A year or so ago, Ervin Gray and some other farmers decided the farm debt crisis was so severe here in north-central Missouri that they needed to form a committee to tell their story and try to get some relief.
Committee members got the attention they wanted. Their congressman, some state officials and the news media listened to the grim economic picture they rendered. But there was no relief. President Reagan vetoed a debt-assistance package, land prices continued to slide, farm prices went lower and the new farm bill passed by Congress in December promised only more of the same.
Today, the agricultural debt crisis continues unabated here and across the rest of the Midwestern grain belt, but there is a difference. In place of last year's huge rallies, marches on Washington and demands for help, there is silence. Sullen, bitter, despairing silence.
Ervin Gray took a break from a tractor repair job the other day and talked about the change. "We brought this to public attention, but our committee now is in a holding pattern, I reckon," he said. "It's more serious out here than what people think. But the protests don't seem to do any good and the feeling now is that there's nothing left."
Wayne Wendt, a farmer who headed the committee, added: "We have reached a void as to what we can do. We were trying to draw attention to the problem, but there's not a whole lot you can do once you've explained the problem. A political process has to occur to affect the situation."
"We have moved from a farming crisis into a lending institution crisis," he continued. "When the farmer is out here sucking eggs by himself, he has no influence. But lenders do and when they begin to complain, maybe things will happen."
In hard-pressed Iowa, a center for much of the farm-crisis protest movement since 1983, the resignation level parallels Missouri's. "It is as though the lenders and borrowers are sitting, waiting for something to happen," said Neil Harl, an agricultural economics professor at Iowa State University. "But they now realize that spring is coming and they have to face up to it."
"Some thought that Congress would solve this, but it has been a series of trip-hammer blows for most of them -- the new farm bill, the Gramm-Rudman-Hollings budget balancing moves, the prospect of lower commodity prices . . . . The people who are in trouble now are our best managers, farmers who are just not emotionally suited to screaming and carrying ax handles," Harl said.
New Agriculture Secretary Richard E. Lyng reiterated during his first week in office that farmers cannot expect more from Washington. He said the administration has no plans to provide additional credit aid beyond the administration's recent agreement to transfer $750 million into the depleted direct operating loan accounts of the Farmers Home Administration (FmHA).
Lyng said the administration intends to continue to emphasize the use of guaranteed loans to help farmers through spring planting, despite reluctance by many commercial lenders to participate in the program. The secretary said he was "not closing the door" to considering other approaches later.
Here in Missouri, the news from Washington offers little succor.
All across the northern part of the state, where a rash of bad weather since 1980 has exacerbated the problems of land deflation and low market prices, the story and the sentiment seem the same: depressed. Land prices have fallen by about half since 1981, farm bankruptcies and foreclosures have thrown thousands of acres of land onto a stagnant market and lenders are tightening the purse strings.
Farmers Home Administration statistics underline the severity of the situation. FmHA has an inventory of 123,000 acres of repossessed Missouri farmland -- more than it holds in any other state -- and about 80 percent of it is being kept off the market lest land prices be depressed even further. A fourth of Missouri FmHA loans were delinquent at the end of 1985, and the delinquency rates were double and triple that in the northern counties.
"Resignation is a fairly accurate description," said Rep. E. Thomas Coleman (R-Mo.), who represents the state's north-central region. "Farmers are recognizing that unless there is a real turnaround, many cannot continue . . . They recognize that the 'transition' is here and that it takes more than a new farm bill to solve our problems."
Tom Nee, Grundy County supervisor of the FmHA, agreed. "I'm seeing a lot more calm as people look at their situation, rather than waiting for outside help. There's not so much a willingness to blame others. The debt has built up here, and with production costs and the bad weather and prices down, they are realizing there's no way to get their production costs back. People around here are pretty tough . . . . They know how they got it and what they have to do to keep it."
But Coleman and farmers also are critical of Missouri FmHA rules that they contend have prevented full use of the money available for direct operating loans and guarantees of loans by commercial banks.
As of two weeks ago, Missouri had obligated only 5 percent of its loan guarantee money -- far less than neighboring states. Nebraska, for example, had committed 96 percent of its guarantee money; Oklahoma, 77 percent; Iowa and South Dakota, 46 percent.
At Coleman's urging, state FmHA director John O. Foster has agreed to alter the guarantee program to make it more attractive to reluctant bankers. The congressman also is urging Foster to change Missouri FmHA direct loan spending rules so that counties whose money is depleted can draw on surpluses in other counties. Even though the state still had about $15 million of unobligated direct loan money in early March, many county offices' funds were depleted and loan applicants were being turned away.
"Unlike some other states, Missouri unwisely allocated its FmHA loan money on a county-by-county basis. The result was that we had some counties that had run out of money and people were standing in line, while other counties had money for which there was no demand," Coleman said.
Under administration policy, Missouri can qualify for none of the new money released by Reagan earlier this month until all its direct loan funds are gone and it can show that its guarantee program is working.
Foster said the state's problems were made more acute because Washington cut the state's allocation for direct operating loans this year, putting more emphasis on the loan guarantee program, in which commercial lenders here have shown little interest.
Less money for the direct loans, in combination with greater funding demands from farmers who are turned away by commercial banks and the farmer-owned Farm Credit System, has put additional pressures on the county FmHA offices.
"More than half of our loan money is for guarantees, but it is not a success. Banks are reluctant to do the guarantee. They don't really say why, but they seem to have decided that they can put their money elsewhere and make more money, with less grief," Foster said.
At the Trenton State Bank, one of the area's largest farm lenders, president Curtis LaFollette and vice president Jim Cox said their biggest problem with the guarantee program is the large amount of paperwork it causes.
"If the farmer has a good financial statement and if I know him and his operation, it still takes at least half a day to fill out all the papers," Cox said, hefting a two-inch folder containing the documentation for one guarantee. "For most banks it has been easier to just send the farmer to FmHA for a direct loan than to bother with a guarantee."
LaFollette added, "We've gone the extra two miles to deal with most of the farmers who come in here . . . . We are talking about friends, good honest people who are caught in a dilemma not of their own making. We must have sent about 10 farmers to the FmHA last year, but we didn't close them out."
"A lot of these farmers have given up and have reconciled themselves to that fact. We all look to government to help, and yet the assistance seems to be less. I don't advocate that every heavily indebted farmer be allowed to continue in farming, but it bugs me that we are still giving money to so many foreign countries and here we are, letting an entire industry down. There's an unfairness in it."
Darrell Shelton, FmHA supervisor in neighboring Mercer County, one of the northern region's hardest-hit areas, said, "Confidence was renewed somewhat with our good crop last fall, but a certain number of farmers are now resigned to the point that they're not going to make it. The feeling is that there is little left to fight for with the continuing decline in asset values."
Nearly half of the FmHA's 212 farm loan accounts in Mercer County were overdue on Jan. 1 and about a tenth of them had made no payments on their debt in three years or more. In Mercer alone, the FmHA holds 5,427 acres of repossessed land on 18 farms, which it keeps off the market to avoid depressing lest prices be depressed further. A University of Missouri survey that found that 26 of the 1,672 farm bankruptcies in the state since 1981 occurred in Mercer.
Vernon Hanes, who farms more than 1,000 acres south of Trenton, agreed that his hard-pressed farming neighbors are resigned to their fate, but he cautioned that the silence not be misunderstood.
"The answers we hear from Washington don't get it. Nothing they have done so far will solve the problem," Hanes said. "There is no one else to blame but this administration. Farmers were in relatively good shape in 1980. I think these people are just beginning to fight. It will show up at the polls this fall. I think things will change."