Back in mid-December, when farm prices were near their bottom, Ron Hoffman was angry - and ready to show it. On Dec. 21, the 34-year-old corn grower led dozens of other farmers here in staging the first full-scale tractorcade in this central Ohio farming community. If nothing happened by spring planting time, they just might consider a strike, he warned.
Today, after two months of vigorous protests, Hoffman and his friends still are frustrated, but the bloom has worn off the American farm strike movement. Although farmers have made national headlines with Washington demonstrations and tractorcades into suburbia, their impact has been only surface-deep. If anything, the White House has been unexpectedly firm in refusing concessions.
"A lot of us think it's like beating a dead hog to get anything out of Washington," Hoffman says, conceding the effort has been futile. "Oh, we managed to get everybody's attention, but as far as getting something done, we haven't." Dave Carroll, Hoffman's partner in the Chillicothe protest, agrees. Like most American farmers, both plan to plant a full crop again this year.
Such lingering frustrations pose a nagging dilemma for the Carter administration. Although the threat of a farm strike effectively has fizzled, the sight of protesting farmers is a visible political problem. Yet, officials and farm experts - both Democrats and Republicans - agree there's no real solution for the situation. Some even question whether anything should be done at all.
The fact is, while times admittedly are tough for Hoffman and some other growers, the bulk of America's 2.7 million farmers aren't really in such desperate straits. Although farmers no longer are reaping the bumper profits they did a few years ago, most are eking out respectable, if moderate, incomes. And in many cases, the difference stems from investments they made in 1976-77.
The withering of the farm strike threat is as telling a development as any.In a narrow sense, the protest fell flat because farmers simply aren't united over what, if anything, should be done to rescue them. Even last month's ringing demands for "100 per cent parity" weren't endorsed by any visible majority. And the strike effort nationally had no organized leadership.
More significantly, however, the failure reflected the tremendous disparities in the economic plight of different groups of farmers. Wheat farmers, particularly in the Great Plains states, are hurting badly - but dairy and livestock farmers aren't complaining a bit. Established farmers generally have survived the recent price drop in good shape - but newer ones have not.
But agricultural economists say those in deepest trouble are the ones who made bad investments in land and equipment - either by buying or renting acreage priced too high to enable them to make a profit, or by splurging on expensive new equipment. There's no doubt that when prices dropped, these farmers found themselves in trouble. The question is, should anyone bail them out?
To many farm experts, the current dilemma had its roots in the now-famous farm-price spurt of 1972-73. With major crop failures in key grain-growing nations in those years, demand for key crops far outstripped world supplies - sending farm prices to record levels, and providing an unexpected windfall for American farmers.
While some farmers bought luxury items, most more typically plowed their money back into more land and equipment. The result was an unprecendented land grab that sent acreage prices soaring to record levels throughout the nation and produced a unexpected boom in sales of new tractors and other new farm equipment. In some cases, it also sowed the seeds of financial distress.
Before the boom hit Chillicothe, for example, a farmer could buy decent bottom land here for $400 an acre and get a huge, four-wheel-drive tractor for $22,000. Today, that same land sells for $1,800 an acre, and the tractor sells for $40,162. Moreover, rental prices have jumped accordingly - to $80 an acre now, from $15 five years ago. And real estate taxes have soared.
Almost as important, the flush of new money raised farmers' lifestyles - and their expectations. While some farmers sunk virtually all of their new money into more land, many used the extra cash to re-do their homes, take expensive vacations or buy recreational vehicles. Reporters traveling through the Midwest last year noticed substantial improvements in farm living standards.
The problem is, farm prices began falling last summer, leaving a few farmers - particularly those who overextended - crimped. While established farmers were able to borrow on the inflated equity, others found that their continuing high land costs wiped out their cash flow. In August, farm prices went into a tailspin, taking more farmers with it. Prices have firmed since, but not much.
The financial difficulties were bad enough. But John Marten, economist for Top Farmers of America, a farm consulting firm, believes the recent improvement in lifestyle may have done more than anything else to bring on the recent strike effort. "All discontent is by comparison," he says. "The number one factor behind the strike is that we've had such good times in recent years."
To be sure, there are some farm families with genuine financial problems. The Hoffmans, for example, have had to cut back sharply on equipment purchasing and maintenance this year. Karen Hoffman says the family has run through $11,000 in savings in the past 13 months just to keep the farm afloat and meet living costs. Even their three youngsters have cut out movies and frills.
For the nation as a whole, the statistics aren't much to brag about. U.S. Department of Agriculture figures show farm income last year fell to $20 billion - down $1.9 billion from the previous year's level, and $9.9 billion below the 1973 high. After adjustment for inflation, "real" farm income last year was the lowest since the Depression-plagued year of 1934.
But a closer look at the figures shows that the farm situation isn't quite as bad as it might seem. For one thing, the overall statistics show only what farmers earn from growing crops or raising livestock - a job that occupies only nine months of the year and accounts for less than half of total farm income. Wages from winter or second-earner jobs create totals that aren't nearly so bad.
And more sensitive indicators show the distress is limited to specific pockets of farmers. While wheat prices are depressed these days, for example, overall average prices received by farmers are no lower than they were a year ago. And the Farm Credit Administration reports foreclosure rates on loans to farmers haven't risen appreciably despite the price decline.
In nearby Circleville, W. Chaney Vance, manager of the Pickaway County Production Credit Association, which provides the bulk of loans to farmers in an eight-county area here, reports not one default on loans for new land or equipment. "About 10 per cent of our customers are in any kind of financial trouble," he says - compared to 5 per cent in "normal" times.
Other local indicators are mixed. William B. Brown, chairman of the Kingston National Bank, which does a hefty percentage of its business with farmers, says some farm families have begun eating into their savings to keep pace with costs. But Frances Wolfe, assistant manager of the local J.C. Penney store, reports farmers still are "buying more than ever."
Ironically, the biggest victims have been the local farm equipment dealers, who have seen their seller's market of last summer turn into an unsightly - and costly - inventory pile-up. Don Hill, who runs an International Harvestor dealership near Circleville, says the last big surge of new equipment sales was in September, just before prices began to plunge in earnest.
Indeed, many of the farmers in the Chillicothe area have made out well enough. Timothy N. Hartsock, who runs a 1,500-acre corn-and-soybean farm northwest of here with modern managerial techniques, concedes the decline in farm prices may crimp his equipment purchases some this year, but says he still expects a "fair" income.
Hartsock and other better-off farmers such as Frank Bowling, who farms just west of Circleville, contend that too many would-be strikers are wasting time protesting, that the time could be better spent raising livestock - a job they say isn't as pleasant, but is a lot more profitable in the longer run.
The question is, what, if anything, should be done to help the farmers who are in trouble?
The farmers who visited Washington last month proposed two strong measures: First, they wanted the government to boost price supports to provide farmers with 100 per cent parity. Second, they wanted farmers to strike by cutting production severely - perhaps to 50 per cent of 1977's levels - to push prices up again.
But agricultural experts - and a good many farmers - have serious qualms about both these proposals. To begin with, providing full parity would peg current price-cost ratios to those of the boom years of 1910-1914 - an arbitrary linkup that bears no relationship to production costs or market conditions today. (Farm productivity has soared since 1914. And land costs have, too.) It also could add another $12 billion to the budget deficit.
If the government did grant 100 per cent parity, many farm officials say it would wreak havoc in the markets. Prices received by farmers now average about 63 per cent of parity. To spur them to 100 per cent would mean boosting wheat prices from the present $2.54 a bushel to $5.
Moreover, if farmers did cut production severely as part of any nationwide strike, it would leave them without needed income to keep up their homes and businesses. "Those guys might talk about not planting much this year, but there's only about three idiots in the country who are going to go along with it," Hartsock says. Even Hoffman concedes a strike isn't likely anymore.
From the administration's point of view, the government simply can't afford any major new farm programs. Over Carter's objections last year, Congress passed a massive $7 billion farm bill that liberalized the formulas for farm subsidies and loan guarantees. Bob Bergland, the Secretary of Agriculture, is urging farmers now to "use the tools that are available."
What officials are hoping for is that farm prices will firm up just slightly later this year - enough to provide farmers with a somewhat better cash flow, but still not crimp big-city consumers, who nowadays have most of the votes. Agricultural economists both in and outside the administration are predicting just such a scenario - provided export gains and the weather hold up.
But on the broader question of further relief for farmers, the consensus still seems to be that, despite pockets of hardship, no major new efforts are needed.
That still leaves the political problem, however, with farmers like Ron Hoffman becoming increasingly bitter that, unlike other groups in the economy, they're being ignored. Hoffman and Dave Carroll watched the miners' strike in Ohio with a mixture of disapproval and envy, and even Bowling worries whether agriculture will pay enough in future years to attract this own sons to farming.