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Banks Profit While Our Farmers Fail
When banks call in farm loans at the first opportunity, it destroys families, 
communities, and regional economies.

by Lisa Griffith Monday, June 14, 2010 by OtherWords
http://www.commondreams.org/view/2010/06/14-4

Bruce Drinkman is a successful organic dairy farmer who milks 50 cows with 
his wife, Mari, near Glenwood City, Wisconsin.

Despite his 34 years of experience, the two-year drop in milk prices and four 
years of drought have meant no profits or savings. Last fall they were denied 
credit from their bank to purchase seeds to plant 55 acres in grains and corn 
this spring. To continue farming they cashed in Mari's retirement account but 
the farm was placed into foreclosure around Christmas. After repeated 
attempts to refinance the farm with other banks, farm credit services and 
Farm Service Agency (a division of the U.S. Department of Agriculture, or 
USDA) they were turned down by all, and did not even attempt to obtain bank 
credit this spring. Fortunately Bruce was able to obtain credit from a vendor 
to buy seed, and at the end of April he and Mari filed reorganization 
bankruptcy, the only means they knew to preserve their farm, home and 
livelihood.

A recent survey by the Federal Reserve Bank of Chicago indicated that 11 
percent of Wisconsin farmers with existing lines of credit may not have 
credit extended next year; this is especially significant because of the a 56 
percent decline in net farm income in 2009. Dairy farmers have received 
prices far below their costs of production for nearly two years. With eroding 
equity, many are in immediate danger of losing their farms.

Farmland is so valuable that local (but often not locally owned) banks call 
in farm loans at the first opportunity, destroying families, communities, and 
regional economies. Farms entering foreclosure are listed publicly, further 
devastating owners while notifying speculators and investors of chances to 
take advantage of distraught landowners.

Something is askew. As the number of unemployed nationwide remains around 10 
percent and the USDA holds summits on revitalizing rural America, why are 
experienced, efficient farmers receiving ridiculously low prices for their 
products, forcing family members to seek scarce off-farm jobs to support 
them? Why are banks and USDA denying them access to credit to continue their 
operations? Are these institutions conspiring to close farming operations in 
order to give investors the opportunity to purchase their land for a fraction 
of its worth?

A posting on Farmland Forecast, read by farmers, agribusinesses, investors 
and speculators interested in agricultural land, stated that "Midwestern U.S. 
farmland provides investors the best opportunity...Farmland may be [cheaper] 
in other regions of the world, but...may not have the same soil quality, 
transportation infrastructure, or government that supports property rights." 
When an elderly couple with no heirs interested in or able to afford the farm 
decides to sell; when a younger farmer sells after incurring too much debt 
from low prices and rising input costs, there's probably a corporate investor 
ready to buy. The land may be flipped to developers when enough profit can be 
made or planted in commodity crops (such as soybeans and corn) used primarily 
for livestock feed or ethanol production.

Sadly, many people who would like to engage in farming remain landless but 
are forced to rent or accept tenuous land use arrangements with no guaranteed 
long-term security. Speculators and investors only make matters worse by 
driving the price of farmland out of their reach, making less land available 
for the profitable production of fresh, local, and sustainable produce, eggs, 
milk, grains, and meat.

It appears that the people who depend on their land for survival and provide 
us with food--farmers, ranchers, fishers and laborers--are more expendable 
than people sitting behind a desk trading stocks, land, and communities' 
futures. The solution to this situation is two-fold. First, restructure the 
pricing system to be fair and just for people producing or harvesting our 
food. Second, require banks that received Troubled Asset Relief Funds (TARP) 
to supply credit to and work with small businesses (including farms) in their 
communities. Demand this from your government. Otherwise, when farmers are 
forced off their land because they can't profit from their labor or access 
credit for annual inputs, who will provide us the wonderful bounty of 
summer--watermelon, sweet corn, BLTs, and strawberries with whipped cream?

Lisa Griffith is membership coordinator of the National Family Farm 
Coalition, where she also works on local food issues. www.nffc.net.