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Farmers stagger under burden of high interest, low prices

By Lucia MouatStaff correspodent of The Christian Science Monitor / April 14, 1980

Fort Dodge, Iowa

"I can't sleep nights wondering whether the bills are going to come in too fast," says Mike Nielsen, a grain farmer from nearby Mapleton. In all his years of farming he cannot recall a time when production costs and the interest rate on borrowed money have been so high and commodity prices so universally low. To pay his more pressing bills, he plans by year's end to sell much of the corn crop he had intended to use as feed for his cattle and hogs.

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Even at that the says his creditors will have to be extra patientd: "People and just going to have to wait in line longer for their money, or it's going to force farmers to sell out or take bankruptcy. . . . We just don't have any cash flow."

As spring planting season approaches and that cash flow problem intensifies, Mr. Nielsen and thousands of other farmers in Iowa and neighboring Midwestern states are pleading their case before almost anyone who will listen -- form state departments of agriculture to President Carter.

Most grain farmers blame the January embargo on grain shipments to the Soviet Union for many of their current money troubles. "It was the catalyst that really brought down the whole house of cards," says one. Most feel that help promised from Washington, and badly needed, did not come fully or fast enough.

Many farmers here in northwest Iowa, where the recent collapse of two regional railroads had added substantially to grain transportation costs, argue that their cash price for grain is lower than any place else in the country and that they are feeling the money pinch more than most.

Iowa Agriculture Secretary Robert Lounsberry estimates that s many as 20 percent of the state's farmers are in a "crisis" situation. In a letter to President Carter last month he described them as "hurting so badly" for credit that they are cutting back on seed and fertilizer purchases and dropping leases on rented land. "It may be the last farming year for these farmers," he says.

"We've been getting at least a dozen calls from farmers every day," says an aide in the Washington office of Congressman Berkley Bedell (D) who represents northwest Iowa on Capitol Hill. "They're all telling us there's no way they can make it with 20 percent interest on operating loans and that they're losing money on everything they do. . . They're almost past the point of being upset -- they use words like 'panic' and 'depression.'

"Farmers just feel they're bearing the brunt of everything these days," agrees Larry Clark, executive director of the Webster County office of the Agriculture Stablization and Conservation Service, which also receives a hefty share of daily complaints. "Most farmers wouldn't be complaining a bit if they could just get a reasonbale price on their commodities."

For added insulation for their own funds, some creditors are insisting on cash in advance. "No way am I sending out any seed this spring unless the money comes in here first," says one Iowa grain elevator operator. Some rural banks, short on money and catering only to regular customers these days, have urged farmers to use their loans for living expenses rather than planting the spring crop.