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Rural El Paso, Ill., bumps steadily along the road to recovery

By Staff writer of The Christian Science Monitor / February 17, 1984



El Paso, Ill.

The mood here on Front Street is upbeat. Suzanne Wagner opened up a clothing store the other day - her third in this small central-Illinois community. Down the street, Velda Faulk is selling more furniture.

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''Anything would have been better than (1982),'' she says, looking past the sofas and lamps to the window outside.

It is a reflection repeated on Front Streets and Main Streets all across rural America. The economic horizon has begun to clear - in part because of a brighter national economy; in part because of an improved farm economy in 1983.

But here in El Paso - and in other communities where grain elevators dominate the skyline - the view is not as simple as all that.

''It's a little hard to figure,'' admits ''Wink'' Schairer, senior vice-president of the Woodford County Bank. It is the only bank in town and is heavily dependent on its farming customers.

On one hand, last summer's drought was a boon. It boosted prices for corn and soybeans, which helped push up farmers' net income. Unfortunately, the same drought that boosted prices also slashed the amount of crops farmers had to sell - sometimes severely.

Most were cushioned by the government's payment-in-kind (PIK) program, which handed back surplus grains to farmers who agreed to curtail production. Those farmers who didn't, however, were more vulnerable to drought. Hardest hit were those who had borrowed heavily to get into farming and had counted on a big crop to help pay off their loans.

On the farm itself, the impact of 1983 has been uneven.

Nationally, the number of farmers forced out of business for financial reasons declined slightly in fiscal 1983 and the first quarter of fiscal '84, according to the Farmers Home Administration. Foreclosures on Federal Land Bank loans, which primarily provide long-term credit to well-established farmers, increased more than 50 percent from the end of '82 to the end of '83. But this reflected less than 0.5 percent of all Federal Land Bank loans.

In El Paso itself, there were no farm foreclosures last year, says Mr. Schairer.

In fact, young Wayne Furrow had nearly a record year - ''mostly because of PIK,'' he says, standing in the El Paso Grain Company elevator. He has since bought a new tractor and field cultivator for roughly $60,000.

New farm equipment is out of the question for Jay Partner. Last year was only average, he says, partly because only about a quarter of his corn crop went into PIK. Most of the landowners from whom he rents were too suspicious of government programs to allow PIK participation on their fields.

Drought hit hard too. Instead of his average 130-140 bushels of corn per acre , Mr. Partner's best yield last year was 99 bushels; his worst, 47.

Off the farm, the local scene is just as spotty.

Marty Rebbec had his best year ever in 1983. His General Motors dealership sold a record number of cars and trucks, he says. Much of the business came from established farmers who did well last year.

However, business was down for El Paso's agriculture-related companies.

The local grain elevator, run by Mr. Furrow's father, had so little grain to store this past year that about a quarter of the 40 employees had to be laid off. Dick Page, manager of the local Shell Chemical Company plant, had to lay off 30 percent of his work force.

Overall, farmers were planting fewer acres and had less need for agricultural chemicals or seed corn. While the local Pfister Hybrid Corn Company did not have massive layoffs, business there was slashed 30 percent.

''I never realized the government was such a large competitor,'' sighs vice-president Dan Pfister, about the PIK program.

The outlook for 1984?

Well, probably not as good as 1983, economists say. But if El Paso is any indication, there is optimism.

Mrs. Faulk is looking for another good year in furniture. Mr. Rebbec is not discouraged that his car and truck sales went down last month. Mr. Partner, who also drives a truck parttime, hopes his farm will produce more revenue this year. And the Pfister company has hired its second PhD researcher.

Caution still reigns, though, making Roy Zimmerman's job just a little easier. More people are buying life and health insurance, he says, sitting in his insurance agency across the street from VFW Post 6026. ''They're more willing to talk now.''