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MARK STEIL: MPR's Mainstreet Radio coverage of rural issues is supported by the Blandin Foundation, committed to strengthening communities through grant making, leadership training, and convening.

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Good morning. I'm Mark Steil, and welcome to this special Mainstreet Radio edition of Midday. We're in Thief River Falls in Northwest Minnesota, talking to you from the community room at city hall. This building is really a landmark in this city. It's a beautifully renovated railroad depot.

And in fact, we've had trains rumbling by this morning. You might hear that or maybe a train whistle as we go through this show. Today, we're going to be talking about farming. In our first hour, we'll be discussing the state of the agricultural economy and its impact on towns and cities. Then at noon, we'll look inward at the mental health issues raised by the stress of farming.

In Northwest Minnesota the past few years, farmers have suffered through crop disease, low prices, and floods. These calamities have driven many out of business. The financial woes of farmers mean serious trouble for the small towns built around the farm economy. Many have been in economic decline for decades, kept alive mainly by the money farmers spend and the taxes they pay.

Now, as many small town leaders watch the farm economy crumble around them, they're wondering how they'll survive. Minnesota Public Radio's Dan Gunderson visited the Northwest Minnesota town of Argyle.

DAN GUNDERSON: Like many small towns along Minnesota's Western edge, Argyle has outlasted the reason for its existence. Argyle is here because James J Hill built a railroad from St. Paul to Winnipeg. Steam engines needed regular stops to refuel, so towns sprang up every 10 or 15 miles.

Farmers from the surrounding area came to town to sell what they produced and buy what they needed. The ubiquitous grain elevators still tower over Mainstreet, but trains only stop here now when there's grain to be hauled to market. And it's only a 40-minute drive to shop at Walmart or Target in Grand Forks.

Today, the cafe is the biggest draw as farmers stop for coffee or lunch. About 600 people live in well-kept homes on a quiet tree-lined streets that end abruptly in farm fields. The population has been falling steadily for years, and now, the lifeblood of the community is ebbing away. 30% of area farmers have gone out of business in the last three years, a trend that shows no signs of slowing.

GLEN RIVARD: I'd like to keep a very optimistic feeling about our community, but I'm scared. I'm very concerned.

DAN GUNDERSON: Glen Rivard is mayor of Argyle and helps run a family-owned seed and feed business.

GLEN RIVARD: And one of the big concerns we have is, how do you attract business that is not Ag related or AG related as far as that goes, that requires numbers when you don't have people living here? How do you bring these people back out here?

SPEAKER 1: 40, 50, 65, 67.

SPEAKER 2: Thanks, Kristen.

SPEAKER 1: You have a good day.

DAN GUNDERSON: At the Argyle State Bank, the same question troubles Jim Feller. Feller has been watching his loan portfolio steadily shrink for several years. He says it's unlikely Argyle will ever be what it once was.

JIM FELLER: Once you've lost that Mainstreet business, you're not going to get them back. Those bulk dealers that you've lost, you're not going to get them back. The equipment businesses that you lose, you're not going to get it back. The fertilizer or chemical supplier that you lose, they're not going to come back.

DAN GUNDERSON: Feller says for small towns like Argyle, the future may depend on finding small manufacturing companies that can employ 30 or 40 people. But he says in the present economic environment, that's difficult.

JIM FELLER: We go out, and we find a business that possibly is interested. They come and look at it. They see it's based solely or mainly on farming, agriculture business. They're hesitant to come in here because of that. Unstable prices, unstable crops, it's hard to get anybody to come in right now.

DAN GUNDERSON: Every business in Argyle is dependent to some degree on agriculture. Even the cafe survives only because of the patronage of farmers. But Jim Feller says most farmers in this area have less money to spend now than at any time in the last 50 years. The economic news is starting to tighten around what remains of Mainstreet. Darryl Marcel is one of the survivors.

DARRYL MARCEL: To give you an example, within a 20-mile radius here, 15 years ago, there used to be five lumber yards. And now, we're the only one.

DAN GUNDERSON: Marcel has operated Argyle home supply for 23 years. He says five years ago, much of his business was farm equipment storage sheds and grain bins. This year, most of his business will be home construction in communities miles away from Argyle. Marcel says he's stayed in business by working harder for the same income.

DARRYL MARCEL: We're going twice as far as we used to to captivate the same audience, is what it amounts to. Our population is shrinking. And we still need a certain amount of business, walk-in trade plus specialty business, and we just have to go out to get it.

DAN GUNDERSON: Marcel hopes this year farmers will get a good crop and a decent price, but he says farmers are more cautious than he's ever seen. Argyle mayor Glen Rivard worries the caution is becoming pessimism. He says a lot of very successful farmers are talking about not rolling the dice again, simply walking away before they lose everything.

He says Argyle won't survive without farmers on the land, and he wonders who will farm in the future. Rivard says his fears were reinforced when he recently spoke to a group attending an event in Argyle.

GLEN RIVARD: And I asked them, I said, how many in here have come from the farm? And three people out of approximately 60 raised their hand. And then I said, how many of you have ancestry that came from a farm? And just about all of them raised their hand. So we're losing it. We're losing that connection to the countryside that we used to have.

DAN GUNDERSON: The railroad built Argyle and countless other small towns. The question now is, are family farmers and the small towns they sustain destined to the same fate as the steam locomotive? Dan Gunderson, Minnesota Public Radio, Moorhead.

MARK STEIL: Joining us here in Thief River Falls are a couple of people who've seen the upheaval in the farm economy firsthand. Bob Bergland lives on a farm near Roseau. He's currently the University of Minnesota regent and is also on the board of directors for the Agricultural Utilization and Research Institute.

Before that, you might remember that he was President Jimmy Carter's agriculture secretary. Also, was elected to four terms in Congress and also served as head of the National Rural Electric Cooperative Association. Also with us is Howard Person, based here in Thief River Falls as Pennington County Agricultural extension agent. Good morning, Bob, and good morning, Howard.

BOB BERGLAND: Good morning.

HOWARD PERSON: Good morning.

MARK STEIL: We'd also like to have you take part in this program. Phone in your questions and comments to 1-800-537-5252. That's 1-800-537-5252. We're in Thief River Falls at the city hall. And Dan in his story talked about the impact of the railroads. We're right on the railroad tracks here, right next to them in a renovated depot.

And outside the building here is an old Soo Line steam locomotive. So it really brings home the impact that railroads have had in this area. Here in Thief River Falls, the impact of the struggling farm economy may not be immediately apparent. A couple of major employers here are Digi-Key and Arctic Cat, and they're firm underpinnings for the local economy.

But if you talk to construction companies in town, they'll tell you that farmers have cut back sharply on building products and building projects. Car and truck dealers say it's a rare day when a farmer walks through their showroom anymore. And farm machinery dealers in town are concentrating on selling used equipment because almost no one can afford a new tractor, which runs many tens of thousands of dollars. In fact, we'll be talking to a local machinery dealer a little bit later in this hour about what he's seeing.

Howard PERSON, I'd like to ask-- start with you. It must be a little unsettling to watch farmers struggle and know that those ripples of economic uncertainty tend to spread to other parts of the economy, other towns.

HOWARD PERSON: Well, it is. Thief River Falls is a trade hub. And we depend not only on the farmers within Pennington county, but the farmers in a 100-mile radius to come here and shop for everything. And as the farm economy worsens, so does our retail business, so does the things that keep Thief River Falls and Pennington County rolling.

MARK STEIL: Bob Bergland, you've been a participant both locally and globally, really in the farm economy. This week, US Agriculture Secretary Dan Glickman made a statement that I think is as far as he's ever gone in describing the situation in rural America, he's warning that there could be a social catastrophe this year as thousands of farmers are forced out of business by low prices. Is that an overstatement?

BOB BERGLAND: No, I think he's been listening to the bankers. Farm bankers have all told me that the matter is really going to get worse unless there is dramatic improvement. Bank loans are made generally on cash flow. And there hasn't been a positive cash flow statement on a grain farm or on a pig farm for a long time.

There will be a large number of people that won't get bank loans this spring because the cash can't flow. They don't have equity. And these are, for the most part, the younger, highly motivated, well-trained, well-prepared, and willing farming families who don't have the equity built up with time. They're the most vulnerable.

And there may be our best farmers, but they're also financially the weakest. The next wave will come next fall. And this is what the bankers are telling me, that if there isn't a positive cash flow this year, it'll be Katie, bar the door. Next fall and winter, it's just going to be going to be a terrible, terrible scene.

MARK STEIL: If Congress were to do something yet before spring planting, what is the single most important step, most helpful step that they could take?

BOB BERGLAND: Well, I think in the very short term, it would to be sure that there's enough credit guarantees through the Farm Service Agency so that these highly trained, well-equipped, young families can get a line of credit to put their crop in for this year. Many of these-- many hundreds, maybe thousands in the state, simply won't get the credit to put in the crop because they don't have the equity, and the cash flow statements are going to be negative.

They're going to show-- it's going to show they're going to lose money. If the Farm Service Agency doesn't come in with a guarantee on that loan, the banks can't make it. It's not that the banks won't. It's simply they can't. The banking regulations are very tough on this stuff.

MARK STEIL: That they can't support-- loan money to someone who on paper shows a loss already for the year.

BOB BERGLAND: That's right. Not only lose money in the business, but have no money on which to live.

MARK STEIL: Howard, you're the agricultural agent here in Pennington County. What sorts of things have been going on as far as crop disease, low prices that farmers here have been struggling with over the past few years?

HOWARD PERSON: Well, what really struck us was scab. And some have said that's an environmental red flag that came up-- changes that occurred in the past 20 years with government programs, with tighter cropping, with reduced tillage types of things. Scab hit us in '93. That was the first time in my lifetime that I've ever seen large acreages of wheat and barley just lit a match to and burned off.

And that's continued to plague us. Scab contents in the barley has made-- malting barley out of the valley here virtually nonexistent, which was the premium. We're going to hardly grow any barley this year because feed it $1.10, you just can't even consider it.

Wheat, the same way. It's cut our yields dramatically. It's cut the quality and consequently the price of our wheat. And you can't make ends meet. So it's taken-- since '93 the scab issue in Northwest Minnesota and the Dakotas for that matter, has really taken any cushion we had away from the farmer.

MARK STEIL: We're talking about agriculture and its impact on rural America during this hour of Midday. If you have a question or comment, call us at 1-800-537-5252. We'd also like to invite you to visit the Mainstreet Radio website. Go to www.mpr.org and click on Mainstreet. You can hear Mainstreet Radio reports as well as hear this program live on the internet.

If you missed any part of the program, you can hear it at any time on the Mainstreet website. That address again, www.mpr.org and then click on Mainstreet. And our phone number for your listener comments or questions, again, 1-800-537-5252. With us here in Thief River Falls are Howard Person who's the Pennington County extension director and also Bob Bergland, who was Secretary of Agriculture under Jimmy Carter, among other things that he's done in his life.

Bob, a lot of farmers are, as you said, struggling right now. And we've gone through this before. And I think sometimes people think that the situation is always critical for farmers. But this is really with the low prices is maybe as bad as it's been since the mid-'80s. Would you agree with that? How does this compare with the farm crisis of the '80s?

BOB BERGLAND: Well, I think there's a fundamental difference. Many of the people that I knew in trouble in the '80s could explain why they were in this bind. They bought too much land, paid too much money, or their debt expanded faster than their income prospects, and they just got closed out.

That's not true now. These people are folks that have been very cautious, very careful in their purchases and aren't in-- it isn't because of something they've done. It's circumstances totally beyond their control that's doing them in.

MARK STEIL: We have a caller on the line now, Donna from Moorhead. Good morning.

AUDIENCE: Good morning. Well, I certainly appreciate Mr. Bergland's comments that the people in a tough situation now, it is beyond their control. But he mentioned extending credit even though there's a negative cash flow. And the problem is even making credit available, this continued negative cash flow is going to take down all the farmers. And what does Mr. Bergland see as the consequence of greater consolidation and probably in time, corporate farming replacing the smaller farmers?

MARK STEIL: Bob.

BOB BERGLAND: It's an unmitigated disaster. Every place in the world that has gone to large-scale corporate farming has failed. Every single place, it's failed. And it isn't going to work here either. And anybody who thinks that we can-- we're going to get out of this mess by having more consolidation is simply dreaming.

MARK STEIL: And we're told that the small towns and cities in this region depend on farmers or have traditionally in the past. And when one large farm is made out of many smaller large farms, I mean, you lose the buying power of all those families who were on the smaller farms. And that big corporate farm may not buy locally. It may buy supplies from somewhere else.

BOB BERGLAND: Well, I think that's true. I grew up on a family farm at Roseville. Mom and dad had 240 acres of land. They grew chickens and pigs and turkeys and beef cattle and milk cows and a garden and feed and hay. It was a highly resourceful, flexible family enterprise.

This is in the '30s. There were 7 million farms like that. They could adapt to changing circumstances quite easily. Well, that's all changed. Now, farms are rigid. They can't adapt to changing times. They're big. They have huge debts required by circumstances. The so-called modernization has compelled them to take on enormous debt in order to mechanize to do it the way it's recommended.

The result is that instead of having a dozen enterprises on a typical farm, you may have two, maybe corn and soybeans, or it could be feeding pigs, or it could be-- here comes our train. Or it could be-- like up in this part of the world, it's corn. I'm sorry, it's canola and wheat and one or two other crops, but their eggs are all in one basket.

And instead of being domestic markets, like when I was a kid, now, it's an international marketplace. And the markets fail for reasons that no one can anticipate and nothing they can do about it. Farming has become a very, very rigid business, and because it can't adapt, it will break.

MARK STEIL: Howard, could you give us an idea here in Pennington County how many farms are there and how many farms were there, I don't know, sometime in the past 5, 10 years?

HOWARD PERSON: When I came here in 1985, there were 720 active farms in Pennington County. Today, there is about-- well, I'd have to get in a specific number, but it's right around 480, 450 right in there. So it's been a pretty dramatic drop. To give you a more specific example, in 1985, we had 120 dairy farms. Today, we have 30 left.

When I started, I could fill a room with hog producers. We used to do hog meetings, and we'd pack the place. I have one hog farmer left in Pennington County.

MARK STEIL: Let's go to the phone lines again. I believe we have Dave from Anoka with a question.

AUDIENCE: Yes, why is it that there seem to be some farmers who are doing really, really well? And isn't this a matter of the small farmer that isn't good business wise isn't making it? And if the farms are going south, why aren't I paying $8 for a loaf of bread?

MARK STEIL: Let's divide that up. Howard, first of all, do large farmers in Northwest Minnesota tend to be OK right now, and it's the smaller ones who are hurt or is everyone hurting?

HOWARD PERSON: Well, the large-- farms have had to get larger. The middle-sized farm has gone away because they've either gotten smaller and the farmer has gone to town to work, or they've gotten much larger because they have to cover many more acres or they have to raise more head per acre or more production in order to make things go. The problem we're seeing right now or what we're realizing right now is we are eliminating the open market.

We've vertically integrated poultry. That's been that way for some time. You have a handful of companies that control poultry. Hogs are headed there quickly. Dairy isn't too far behind. Potatoes are pretty well there. I'm told barley is getting there now if you're looking at malting barley types of things.

And so what happens is if you can go on the open market for the average farmer who's unloading at the local elevator-- and you buy it for under cost because he's trying to grow more acres. He's trying to do it for less per bushel. And you can do that now because those farmers are still there.

When that farmer is gone, those companies will still need that product. Whether it's grown in the US or whether it's purchased from Canada or from some other country, it isn't going to make any difference. We'll import it. We'll do something, but then you'll pay the price because they need a certain volume. And when there isn't any other available locally, they'll pay what they have to get it, and the consumer will pay the price.

Right now, we're realizing a real benefit to consumers because we're clearing out the little guy, and that open market is going away. And so companies are buying products at below cost of production.

BOB BERGLAND: Let me answer part of that question. Can I?

MARK STEIL: Go on.

BOB BERGLAND: The business of some people doing well, that's true there are. I'm 70 years old, and our farm is paid for. Can't hurt us any. There are lots of my age that are over the hill that have the land paid for. And we might get bent out of shape, but we're not going to go broke.

The gentleman talked about $8 a pound for bread. He's paying $0.08 to the wheat growers for each pound of bread he buys. And that's the problem.

MARK STEIL: Let's take another caller. James is on the line from St. Paul.

AUDIENCE: Hi.

MARK STEIL: Good morning, James.

AUDIENCE: Good morning. I guess what my question is, why isn't the farming industry handled like any other industry? If you cannot compete, why keep doing it, I guess?

MARK STEIL: Bob Bergland, former US agriculture secretary, that comes up quite a bit. The Mainstreet hardware store sees sales go down. And there's probably not going to be a government help for him to help him stay in business.

BOB BERGLAND: Well, that's true. I just saw recently where John Deere is closing down or has closed down some of major manufacturing of farm equipment because farm sales are poor. John Deere just closes the plant. The layoff the help. They shut the thing down. Maybe they'll reopen. Maybe they won't.

When the local hardware store goes out of business, they close the doors. They shut down the hardware business. It may be converted to a clothing store. It may stand empty. When a farm operator goes broke, the farm is still there. It doesn't go away. It isn't like that hardware store. It doesn't go away. It stays there, and somebody else will try to make it go.

And therein lies the problem. The size of the farming factory doesn't shrink simply because of hard times. That land is always there, and it's always farmed.

MARK STEIL: Does it make sense to help out to try to keep the person-- that family there or let business take its course? And if they have to sell out, they sell out, and somebody else comes in and farms it.

BOB BERGLAND: Well, we've been through that, too. We saw that kind of shakedown back in the Great Depression years. And that's not a very happy solution. No, I think the farming situation is so unique, so different, that can't even be compared to--

MARK STEIL: What are some of those in industry-- what are some of those unique factors in farming?

BOB BERGLAND: Well, first place, when the farmer plants the seed in the spring, he or she has no idea what the situation will be like come fall. No notion. They have no idea. They didn't know that the Soviet Union was going to break apart. They were $11 billion buyer of farm products.

They didn't know that the Asian banks were going to collapse and a big chunk of our exports went away. They didn't know that oil prices were going to drop, and Mexico had to stop buying wheat and other crops. They had no way of knowing because they don't in the spring whether it's going to rain or be dry or whether they'll have a crop or whether the disease will get it. It's a high-risk enterprise that lots of people wouldn't take on.

MARK STEIL: You're listening to a special Mainstreet Radio Midday broadcast. We're in Thief River Falls this morning, and we'll be back in just a moment. But first, we'll take time to look at the latest news and weather from the MPR newsroom.

ANNOUNCER: If you're a Minnesota Public Radio member, this is your chance to reserve seats for the spring run of A Prairie Home Companion before they go on sale to the general public. This week only, you can call Ticketmaster special Prairie Home line at 612-673-0404 You can also stop by the Fitzgerald Theater box office and get your tickets in person. Make your reservations and use your member discount before Saturday. Then sit back and enjoy all the great guests and music on A Prairie Home Companion.

JOHN RABE: It's 11:30 with news from Minnesota Public Radio, I'm John Rabe. Good morning. US military officials say US warplanes today attacked military targets in southern Iraq's no-fly zone after they were fired on by Iraqi anti-aircraft guns. Details were not immediately released on the exchange, the latest in dozens involving US and British warplanes and Iraqi air defenses in northern and southern no-fly zones in that country since mid-December.

Secretary of State Madeleine Albright told Congress today there is zero chance, her words, that Kosovo's peace accord can succeed without US troops. Peace talks recessed yesterday until March 15 after Western mediators extracted only partial agreement between warring Serbs and Ethnic Albanians on a political framework for separatist-minded Kosovo. All 61 people on board a domestic airliner that went down today in southeast China are dead. The state-run news agency says the China Southwest Airlines flight plunged into a field and exploded near a city about 800 miles southeast of Beijing.

St. Paul School board members say they want to showcase their superintendent finalist for the public next week. The board plans a reception and interview Monday with Patricia Harvey, the lone candidate for the job vacated last year by Kerman Gaines. The St. Paul School board plans to vote whether to offer the job to Harvey following a 90-minute public interview Monday night.

Public Safety Commissioner Charlie Weaver says it's like lemmings to the sea. He's talking about a crackdown on out-of-state vehicle registrations, which has driven hundreds of Minnesota motorists to register their cars with the state. We've got cloudy skies and 29 degrees in the Twin Cities. This afternoon, partly sunny, a few flurries, and a high of 35.

Across the state today, snow ending across the northeast late this morning. And across the south, by this afternoon, up to 3 inches will have fallen. Partial clearing then in the central and south this afternoon. Highs in the 30s. That's news and weather. I'm John Rabe.

MARK STEIL: MPR's Mainstreet Radio coverage of rural issues is supported by the Blandin Foundation, committed to strengthening communities through grant making, leadership training, and convening. You're listening to a special Mainstreet Radio Midday from Thief River Falls. Good morning. I'm Mark Steil.

The topic today is agriculture and how the downturn in farming is affecting everyone in this region, from farmers to the towns and cities which depend on those farmers. Coming up at noon and our second hour, we'll talk about the stress and mental health issues produced by tough times on the farm. Our guests this hour as we talk about the impact of farm economic problems are former US Agriculture Secretary Bob Bergland, who lives in farms near Roseau here in Northwest Minnesota, and Howard Person, the Pennington County Agricultural extension agent.

One thing that you often hear in rural areas is that when farmers hurt, everyone hurts. Businesses in town are among the first to feel the impact. Minnesota Public Radio's Dan Gunderson is at a farm machinery dealer here in Thief River Falls. Dan.

DAN GUNDERSON: Thanks, Mark. I'm at the Anderson Power & Equipment, which is located on the west side of Thief River Falls. And I'm with Cecil Anderson, who's the owner, and he's owned this business since 1972. He's got about $2.5 million worth of equipment sitting on lots around the building here, 14 acres of equipment.

And that's about three square city blocks of farm equipment. And he's kind of wondering who's going to be buying that equipment. Cecil, what have you seen as a result of the continual decline in farm income?

CECIL ANDERSON: Well, there's been quite a little apprehension over the last couple of years as things start to slide down and down and down. And there's commodity prices that everybody's aware of what's happened to them based on a number of different reasons. Where's this farm equipment thing going? Well, everybody's-- farmers are by nature conservative, and they're ultra now.

I guess we're still looking [INAUDIBLE] and we cover quite a large area to be able to move this type of equipment. But it's going to test us. There's no question about it.

DAN GUNDERSON: Are farmers buying new equipment? Are they trying to just patch together their old equipment and keep it going? And what are most farmers doing?

CECIL ANDERSON: There are some new being sold, a lot of repairs. The thing is, right now, they're trying to finish their taxes, but they're also trying to decide what they're going to see for next year. So when they get through that, then they'll start making some decisions if they've got to modify for the different types or go to some different type of equipment for the year.

DAN GUNDERSON: Now, there's no real upturn in farm commodity prices on the horizon. And this spring and summer could be another tough one for farmers. What do you see as the longer-term outlook the next two or three years for your business and other AG-related businesses?

CECIL ANDERSON: Well, we've been basically in a mature business for quite a while. So if you're going to do it, you have to fight to basically take it from somebody else. But going back a little bit more to farm commodity prices and things like that, you got to put it in perspective of what's really happened in these guys in the last couple of years.

If you're not with it every day, you don't want to say, well, wheat went down $0.03, $0,04, or $0.05, $0.10 or beans went down $0.10, what's it really mean? If you look back, a couple of years ago or so, basically most of the commodity prices have been cut in half. So most of us all look on our checks, we get paid every week or every two weeks, just take your take-home pay on that check and cut it in half and now try and live on it.

And that's basically what's happened to the farm community out here. Their take-home pay has been cut in half, and they're having a tough time living.

DAN GUNDERSON: You talk to farmers every day in your business here. What's the mood of the farmers? You mentioned that they're very cautious, but what's the mood as they look ahead?

CECIL ANDERSON: You deal with farmers every day, and they come in and talk back and forth. And the mood actually, they are a great bunch of people because what they're up against right now is far tougher than any of us realize. And still, they're able to put a bright side on that.

I just don't know of another group of people that can do that as well as they do. I mean, that's what they're showing out front. What happens when they shut the door in their own bedrooms at night, I don't know. You know what I mean? That's where the rubber meets the road, so to speak. And when they start talking with their spouses and things like that, who knows what's really going on?

DAN GUNDERSON: Mark, that's the outlook from one AG-related business here in Thief River Falls. Back to you.

MARK STEIL: All right, Dan, Thank you for that perspective on the farm situation. We're at the city hall here in Thief River Falls in a renovated railroad depot. In fact, we have a train going by right now just a few feet away from the broadcast booth here.

We're talking about the farm economy. And with us here in Thief River Falls are Howard Person, who's the Pennington County extension agent in Thief River Falls, and also Bob Bergland, who has worn many hats throughout his career, including the post of US agriculture secretary. But Bob, I wanted to ask you about one thing that you're involved with now, which relates to the economy.

You're on the board of directors of the Agricultural Utilization and Research Institute, a group which, as I understand, tries to find new uses for farm products and new markets for them. Tell me a little bit about that and what sorts of things might be on the horizon that may offer them some hope of selling their products in a new form.

BOB BERGLAND: Well, this is a state-funded agricultural research group collaborating with the University of Minnesota and other research facilities around looking for new crops and new products from crops, working on things like some new high-tech processing of alfalfa that's used as a food supplement. It's used in the medical field. It's used as a high-quality poultry feed in Japan. It's a whole new industry. And we think it has tremendous promise.

MARK STEIL: Is there some hope that that sort of thing might lead to a facility somewhere, say, in Northwest Minnesota, which would bring some jobs as well as give a market for the farmers?

BOB BERGLAND: Well, this is a statewide thing. Actually, it covers many states. It's a regional thing. Alfalfa is grown almost everywhere it rains. And the crop can be grown and sold without-- depending on any international subsidies. So you eliminate that risk. It's a very good rotational crop.

In the old days when every farm had cattle, almost every farm had alfalfa. It's a legume. It is good for the soil. It's good for a lot of things. But when we went to monoculture and went to just straight grain, we lost that. And that's part of the problem. If we can bring alfalfa back-- although we know we can't feed it all to dairy cattle, but if we can process this into industrial uses, we'll have a whole new industry.

MARK STEIL: If you have a question or comment, our phone number is 1-800-537-5252. Also, we invite you to visit the Mainstreet Radio website. Go to www.mpr.org and click on Mainstreet. Let's go to the phone lines again. Bill from Battle Lake is with us. Good morning, Bill.

AUDIENCE: Morning. My question was, again, with corporate farming. I didn't really get any real answers off the last caller. I guess I don't really understand why corporate farming wouldn't work. I mean, of course, big corporate farms are going to buy their equipment from somewhere else, but the plants are still going to run.

Elevators are still going to run. Land is still going to be farmed. It would be done by somebody else. I don't understand why corporate farming wouldn't work.

MARK STEIL: I guess the comment was that I don't think anybody doubts that you can farm corporately and grow the crops-- let's let this train pass by, that you can farm the crops and produce them adequately, but there's that underlying question of what it does, I guess, to the social structure. Bob Bergland, is there any doubt that farming corporately-- I mean, they are able to do that successfully.

BOB BERGLAND: Yeah, there's great doubt. There's a myth that the big farms are automatically better than the middle-sized farms. Not true. When I was at USDA, we did a study on the structure of agriculture to find out which was the most resourceful, most productive, and had the lowest cost of operation. And the family farms are still the best.

The big-scale farms don't have that advantage, and they'll bail out as quick as they can if they can't make money. We did a study in California of two communities, one had large farms, one had small farms. The large farm community was like a migrant labor camp. There was no town left.

The small farm community was strong, resourceful, and thriving. They had churches and schools and people and business and trade. You just go out there and take a look and decide for yourself which is best for the country.

MARK STEIL: Howard Person, you're the extension agent here in Pennington County. I wonder if you could give me an idea, how big are the farms getting now? I mean, as the number of farms decline in this county, certainly most of, if not all, the land that always has been under cultivation is still under cultivation. And what are the sizes of the farms now?

HOWARD PEARSON: Most of the land is still under cultivation, although given current price projections, I'm hearing a lot of folks saying they're not going to turn a wheel this spring. Especially the smaller folks who are working in town, the smaller farms, they're going to stop. And so we're at a point right now where land that has always been farmed is reaching a point where it's not going to be farmed.

MARK STEIL: What will they do with that land?

HOWARD PEARSON: It'll be idled. A lot of them are hoping that they'll get into the Conservation Reserve Program. Just this last sign up, we bid twice the acreage or attempted to bid twice the acreage into the CRP program than is allowed. And so there's a real push to find ways to have some income to idle that property.

And there's still some government program there. It's only about half of what it used to be, but there's a government payment, government subsidy payment. And if worse comes to worse, you leave it lay. You can still get the payment. It's enough to pay the taxes.

You aren't going to make any money off that land. But if the cash flow says you're going to go in the hole, you're probably in a mode of trying to lose as little money as you can rather than trying to make a buck off that land.

MARK STEIL: What are the sizes of some of these farms that their families are still trying to-- I mean, the labor must be enormous.

HOWARD PEARSON: As I mentioned earlier, the middle-sized farms are going away. And so you've got small size farms where both people are working in town, husband and wife are working in town. The large operations that are trying to survive strictly on agriculture, on a grain operation, you have to be at least 2,000 acres. And that's what's happened, is most of the farms that are really cropping and trying to make it full time farming are at least 2,000 acres, up to 5,000.

MARK STEIL: That's roughly-- I mean, if we talk in terms of square miles, which people may be able to relate to a little bit better, that's 3 square miles, 4 square miles, 5 square miles of farmland per farmer. I mean, there comes a point when a person who calls himself a family farmer can't get much bigger and still be able to do all that work.

HOWARD PEARSON: And that's what's happened. We get bigger and bigger equipment. We try to find part-time labor to help in the summertime when things are really wild. And then you lay them off or hopefully, you find older farmers who are semi-retired, and you can get a little help when you need it. That's become a real problem out in the valley in sugar beet harvest. You just can't find help.

MARK STEIL: Let's go back to the phone lines. Mary from Minneapolis has a question which relates to this land issue. Good morning, Mary.

AUDIENCE: Hi. When was the last farm crisis? How many years ago?

HOWARD PEARSON: The '80s were the last time we had serious problems, although it's very different than it is from now. In the '80s, it was a price situation. We had borrowed too much money. The bins were full, but prices were so low, we couldn't make ends meet.

AUDIENCE: OK, but my question really, I want to go forward to that in a little time I have. Did anybody keep records about if the young farmer is being forced out, and we certainly should protect him because he does produce the best food for the least amount of money? And I worry about corporate farms getting the stranglehold on seeds and markets, and then they can do whatever they wish with prices.

And I think Monsanto has been coming in for a lot of international scrutiny for some of its terrible things it's been doing. And I just wonder-- if I were king, I would say to the Pillsbury corporation, which receives $11 million a year for corporate welfare, why not give it to these young farmers? Wouldn't it be in all of our best long-term interests if we spent the money there, rather than giving Pillsbury that kind of money. And I guess it's the biggest handout of all to the corporations who are already rich. And I resent that.

MARK STEIL: Let's follow up on that. Bob Bergland, the question of young people getting into agriculture is a very important one. I mean, the average age of farmers now in the 50s probably, maybe even a little bit higher. Are young people able to start a farming operation in Northwest Minnesota, given the current economic situation?

BOB BERGLAND: Not anywhere, unless their folks can help them get started. Not a chance anywhere.

HOWARD PEARSON: That's something we've seen too, is in the last census of agriculture, we seen the shift point where we now have more farmers over 65 than we have farmers under 35. And the average age of farmers in Pennington County is-- I believe it's right around 57 or 58. So you just aren't seeing the young guys coming in.

MARK STEIL: Let's go back to the phone lines again. Richard from Minneapolis has a question. Good morning, Richard.

AUDIENCE: Good morning. Yes, I'm a strong advocate for price supports for farm products. And I think people have to vote for congressmen that are for price supports. I think it's the only way out. Every other country in the industrialized world supports the price of their farm products. So how are we going to compete with other countries when they're supporting the prices of their farm products for their farmers? Just please comment on that.

MARK STEIL: Let's dive into that. I mean, the issue that-- this comes up in-- the direction that this usually is raised is in the question of whether the Freedom To Farm Bill, which was passed in 1996, should remain as it is. The idea of that legislation was to end what might be called a price support system, which had been in effect since the Great Depression.

Bob Bergland, what's your opinion on the Freedom To Farm Bill? Is it the right course, or do some adjustments need to be made?

BOB BERGLAND: Well, changes need to be made. The part that deals with getting rid of the old acreage allotments and marketing quotas, which was a relic from the '30s, was a good one. I mean, it's a good thing to get rid of. There's no controversy on that. The controversy has to do with the price and income guarantees made under the price support loan program.

What the Freedom to Farm Bill basically did is turn the United States of America into the world's largest grain colony to be colonized and exploited any way it can. And that's exactly what's happening. It should come as no surprise.

MARK STEIL: Explain that, a grain colony.

BOB BERGLAND: Well, because we're the world's largest exporter, the importing countries know that if we have a big crop on hand, all they have to do is wait. Time is on their side. They just wait. And they know that sooner or later, these people are going to have to sell because they have nowhere else to go with the grain.

The gentleman's call raises a very interesting public policy point. The Congress lacks the political will to do what needs to be done. Everybody knows that we can cure this thing. This is not an act beyond our control. This requires a change in law to establish a price support loan rate that reflects about the variable cost of production.

In the grain business, people say, oh, no, you can't raise the price of grain. Exports will fall. My answer is if cheap prices will encourage exports, why aren't we selling record numbers, and we're not. Exports are down even though the prices are down. This garbage of trying to link the price support loan rate to declining exports is pure hogwash.

MARK STEIL: And that's an issue that gets back to this credit question that we talked about earlier. I mean, if there were a price support program, in effect, a farmer could take that to the banker, could he not? And say that, well, at worst, I'll get this much for my grain this year.

BOB BERGLAND: We'll sell as much corn overseas at $2.50 as we will at $1.50. Absolutely will. And the numbers show that. At a $2.50 loan program, the grower can take the statement to the bank and probably turn this into a positive cash flow.

MARK STEIL: You're listening to a special Mainstreet Radio Midday program. We're in Thief River Falls this morning. And Mark from the White Earth Reservation area is on the phone line with us. Good morning, Mark.

AUDIENCE: Good morning. Thank you for taking my call. I'm not a farmer. I have never been associated directly closely at all with a farm. But when I was growing up, what huge percentage of everything that I ate and nourished my body came from small local farms.

And that's maybe just a nostalgic point, but it kind of brings me to the idea of isn't this basically just a lot of what America is supposed to be about and always has been? And I'm wondering why some-- I guess the previous two callers have kind of broached the issue too, why isn't some form of government help becoming available? I'm rather uninformed on this, I admit, but we're getting property tax refunds.

These people are really in trouble. I went to church last Sunday and found out that one of my neighbors is going to be quitting farming. I have no idea what they are going to do. And they have three, four, or five kids. These are good people. And I'm on a fixed income, but if some small percentage of my fixed income could help out and somehow there was a program, be it take it away from somewhere-- we've bailed out so many other things. Can't we help these decent, good people in a booming economy?

MARK STEIL: Thank you for that comment, Mark. One thing that I've always found interesting is that when it comes to a time like this, when there are bad economic conditions on the farm, and the question comes of what can we do and should Congress do this or that, or can something else be done to help farmers, that sometimes somebody may do a poll or take some kind of a survey.

And even in the Twin Cities, in the metropolitan areas, people just like farmers, it seems, and will say things like that. If I have to contribute a little more money in taxes to keep people on the farm, I'm willing to do that. Howard, why do you think that is, this love affair with the American farmer?

HOWARD PEARSON: Well, I'm not sure exactly, other than I look at my own concerns about agriculture, and it would bother me if we had to become a net importer of food instead of a net exporter. We've played some games once in a while with using food to try and influence policy. It's never worked very well.

But I don't think I'd care to have some other country tell us what we're going to do in order to be able to import food if it reaches that point. I like to keep-- I kind look at farmers as an economic security or-- and certainly, they are for the rural areas. I mean, that's our base. But how many farmers do we really need? And once we've established that number, how are we going to maintain that?

In 1940, half the population in this country were directly related to production agriculture. Today, it's about 600,000 and dropping, and so 600,000 farms, 600,000 farmers, less than 2%, way less than 2%. So where do we draw that line and say, well, we need a certain number?

MARK STEIL: Bob Bergland, is there a larger question here about where will the nation's food be grown and how will it be grown and who will grow it, and what impact and thoughts does that have on, I guess, the stability of the nation?

BOB BERGLAND: Well, I hope it never comes to that. It doesn't need to. We can take care of ourselves and feed growing numbers in the world if we have the political will to do what needs to be done. I'd like to get back to the last caller's question, the comment really about him growing up with food that was healthy and tasteful-- tasty.

There's an exciting new development taking place in American agriculture. It's called organic farming in some places. It's called by other names in other places. But it all has to do with natural methods of growing. It's a growing part of the farming apparatus. It's not well understood.

Universities over the years have not paid much attention to this science, but now, they're getting into it. The University of Minnesota is getting into it big time to help these growers with their problems. And they found a niche in the marketplace. The niche is growing. And we'll all have a chance to enjoy food grown the natural way if we want to.

MARK STEIL: Let's take another caller here. We're coming to the end of the hour. Greg from Northfield is with us. Good morning, Greg.

AUDIENCE: Good morning. I live on a small family farm in Southern Minnesota that my brother and I raise 240 acres of corn and soybeans. I'm also a farm implement dealer and a long-time admirer of Bob Bergland. So I'm glad I finally got to visit with him.

I have two issues here. One is a comment. One of the earlier speakers made the comment about John Deere closing down some factories. That's not true. John Deere has not closed down any farm equipment factories. Lately, what they have done is adjusted production to meet the demand. And we think there's a quick little lesson there to be learned.

My question and my comments are about the cost of farmland, whether it's rented or purchased. There are so many items out there that the farmers do not have any control over, and we understand that. But they do have control over what they pay for purchased farmland and what they pay for rented land.

And during the tough times we see today and the tough times we saw in the '80s, we still saw very high-priced farmland change hands through purchasing. And we saw the bidding with neighboring farmers against each other for rented land continue to be very aggressive. Down in our area now, we're looking at $125 to $140 an acre for rented land. This puzzles me. I was wondering if Bob Bergland had any comments about this.

BOB BERGLAND: Well, this is a real conundrum. I don't understand how people can pay $125 an acre cash rent on land for corn that'll produce 150 bushels an acre and worth $1.50. I mean, that doesn't add at all, but I know it happens. I've seen it happen before.

In most of my experiences, these matters-- we've always known that farm profits tend to be capitalized land values. And the big boom back in the early '70s, when grain prices doubled, land prices doubled in 18 months, part of that came home to roost in the early '80s. The big collapse in the '80s had its roots in the early '70s when people misread the signals and paid too much money for farmland because corn was $4 a bushel and soybeans were $10. They thought it was going to last forever.

People just have to be much, much more careful about agreements reached on buying land or renting land. I just think that this is the last part of the market to adjust, but it's going to have to change.

MARK STEIL: Howard, what have you seen here in Pennington County as far as land prices, both-- or in the region, even prices paid for renting farmland? Are they going up or down or--

HOWARD PEARSON: They've been stable for several years, although the last two years now, they're starting to show declines. Cash rents are starting to fall. And I've talked to some farmers who have made dramatic reductions in what they're paying for cash rent. Told the landlord here it is, take it or leave it, as little as $10 acre in some cases, because that's the only way that cash flows.

We're starting to see some reductions in land values, in market values. I pulled some information off the fourth quarter report from the Ninth Judicial District Federal Reserve Bank. And they're noting a 2% decline in land values in Northwest Minnesota and parts of Montana.

And so things are starting to back down. And those things take time because you think, well, you have one or two bad years, but things will turn around. Well, now, it's not turning around. It's slipping. The other thing I picked up there on that website was prices paid versus prices received by farmers.

And since June of 1991, prices received have been at or below prices paid, except for three months in 1996. Otherwise, the farmer has been getting less and less, and his expenses have been going up and up and the squeeze is continual. And this puts more pressure for the farmer to expand to try to cover more acres to try to produce more, even though the margins are thinner because you keep having to cover more and more with less and less.

MARK STEIL: Let's see if we can get one more caller in. Dan from Mankato has a question. Good morning, Dan.

AUDIENCE: Yes, I actually-- hello. Hello.

MARK STEIL: Yes, yes, go ahead.

AUDIENCE: I've got two questions. One, I know the Republicans not long ago passed a Freedom to Farm Act, which I thought was supposed to be the panacea for all farming problems. But number 2 is that some of the things that concern me is that the rural areas seem many times very conservative politically. And they believe in this approach of a rugged individualist and want to take everyone else off the quote, "dole," so to speak.

But now, they're asking for help. And I guess what I'm asking is if we are to help each other, shouldn't we all be willing to help each other, those-- the down and outs and so on?

MARK STEIL: Bob Bergland, can you give us a quick response?

BOB BERGLAND: The answer is yes. Absolutely yes. Live and let live.

MARK STEIL: OK. You've been listening to a special Mainstreet Radio Midday from Thief River Falls, and that brings the first hour of the program to a close. We've been visiting with former US Agriculture Secretary Bob Bergland and also Pennington County Extension Agent Howard Person. Thanks to both of you for being with us this morning.

Coming up right after the news in our second hour, we'll talk about stress, depression and the farmer. That's coming up here on Minnesota Public Radio.

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