Isn’t it amazing how some agricultural experts can look at the situation in their local area or region and think it must apply to the whole country?
Take the recent comments of Barry Flinchbaugh, agricultural economist with Kansas State University. Flinchbaugh said the lack of a farm bill should not be an obstacle to farmers receiving new crop loans.
“Any banker that tries to pull that, call him on it,” Flinchbaugh told a group of farmers in northeast Kansas. He said the idea that lenders are holding up on making farm loans because of uncertainty over the farm bill is a “myth.”
Maybe they have different banking regulations in Manhattan, Kansas, where K-State is located, but Sunbelt lenders aren’t making new loans because — without the new provisions of the House farm bill or the bill in the Senate — they can’t make loans cash flow.
Low cotton and grain prices and three and four years of adverse weather conditions have made it impossible for many southern farmers to show they can repay a new loan without additional government assistance.
Trying to blame lenders, as Flinchbaugh seems to be, is a mistake, loan officers say, because of federal banking regulations. No matter how much they want to help farmers, putting too many bad loans on the books is an invitation to the bank examiners to close their doors.
Some readers may remember that Flinchbaugh was chairman of the Commission on 21st Century Agriculture, which Congress created in 1996 to make recommendations for the next farm bill. (Instead of implementing the Commission’s proposals, the House Agriculture Committee mostly adopted a minority report authored by Arkansas producer Jim Dupree.)
Agricultural economists aren’t the only ones trying to make national policy based on a regional picture. Politicians have also been getting in on the act.
Sen. Richard Lugar, R-Ind., keeps referring to how farmers in his state will “need a wheel barrow to haul all their money to the bank” if the Senate passes the Daschle-Harkin bill that is pending in that chamber.
It’s difficult to imagine that Indiana farmers have gotten as flush as Lugar seems to think after six years of his Freedom to Farm legislation, but we know what those years of $4 soybeans and 30-cent cotton have done to farmers in the South.
Then, there’s Sen. Charles Grassley, R-Iowa, who reportedly will offer an amendment to the Senate farm bill capping farm program payments at $225,000 per farmer or $275,000 for a husband and wife when both participate in the operation.
Grassley’s 300 and 400-acre farmers in Iowa rarely hit the payment limitation, so the senator has swallowed the Environmental Working Group propaganda about all the payments going to big farmers and “decided to put a stop to it.”
It doesn’t matter that his amendment, which apparently would also cap marketing loan payments and eliminate commodity certificates, could spell doom for many row crop producers across the southern U.S.
Another agricultural economist that I know used to say that it isn’t that we know so much, but that we know so much that isn’t true. Make that double for experts who don’t have a clue about what’s happening outside their area.