TRAVELING by tractor and Model T over rutted dirt roads, Salve Bergland and his three sons made their way to Minnesota in 1920 to found the family farm that Salve had been searching for since he came to America. Arriving in Roseau, a fur trading post nine miles from the Canadian border, Norwegian emigrant Bergland rejoiced at the sight of the deep, lakelaid soil stretching for miles against the Great Plains horizon.
The Bergland fields, however, did not sprout gold. Much of their 240 acres turned out to be poorly drained marshland. Moreover, while wheat, oats and flax were selling for more than $1 a bushel when Salve and his sons first planted, when they harvested three months later the World War I boom had suddenly gone bust and prices had dropped to pennies a bushel.
Nevertheless, Salve's dream took root, and Berglands have persisted on that farm -- since grown to 600 acres -- through four generations. The third-generation Bergland, Salve's grandson Bob, is now our secretary of agriculture, the first farmer in recent history to serve in that office. The fourth generation is represented by his daughter, Diane, and her husband, Steve Dahl.
The story of the Bergland farm, of what it has meant to its family, both economically and emotionally, is the story of one of our most revered and endangered institutions. At stake in its uncertain future is the shape of rural American life and control of our food supply.
Some see a 600-acre family farm today as a meaningful enterprise. To others it is an economically insignificant reminder of an outdated, romanticized way of life. Such conflicting visions were sharply drawn during last year's tractorcade protest in Washington as young farmers challenged Bob Bergland.
"I hear you're a farmer. How much land you got?" asked one bearded Texan who farms several thousand acres.
"Six hundred acres," replied Bergland.
"You call that raggedy-ass thing a farm?" the Texan fairly snorted, to the approving jeers of his fellow big farmers.
"Well, young man," Bergland replied, "the difference between our farms could be that I've made some money with mine, and from your complaints, I gather you haven't."
Bob Bergland is a plainspoken, taciturn Norwegian, but his agrarian values come pouring out at mention of "young high-rollers, land speculators and get-rich-quick farm tax-write-off schemes." He seethes with contempt for farmers who rolled into Washington in new 4-wheel-drive pickups and $60,000 tractor rigs to complain about a price drop after they had enjoyed an unparalleled five-year bonanza.
"Those guys don't know the meaning of 'hard times', Bergland says. "Losing a crop is no big news to me. I've done it lots of times and rolled with the punches.
"Why did we stay? It's home, for one thing. That's where our roots are . . . I think there is some underlying value to being able to say, 'It's our piece of land' . . . Even in the toughest going, I figure it had to get better, there had to be a way of making this thing run better."
The agriculture secretary believes farmers like himself are "on the endangered species list." Recently, he launched nationwide hearings and a department study into the changing structure of American agriculture. The aim is to analyze the continuing trend toward bigger and fewer farms, to find out if the country is interested in seeking more effective remedies to preserve the family farm, ranging from limiting farm payments to smaller producers to providing special loans to young starting farmers.
Much of this sounds like old hat. Politicians have been spinning rhetoric about family farms for 40 years, while the farm population has dwindled from a peak of nearly 7 million in the mid-1930s to 2.7 million today. Despite the hardship entailed by millions forced off the land, the consolidation and modernization of U.S. agriculture has given us a highly productive, efficient farm economy, plentiful and relatively low-cost food, and the chief source of our foreign trade earnings. In this respect, American farming is a great success story.
Of the remaining farms, however, almost 2 million are not viable family-supporting commercial ventures in themselves. They provide a home, a good lifestyle and extra income for people who want to live on a farm but who earn their primary income in nonfarm jobs. Many of these small farms will continue to provide an important alternative to urban living and an element of stability to rural and small-town life.
The new concern is for the 600,000 farms that produce nearly 80 percent of our food and fiber, with the largest 200,000 already producing half the agricultural supply. Most of these farms have only their single-family ownership in common with the subsistence farms of 60 years ago. These are highly efficient small businesses employing the latest equipment, chemicals, scientific know-how and accounting advisers.
The Bergland farm, with $100,000 in annual sales, rank in the largest 200,000 farms in gross income, and like most of the others it is highly specialized. It is atypical in that its biggest income producer is grass seed rather than food and its owner works full-time at another job.
Economists generally believe that a majority of these farms already have achieved great efficiency and low per-unit cost. With supply and demand now in equilibrium, most of these larger farms today make a profit -- in good years -- virtually comparable to returns in commerce and industry. But they are very much endangered becasue the high cost of land, mahcinery and fuel preclude most beginning farmers from acquiring such expensive properties.
When one of these farmers retires or dies, owners of even bigger farms or private nonfarmers investors are eager to gobble up his land, and are in the best position to do so. Furthermore, and ironically, a variety of economists have now concluded that most farm programs, credit provisions and tax laws designed to preserve the average family farm are today actually working against that end. The programs mainly help the largest farms grow larger.
Simply put, the question of Bergland's study is: What do we lose if these 600,000 highly productive family farms shrink to 50,000 or 1,000?
Family farm defenders insist that the consequences could include higher, monopolistic food prices, development of the kind of small landed class America has always sought to avoid, and the end to a rural way of life. It is the last which Bob Bergland and millions of others hold dear and, like Thomas Jefferson, regard as important to American society.
When Salve Bergland died in 1936, after years of depressed prices, all he had left was 160 acres of the original farm, which was divided among his five children. The Bergland farm tradition could have ended right there except for his son Sam's persistence.
Supporting his family on 50 cent-an-hour pay as a mechanic and his wife's meager teaching salary, Sam gradually scraped together the money to buy out his brothers and sisters. With one of the first Depression-era-rural credit loans, Sam then added 200 of the best acres in the county, alongside the Roseau River.
Basically the Berglands lived through the '30s by barter, trading eggs, pork and wheat in return for groceries. "We didn't make any money, but we accumulated some land and the farm was a nice place to live," says Sam Bergland.
He not only didn't quit, but he somehow found time to become an organizer for the rural cooperative and government farm relief programs without which many farmers like himself would not have survived the '30s.
Sam passed that zeal on to his oldest son Bob, who graduated from agriculture college in 1948. In 1950, he bought his own 280-acre farm, on a contract deed with no down payment and 3 percent interest.
Plagued by bad weather and low farm prices, Bob Bergland, too, took on part-time jobs to support his growing family and hang on to the farm. He worked as a lumberjack, as an oil company delivery man and mechanic, as a carpenter, as an organizer for the National Farmers Union. In 1955, with only $3,961 in net farm income, he took his wife and four children to Florida and earned an additional $979 in three months of winter construction work.
After several more discouraging years, Bergland turned for advice to his former professor, H. L. Thomas. The old days of general farming were over, Thomas told him. Specialization was the key. He encouraged Bergland to try Thomas' own strain of Kentucky bluegrass seed, a product much in demand for home lawns and golf courses.
After three years of experimentation, the grass seeds finally sprouted, gradually ushering in a new prosperity. Bergland was able to buy out his retiring father's farm, with the help of a low-interest government loan, and he diversified into timothy, which produces a hay desired by Western European farmers. By 1973 Bergland, then serving in Congress, had a before-tax farm profit of $23,000.
The success story has continued since Steve Dahl and his wife Diane leased the farm in 1977 after Bergland was appointed secretary of agriculture. lFor the moment Steve, 33, and Diane, 28 and their two young daughters live an almost idyllic life, paid for in part by three generations of Bergland persistence and by Steve's 80-hour work weeks during planting and harvest seasons -- 40 in town selling farm machinery, the rest on the farm.
From the patio of their new home, Steve and Diane look across their lawn at ash and birch trees alongside the clean flowing Roseau River, and out at autumnal golden fields of bluegrass and green fields of winter wheat. "This is the best place in the world to live," says Steve.
When I visited the farm, Steve was enmeshed in a series of decisions that can determine the margin of profit or loss in today's complex agriculture. Hearing that fertilizer costs would rise 10 percent the following Monday, he called the bank for a loan and hired a man to spread fertilizer -- a decision he might have held off until spring.
Later Dahl huddled with his accountant to decide how much of his crop should be sold in 1979; by holding off on sales he could defer some income taxes, but also run the risk of lower prices for his grain and seeds. In another close decision, he opted for applying an expensive new pesticide to his fields after calculating that it would still be cheaper than eliminating weeds with multiple uses of a fuel-eating cultivator.
To succeed in today's agriculture, Dahl must be knowledgeable about and proficient in using $150,000 worth of complex farm machinery and an array of chemical fertilizers, pesticides and seeds. To get top dollar on his purebred grass seeds, his fields must pass a rigorous certification inspection.
With good weather and strong prices, 1979 figures to be a banner year for the Bergland farm, with nearly $100,000 in gross sales from bluegrass, timothy, wheat and flax. After paying all expenses, Dahl should have a taxable farm income of about $30,000.
Although Diane never wanted to marry a farmer after watching her father struggle, she has now become a farming enthusiast "because Steve enjoys it so much."
But whether the Dahls and other young people like them get a chance to own a farm of their own and continue the tradition of self-sufficient family farming is very much in doubt. Bob Bergland's 600 acres have been conservatively appraised at $450,000 today, or $750 an acre. The value of his land has soared in recent years as buyers compete for farm land not only for its productive potential, but as a hedge against inflation. The value of American farm assets has tripled since 1960, and doubled in the last six years alone. A lot of farmers have become rich on the value of their land, but the problem is that only the rich can now acquire the land, and efficient profitable family farms are now being bought out by larger, wealthier landowners and entrepreneurs.
The average farmer today is in his late 50s and for every four farmers who die or retire, only one new one is entering farming. A recent General Accounting Office study warned that the current pattern of farm land acquisition -- including rising ownership by absentee landlords -- poses dangers to the nation's traditional family farm economy. As a Minnesota economist described the situation, "those that got are getting more; those that don't got, aren't going to get."
The Bergland farm is virtually paid for and can provide a nice income, in good years, to the secretary or to his son-in-law -- so long as Dahl rents it for a modest $12,000 a year from the trustee who runs the farm in a blind trust for Bergland.
But if Steve Dahl had to buy the farm at current inflated market prices, his profits in even a banner year like 1979 would not cover interest payments alone. Few young men can manage the initial minimum investment of $500,000 needed to start a competitive farm enterprise.
"There is no way i can buy this farm for what it is worth and what somebody else will pay for it, and earn a living at farming it," laments Dahl. s"I can't compete for land against the established farmer who bought land at $150 an acre and now can borrow against it at $700. What is going on here is neighbors gobbling up neighbors and outside investors gobbling them up."
Parents also are in a quandary. Bergland, 51, and his wife Helen need the farm for their own security, but its future rests with Steve and Diane, because the other five Bergland children do not want to farm. "Steve is a good farmer and works his heart out and we'd like them to have the place someday," says Bergland, "But if we sold it to them for market value, we don't think they ever could pay for it. If we made a concession and sold it to them for what the farm can earn as an income producer, it would be unfair to the five kids [who will eventually share in inheritance]. It's a dilemma.
The nationwide scramble for farm land can be seen at the borders of the Bergland farm. Bob Bergland's adjoining neighbor Ed Baumgartner craves more land than his 1,800 acres to bring two sons into his profitable operation, and is willing to pay a premium price for it. A few miles down the road is the boundary of a 16,902-acre farm that belongs to a 21-year-old woman named Gabriele Grunig. Her German industrialist father bought her the land in 1976 and 1978, and she is becoming a u.s. citizen to protect the family investment. Throughout the county stories continue to swirl about Tommy Thompson, a North Dakota land developer and speculator who bought and then sold, at escalating prices, thousands of acres in the area, and now has bought 56,000 acres in another Minnesota county. In the eyes of many local farmers, the Grunigs and Thompsons are driving up land values and increasing land scarcity to the detriment of small farmers who need to expand, or new ones trying to start out.
Rumors about farm land sales are a staple along with six-inch-high stacks of pancakes as farmers crowd into the Travel Inn coffee shop in Roseau for a 7 a.m. breakfast. Many have already been up for several hours, goose hunting or fishing for walleye at Lake of the Woods.
Scandinavian accents are common in the robust little town. While retaining its ethnic flavor and customs, Roseau has regained its prosperity through a combination of good prices on the farm and a factory which builds snowmobiles. Roseau is benefiting from the recent migration back to rural America, in which the nation's nometropolitan counties gained 2.3 million people between 1970 and 1976, growing faster than the cities.
It could be that industry will provide the jobs for a continued revitalization in rural America, but Roseau's business leaders remain convinced that farming is the backbone of their economy and community. "We could lose another 10 percent of our farmers," says local banker Bob Foley, "but after that we would have trouble."
The 500 or so substantial commercial family farms in the county provide prosperity to a wide variety of farm implement, oil, chemical and grain dealers, as well as to general merchants. In contrast, a few conglomerate farmers would buy their supplies from the factory or in wholesale lots from regional distributors. But beyond such economic considerations the unique rural character of this and countless other communities would change if most people worked at factory jobs and a few corporations owned most of the farm land.
A number of years ago Earl Butz, secretary of agriculture in the Nixon and Ford administrations, stirred a storm of protest when he suggested that "farmers must adapt or die." Bergland was among the many politicians, who deplored Butz's rhetoric, but the Bergland farm has indeed adapted. It profitably grows the specialty seeds for which it is best suited just as other farmers specialize in corn, wheat, cotton, soybeans, a variety of fruits and vegetables, or animal feeding.
A case can be made that the nation will be better off agriculturally by maintaining these one-half million or so efficient family farms. Further economies of scale, the experts suggest, will do little to reduce costs for most crops. In fact, soaring oil prices may handicap the largest farms more than smaller ones. The present trend of land pyramiding in which farm investors buy more and more land, counting on its future inflated value rather than its present productive return, also could prove shortsighted. Many of the big farmers protesting at last year's Washington tractorcade had so overextended themselves in adding new land and equipment that it took only a modest drop in prices to put them in deep economic trouble.
Yet the trend toward concentration continues, with consequences which could mean higher food prices for American consumers. Chicken production is already controlled by a few vertically integrated conglomerates and hogs are heading rapidly in the same direction. Much of fruit and vegetable production is increasingly dominated by a relatively few large corporate produces. Three huge cooperatives already dominate milk, and show no reluctance to throw their weight around.
Secretary Bergland and a variety of experts are perplexed about how to stem the loss of family farms. It is now generally agreed that a variety of government farm programs and tax benefits established over the last 40 years to help the small farmer -- and which helped Sam and Bob Bergland -- now principally help the biggest farmers and outside investors, as well as encourage ever higher land prices.
The smaller farmer gets very little of total farm subsidy payments, which are geared to production. Steve Dahl, for example, received a $2,000 federal payment last year in return for idling 40 acres of wheat land. The wealthiest one-fifth of farmers get three-forths of the payments.
Special benefits in federal income and estate taxes designed for the small farmer also now encourage outside investors and the assembling of ever bigger farm properties.
The Farmers Home Administration loan programs are "out of hand," says Bergland, with hundreds of loans of more than $1 million apiece "contributing to land pyramiding and to disenfranchising the Steve Dahls of this world." Ronald Schwehr, the local FHA official in Bergland's home country, says he has to turn down small and beginning farmers for land purchases loans "because land is selling for twice its earning capacity and the repayment is just not there . . . If they have to buy the land and machinery, they're sunk from the start."
A new apprroach might be to tailor benefits especially to meet the needs of family farmers, particularly those trying to get started in the business. For example, sellers might be given a tax incentive to sell their land to beginning farmers. Landowners might be encouraged to lease to beginners, giving them a chance to get under way with a more modest capital investment. Government crop loan guarantees could be limited to the acreage size need for an efficient family farm.
Such programs would have rough sailing since the largest producers have the most political clout. They will be dismissed by many as just another sentimental effort to turn back the clock on progress, and on inevitable economic change. Nevertheless, the current Agriculture Department examination of farm structure may at least give the country a chance to ponder what will be lost if Steve Dahl doesn't get to continue the self-reliant tradition of Salve, Selmer and Bob Bergland.