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Special Report: Drought of '99

  More Debt Won't Help Farmers Hit By Drought

By Marcella Bombardieri
Washington Post Staff Writer
Sunday, August 15, 1999; Page M01

With Southern Maryland farmers expecting to lose 30 to 70 percent of their crops this year, the disaster assistance loans made available last week by U.S. Secretary of Agriculture Dan Glickman will be of little use to the region, said farmers and state and federal agricultural officials.

The farmers most in need of drought aid are already so heavily indebted that the U.S. Department of Agriculture's emergency loans are unappealing despite their low interest rates, said Tom Shockley, state executive director of the Farm Service Agency (FSA), the USDA branch that will administer the loans through its county offices.

"As one man told me, if you're drowning in 10 feet of water, what is pouring two more feet of water over your head going to do?" Shockley said. "To borrow more money to get deeper in debt is not the answer to the problem."

Southern Maryland farmers instead need grants--not loans--from Congress, or else some will be forced to sell their land to developers, said many in the agricultural community.

Farmers in Charles and St. Mary's counties expect to lose a sizable chunk of normal crop yields--45 percent to 50 percent of the corn crop, 50 percent of soybeans, 70 percent of hay, 30 percent of tobacco and 40 percent of vegetables, according to FSA projections. Expectations are a bit less dim in Calvert County, where farmers anticipate losing 20 percent of corn, 30 percent of soybeans and 30 percent of the hay yield.

Most likely, only a handful of Southern Maryland farmers will apply for the low-interest loans released last week by Glickman's disaster area declaration for almost all of Maryland, said Amelia Farrell, acting director for the FSA offices in Calvert and St. Mary's counties.

The loans are restricted to family farm operators who have been turned down by commercial creditors, so only the most severely strapped farmers would be eligible. And many of those would be loath to plunge themselves deeper in debt, said Emily Wilson, assistant director of government relations for the Maryland Farm Bureau, a farm industry group.

"These low-interest loans are by no means the saving grace," Wilson said. "It's not going to pull the state's farmers out of the economic disaster they're facing by any stretch of the imagination."

Another requirement for the emergency loans is that farmers must have suffered a loss of at least 30 percent of an essential crop. The loans, currently at a 3.75 percent interest rate, are available at up to 80 percent of actual losses, with a maximum of $500,000 of indebtedness. Farmers have eight months to apply, and many will not know how much help they need until the fall or next spring, Shockley said.

Grants from Congress are what would really boost Southern Maryland farmers, said Maryland Department of Agriculture spokesman Don Vandrey. Last year, Congress appropriated almost $2.4 billion for farmers who fell victim to drought and other natural disasters. Vandrey hopes the federal government will consider similar measures this year for the mid-Atlantic region.

In the meantime, the FSA has an array of other, smaller programs to aid farmers, and Maryland Gov. Parris N. Glendening (D) is putting together a $3 million state package to provide assistance with erosion-preventive crops, small grains, water and livestock feed, Vandrey said.

State and federal aid, however, may not be enough to keep all of Southern Maryland's farmers in business. Continuing drought and "devastatingly low" commodity prices have created "a vicious cycle" of loss that could drive some families to sell their land to developers, Wilson said.

Many farmers agree that this summer's nightmarish weather creates a temptation to bow out of farming altogether.

"The developers are parked at the gates, ready to move in," said Charles County farmer B.B. Kemp. "If farmers can't pay their taxes and can't pay their bank loans, they're going to say, 'The hell with it.' "

Calvert County farmers Phyllis and Richard Horsmon have decided to sell 20 acres of their 100-acre farm in St. Leonard. They would be even more desperate for cash if they hadn't diversified their crops to emphasize such nontraditional items as chrysanthemums, or if Richard Horsmon had not sought an outside job--two steps that more and more farmers are taking to stay afloat.

"It's sad, but we have no choice," Phyllis Horsmon said about the sale. "The farmer loves his land and wants to save it, but he also has to take care of himself, his kids and his retirement."

Not everyone agrees that this year's drought will spell the end of local farmers, or even that federal aid is a good idea. According to Richard Horsmon, government programs can do farmers more harm than good by allowing them to sink into too much debt and avoid hard choices about how to save money.

Horsmon's opinion is echoed by St. Mary's farmer Donnie Tennyson, who adds that while farmers may like to complain, they know how to survive tough times.

"We're going to have to dip into our nest eggs [this year], but that's normal in agriculture," Tennyson said. "Overall, I don't think we're going to see a big exit from farming here locally. We're very durable people."

© 1999 The Washington Post Company

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