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Farmers produce more, but get less

By Laurent Belsie and Howard LaFranchiStaff writers of The Christian Science Monitor / April 25, 1986

Hartley, Iowa

LOOKING up from his morning chores, Dan Ruf can see his old farm. ``I was glad to leave it behind -- it would never support a family right now,'' he says. The Rufs are staying afloat with relatives' help and food stamps. They are increasingly confident they can make it here in northwest Iowa by starting a small dairy farm.

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``Makes you kind of wonder,'' though, Mr. Ruf says. ``We had a farm that was plugging in about $225,000 of business within a community, and now it's . . . taken that $225,000 out.''

The agricultural depression has not only hurt farmers. In Iowa, perhaps the hardest-hit state, a third of the state's farm-machinery dealers have closed since 1979. Also gone: a tenth of its hardware stores, nearly a fifth of its auto dealerships, and more than a quarter of its men's clothing stores.

The contraction, part of the general upheaval in rural America, has hit small towns the hardest. In Hartley, population 1,700, the John Deere machinery dealer closed last year, and Howard Borchard sells fewer TV sets at Hartley Electric. But he's optimistic: ``I would think we're pretty stable from here on out.''

The farm economy is crucial to the rural United States, because, of all the natural-resource industries, it affects the most people.

In Texas alone, which up to now has avoided the dire conditions of the Midwest, more than 10,000 of the state's 185,000 farmers are expected to quit their fields this year. That is in line with nationwide forecasts of 5 to 10 percent farm failures.

The situation is especially dire in the cotton-growing regions of the Texas panhandle, where state officials estimate that 1 in 6 farmers could go out of business this year.

``I've never seen things this bad -- or this dry -- and I'm an old-timer,'' says Virgil Allison, who sells used farm equipment in Brownfield, Texas. ``I'm fixin' to retire at the end of the year, and I wouldn't be surprised if I don't make one sale between now and then.''

Although farmers from Georgia to Oregon are feeling the pinch, the main focus of concern is the nation's midsection, the Corn Belt and Great Plains, which contains nearly half of the nation's farm-dominant counties. And although only 8.5 percent of rural people work directly in agriculture, rural businesses and governments are increasingly hard hit.

``It was as if suddenly someone had flipped a switch,'' recalls Norm Starr, owner of a clothing store in Hartington, Neb. After plunging $25,000 into remodeling the store in 1979, sales dropped 20 percent that year and never recovered. The Starrs, who live above their store, have yet to find a buyer or renter.

The slump is pinching local governments, too. In a 13-county region of northeast Nebraska, which includes Hartington, the tax base eroded 22 percent in inflation-adjusted dollars between 1981 and 1985. Further erosion may be in store, since the value of farmland in the area has dropped 31 percent, according to a US Senate study.

Hartington's public school superintendent, Don Flakus, is worried. When he moved to Hartington in the mid-1970s, only two homes were up for sale. Today there are 30, he says, and as population and school enrollment have dwindled, Mr. Flakus has had to reduce staff by 20 percent. ``The next cuts that we make will be total programs,'' he says.

State governments may be able to provide some help, but they too are feeling the effects of the farm depression.

``I'm seeing it in my revenue picture that seems to get worse every day,'' says Montana Gov. Ted Schwinden, who has already cut state programs 2 percent across the board and expects a further 5 percent reduction this year. ``We can get through the sort of cuts that we're talking about. [But] if we go beyond that, then I think we begin to eliminate programs.''