we used to be, but we hope we get back there again.

Farming is very critical. Farming is an important piece of it, but farming does not drive our economy. And farming demise in Minnesota would not bankrupt Minnesota tomorrow. It would bankrupt individuals. It would decimate communities. But that's not going to happen either. What we've seen over the past 50 years is fewer and fewer farmers farming more and more land.

The real question is though, if farming has such strong incentives for big people to get involved in corporate farms, why are our farms still so small in Minnesota? Relatively speaking, we have very small farms in Minnesota. Obviously, there is not an enormous incentive to get much larger. And what we ought to be focusing on then are the folks who remain in farming, and that's still 60,000 to 80,000 folks.

CATHERINE WINTER: Lou Anne Kling, you wanted to respond to that.

LOU ANNE KLING: Well, he wonders why farms have stayed small in Minnesota. It's because we've been a state that's cared about agriculture, cared about our land, and cared about our rural areas and keeping it viable. We have had a legislature that has passed laws to protect and keep family farms.

But as all of this keeps eroding because of the economy, a lot of that is going to be washing away. There's less and less people to help protect it. And you're taking them out one by one. And it's a silent march out of the rural areas.

CATHERINE WINTER: Sandy Ludeman, do you have any feelings on that subject?

SANDY LUDEMAN: Well, the economic pressures that farmers face each day, depending on what particular commodities they produce, certainly varies. Now, this is going to be a disaster for some individual farmers that are particularly probably just crop farmers, but some livestock farmers probably will have certainly a reduced level of income.

But probably the impacts won't be nearly as great on them as some others. And that goes back to-- our farmers welfare recipients have to understand that farmers do give up-- those that wish to participate in that program do give up some of their acreage and so on to be able to participate in those programs.

Unfortunately, those programs aren't available to every farmer. Some of the livestock producers don't have any ability to participate in some of those programs. And so even though we try to turn those economic tides that are moving us to more and more consolidation, global economy keeps us, unfortunately, addressing that every day.

MARK STEIL: Minnesota Public Radio's Mainstreet Radio is supported by a major grant from the Grand Rapids-based Blandin Foundation, working in partnership with rural Minnesota groups to strengthen communities.


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