Farmers try to cut costs, find new markets

Six years ago Derral Schroder helped found the militant American Agriculture Movement (AAM), which made headlines by ''tractor-cading'' to Capitol Hill during the 1977-78 winter. At that time farm income was plunging.

Today Mr. Schroder is still in business, raising crops on 6,000 acres and cattle on another 33,000 acres in Colorado. But farm income is still dropping, and the AAM leader is more worried than ever as he sees farmers forced into selling off their land, equipment, and livestock in foreclosure auctions.

The Department of Agriculture's Farmers Home Administration, which currently provides 12 percent of all agricultural credit as the government's ''lender of last resort,'' saw 7,998 of its borrowers go out of business in 1982 through foreclosures, liquidations, and bankruptcies. This 3 percent attrition rate is up, officials say, over previous years. But how far up remains in doubt because the compiling of figures on farm bankruptcies only started last year.

Schroder's answer for his own farm? ''We just try to 'poor boy' our way through this, to raise whatever little we can without much expense.'' This increasingly common approach - using a minimum amount of fertilizer and pesticides and making do with equipment that should have been replaced years ago - ''is causing a complete collapse of small business around the country because farmers are not buying this year any more than over the last two years,'' Schroder says. He adds, ''When farmers don't buy, your towns dry up and when your towns dry up, your cities dry up.''

He expects that more and more small farmers will be forced to sell out as long as interest rates remain high and commodity prices low. But he and the AAM are fighting back.

One thing AAM is doing is attempting to break into the grain exporting business in an unusual way. The organization plans this week to sign agreements for shipping half a million bushels of wheat and milo (a yellow, soft grain also called sorghum) to Mexico in a barter deal for oil. ''The world,'' says Schroder , ''is wide open for exports if you can utilize what other countries have to offer.'' In the case of Mexico, he argues, ''this deal is going to be profitable for both sides because we have a surplus of grain and they have a surplus of oil.''

Kansas Farm Bureau president John Armstrong is another prominent farm leader concerned about foreclosures and the need to boost depressed farm incomes.

''We normally have about 1 percent of farmers leaving farming every year,'' Mr. Armstrong explains. ''For 1982, the projection is that this will be up to 3 percent and if things don't change, I expect the rate to be even higher for 1983 .''

Armstrong expects recovery to come if the Reagan administration succeeds with its payment-in-kind (PIK) program to reduce planted acreage in 1983 and its ''export PIK'' subsidies for farm products going overseas. Under the latter program, a certain amount of government-owned grain is thrown in as a bonus for importing countries. Armstrong insists that ''farmers and ranchers in general still support the idea of Reaganomics.''

US Secretary of Agriculture John Block agrees. He holds that the Reagan economic program has broad support among farmers and will benefit the farm sector.

Mr. Block cites figures showing that farm production expenses rose only 2 percent in 1982, the smallest increase since 1968 and far below 1980's 10 percent and 1981's 9 percent.