Farmers, bankers and clergy warned a congressional meeting yesterday that unless Washington acts quickly to resolve the growing farm debt squeeze, agriculture and banking institutions will be thrown into chaos.
"The scope of the present crisis is unparalleled, even in the 1930s. We're astounded at the rapidly escalating nature of the crisis," Bishop Maurice Dingman of the Roman Catholic Diocese of Des Moines said in a statement that brought a standing ovation from the audience.
"It is a disaster of astounding proportions. Equally astounding is the reaction of federal officials who are unaware of or don't care about the gathering storm," the bishop said in behalf of the National Catholic Rural Life Conference.
"We're dying . . . . If we lose those family farmers and businessmen in small towns, we have lost the bedrock of democracy."
Other witnesses brought much the same message to the meeting convened by Sen. John Melcher (D-Mont.) as part of a bipartisan Farm Belt campaign to focus the Reagan administration's attention on the farm financing crunch.
Although the Cabinet discussed the situation this week, spokesmen said there is no indication that the administration intends to respond to the increasing calls for help.
Melcher, who set up the session after he was told it was "premature" for the Senate Agriculture Committee to take it up, said, "It is very alarming to find an attitude in Washington that pushes aside what many of us feel is a most critical crisis."
His meeting drew 13 House and Senate members, Republicans and Democrats, who took turns urging quick action by the White House to avert a situation that, in the view of many bankers and public officials, could throw thousands of farmers into bankruptcy if they cannot get spring planting loans in the next 60 days.
"My state of Iowa is dying. We are literally dying," said Sen. Tom Harkin (D-Iowa). "In the first six years of the Great Depression, Iowa lost 7.8 percent of its farmers. This year we will lose 10 percent in one year."
Witness after witness stressed that the debt-restructuring program announced by President Reagan last September is not working and will not work unless rapid and major changes are made so it reaches more farmers and draws more participation by country banks.
"We don't have the time or the need for further study," said A.J. (Jack) King of Kalispell, Mont., president of the Independent Bankers Association of America, which represents most of the rural banks that finance farmers.
King said the administration must increase funding "to several billion dollars" for the Farmers Home Administration (FmHA), which finances farmers who cannot get credit elsewhere, and must alter Reagan's bank loan guarantee program to draw in more hard-pressed rural lenders.
"It is not just a crisis. We're seeing a farm collapse," said David Senter, an official of the American Agriculture Movement. "Not only the collapse of rural America, but we're about to see an explosion."
"Confrontation," added Sen. J. James Exon (D-Neb.), "is something we use as a last resort, and we're almost there."
"March 1 is the magical date because rents and payments come due," said Tim Wrage, a Nebraska fertilizer dealer. "If they are not paid, land and machinery values would collapse. It is paramount that some good news come from Washington to shore up confidence."
"The next 30 to 60 days are critical," said Sen. Charles E. Grassley (R-Iowa). "There will be a ripple effect that will shake not only the banks of Iowa, but banks of the larger cities as well."