Group Warns Congress of Credit Crisis for Farmers
WASHINGTON — Representatives from the nation’s agricultural heartland warned Congress on Wednesday that there is “a gathering rural storm†over the crisis in farm financing that threatens upheaval in America’s food production and banking systems.
“This disaster is of truly astounding proportions,†said Bishop Maurice Dingman of the Des Moines, Iowa, Roman Catholic diocese and a founder of the state’s Farm Unity Coalition.
“Equally astounding is our federal officials who are unaware of, or do not care about, the gathering rural storm,†said Dingman, who was among about a dozen spokesmen for farmers, banks and rural groups speaking at an informal hearing on the farm credit crisis.
The message, brought to Congress for the first time since it convened this month, was that farmers saddled by heavy debt are increasingly unable to pay it off because of declining values of their land and crops. The trend threatens to snowball, the witnesses said, wiping out thousands of mid-size “family farms,†transferring food production into the control of large corporations and sweeping away rural banks and businesses.
The statistics are stark: Economists say about one-fourth of the nation’s farmers holding half of its farm debt are in moderate to severe financial stress.
The failure rate among agricultural banks is climbing. And losses in the Farm Credit System, which holds the largest proportion of farm debt, are requiring emergency transfusions of cash in some regions.
The informal meeting was arranged by Sen. John Melcher (D-Mont.) after Senate Agriculture Committee Chairman Jesse Helms (R-N.C.) declined to allow the session to be called under the auspices of his panel.
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