While most urban gardeners can do their spring planting without a bank loan, not so with most farmers.
Until recently, many farmers streaming into federal loan offices came out with little more than long faces. Saddled with high debts from several years of bad weather, poor crops, and high expenses, these farmers were being told they couldn't qualify for yet another loan. The possibility of mass foreclosures was raised.
Now the Farmers Home Administration (FmHA), the lender of last resort to most farmers, is helping farmers by not pressing for repayment of old loans until income improves.
Some members of Congress want US Secretary of Agriculture John R. Block to be more generous with loans and more lenient on collection of payments. But the American Farm Bureau Federation (AFBF) is satisfied that the US government is being fair with the nation's debt-burdened farmers.
Some 2,600 of the nation's approximately 2 million farmers face immediate foreclosure by the FmHA, according to assistant secretary of agriculture Frank Naylor. That's about 1 percent of the farmers with outstanding FmHA loans.
Not foreclosing may just be a matter of ''prolonging the agony'' of financial decline, says Mike Durando, AFBF assistant legislative director. In some cases poor management leads to forced selling of farms, he says.
Many farmers rely on long-term loans to purchase land. But farmers also borrow money to pay the expense of each year's crop preparation and to bail them out when crops fail or commodity prices drop sharply. Credit is a way of life for most farmers. In good times old loans are paid off as new ones are taken out.
But the past several years have been tough ones for many farmers. Drought has seared some states, including those in the Southeast and Texas. In parts of Georgia, farmers have suffered drought losses the last four of five years. Farm exports have fallen well below levels widely thought possible just a few years ago, leading to overproduction in some cases, says AFBF economist Ross Korves. Low commodity prices and high expenses have sent net farm income plunging to the lowest point since the 1930s, he says.
But, he adds, this is partially offset by the fact that there are far fewer farmers now than in the '30s to divide up that net income. And, he says, many farm families have been earning more money off the farm than from their farms the last two years.
The financial crunch on farmers is far from over. Delinquency rates on FmHA farm loans are running higher than at any time in at least three decades, says Allan Brock, an assistant administrator of FmHA. But in most cases, rather than foreclose, ''we're using all the authority we've got to the utmost,'' he says, to ''stick with'' farmers.
In February, the FmHA instructed its loan offices to defer payments on deliquent loans when farmers show the ability to pay back new loans, says an FmHA spokesman. And poor market conditions now are being accepted in addition to bad weather as a legitimate factor in considering loans and repayments, he adds.