There is a lot of nonsense about the nation's current agriculture woes being spread around these days, much of it by President Reagan, much by supposedly tough-minded and knowledgeable administration spokesmen such as budget director David Stockman, who seems to believe that the trouble is simply a matter of greedy, stupid farmers being punished with bankruptcy.
Such twaddle only masks the fact that our farm problems go well beyond the widespread suffering and heartbreak of farm families individually and rural society in general.
The farm difficulties have a potentially long-term adverse effect on our future farm productivity, which is why there is an unusually high level of public concern about our agriculture problems. People get uneasy when they sense that agriculture is in serious trouble because they know that the security of the nation's food supply is crucial.
Foremost among the erroneous ideas so blithely being fostered by the free marketeers of the administration is that it is inefficient, marginal and greedy farmers who are being forced into bankruptcy as atonement for their mistakes and sins, and that what will emerge thanks to the magic of the market system is a lean, efficient farm industry.
Second is that farm efficiency and productivity is in direct proportion to size because of ongoing technological and scientific improvements -- that big is good and bigger is better.
In the first case, the opposite is happening. Most of the farmers being forced into bankruptcy are the younger, more aggressive, more progressive and most willing to take risks. Those who are surviving are generally older, less educated, smaller operators who are less productive but have a tolerable debt ratio.
"What we're seeing has little to do with efficiency because we're cutting out farmers on the basis of debt, not efficiency," says Prof. Neil E. Harl of Iowa State University, one of the nation's leading agriculture economists. "We're cutting out the young, aggressive managers who have set the pace in efficiency. And America doesn't have as much excess (agricultural productive) capacity as many think."
This is partly because the strength of the dollar has cut greatly into American farmers' ability to compete in the export markets that were a great source of their prosperity in the 1970s, with the result that surpluses are piling up at home and driving prices down. The strength of the dollar is a "devastating force" working against the farmers. Until it is devalued by 20 or 30 percent we are going to continue to have serious agriculture problems, Harl says.
The troubles that are driving the best and brightest out of farming began in the 1970s, when they incurred their now intolerable debt loads buying land and machinery. Some were motivated by greed but many were trying to get a rational hedge against inflation, just as nonfarmers were by indexing wages and income tax brackets.
And many young farmers, who started as most of them do by renting land, were at the normal age to start buying land of their own, which they have to do if they don't want to remain perpetual tenants. Land prices and interest rates were high but inflation kept pushing them up and up, and to many young farmers it seemed that land was moving out of reach, so they grabbed for it.
Iowa State University studies show that the average age of the Midwest farmers who have the lowest debt/asset ratio -- 10 percent or less of total assets -- is 61. The average age of those whose debt/asset ratio is 11 percent to 40 percent is 53. For those in the debt/asset range of 41 percent to 70 percent, the average age is 48. For those 70 percent and over it's 46.
The younger the farmer, the better educated and more productive he is. A farmer's productivity follows a bell curve, according to Harl. It climbs as he builds his operation, is highest between ages 45 and 55, then efficiency and farm size start to fall as he begins to pull back, phase out, turn it over to a son or sons and starts easing into retirement.
There is also the erroneous idea that the demise of a large number of family farmers is inevitable because bigger operations are more productive. In Midwest corn, cattle and hog farming, peak efficiency of scale is reached with about 600 acres. Bigger operations don't enjoy additional economies, and corporate farms particularly start suffering inefficiencies because of problems of management and motivation.
"There are problems of control and coordination, and corporate employees aren't profit-oriented because they don't have a stake in the operation," Harl says. "The Midwest family farm has a high level of management ability and, because of that plus a high level of capital and credit available, corporate farms have been kept out of most states except a few such as California, Hawaii and Florida. States that have limits on farm size don't have a different farm structure than those that don't."
The farmers' worst enemies are public policies such as the huge federal deficits that have the dollar overpriced and contribute to high interest rates and tax provisions that were supposed to help the full-time family farmers. Instead, they have mostly benefited the wealthy who invest in unprofitable operations as tax shelters and encouraged land speculators -- "sod busters" -- who are paid by the taxpayer to drain wetlands and plow under fragile grasslands to put into crops that are already in surplus. You don't hear of suicides by those operators.
That's why the administration's proposal to do away with price supports eventually is crazy until there is a rational economic environment for the most productive farmers. To throw so many into an open market situation -- and bankruptcy -- under the burdens they now bear is not only desperately unfair but counter to the national interest.
"In the fall of 1983, we were closer to the bottom of the barrel in grain supplies world- wide because of drought and the PIK program (payment in kind of products to farmers as an incentive to curb production) than most realize, probably the lowest in two decades," Harl says. "It wasn't apparent because of our domestic surpluses due to our fall off in exports because of the dollar."
There's a reason why the hard-ball remarks of Stockman, a former flower child turned Social Darwinist, and the bad Gridiron Club jokes of President Reagan ("I think we should keep the grain and export the farmers") deserve the contempt with which they were received. Neither of them knows what he's talking about.