A Big Farm, but Not So Big It Could Get By Without Subsidies

Thursday, December 21, 2006

While some farmers and agricultural experts see a downside to farm subsidies, others say the payments are a fair way to help out farmers in need. "Some years, that's probably what I live on," Steve Loschen said. "Honest to goodness. It helps me stay current on equipment payments and helps pay for my health care. It pretty much covers my family living expenses."

Loschen, 40, grows corn, wheat and soybeans on more than 1,500 acres in Franklin County, Neb., about 30 miles from the Kansas state line. In the past five years, he has received nearly $300,000 in government payments and disaster aid. "Really, if you look at the average of what I have received, I am at the middle to bottom of individuals who actually made their livelihood on the farm," he said.

Loschen draws a distinction between landlords who capture government payments without farming and full-time farmers such as himself who assume all the risks of growing a crop. "This is not welfare for me," he said. "I'm not trying to get rich. I'm trying to make a living. My definition of a family farmer is they're the guys who are actually doing the work."

By government standards, Loschen is operating a large farm. But even at 1,500 acres, he feels caught in the middle: too big to be a hobby farmer and too small to compete against corporations and the biggest farms. "If you look at my business from the outside, I look big. Between my machinery and the land, I manage a couple million dollars' worth of assets. But only a half-million are mine. I'm really a mid-sized farmer."

Most of the land Loschen farms belongs to his father. He also rents about 500 acres from a neighbor who retired to Arizona. Loschen's father and two teenage sons help out, but for the most part he works alone. During planting and harvest seasons, Loschen estimated, he may spend up to 100 hours a week in the fields. "Don't get me wrong -- I don't want to be viewed as a complainer," he said. "We live in a nice house we built new in 1996. I make the monthly payments. We have plenty of food. I pay my taxes."

Last year was a good year, even with low prices. The yields on Loschen's crops were good, and he was able to sell a few bushels in advance at above-average prices. He also received about $60,000 in federal payments. "Last year was a great year. My net worth grew a little. If I could do that year in and year out, that would be good."

In recent months, prices for corn have shot up dramatically, in part due to the growing demand for corn-based ethanol. Prices have been running about $3.50 a bushel, more than $1.50 a bushel above last year's prices, Loschen said. He estimated that farmers need $2.75 a bushel to cover their costs. "We can make a living at these prices," he said.

But there is no guarantee that those prices will last. The ethanol boom could go bust. And the number of family-owned farms in Franklin County and Nebraska is declining, as the remaining farms get bigger. At 930 acres, the average size of a Nebraska farm is more than twice the national average. Federal agricultural subsidies are also growing, up 6 percent since 1997, government data show.

"There's no way you can just go 'click' and there will be no more farm payments. Everybody like me would be broke," Loschen said. "Ideology got us to this point. We need a new ideology to take us back to where we need to be."

-- Gilbert M. Gaul

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