Portal de Periódicos da CAPES

Farm Families in Crisis: An Overview of Resources

1987; Wiley; Volume: 36; Issue: 4 Linguagem: Inglês

10.2307/584501

1741-3729

Elizabeth Thompson, Hamilton I. McCubbin,

Agricultural Economics and Policy

Due to the scope of the present farm crisis, the issue of farm family stress has become an area of strong interest for family life educators, social workers, counselors, and county extension agents. This article reviews current resource materials available to help educators, counselors, and others who work with rural families in an effort to support them in crisis, to facilitate their decision making and long-range planning, and to foster their problem solving efforts. The unstable economy of the United States has had a profound, if not devastating, impact upon the agricultural community and its economic base. While most farmers remain in relatively sound financial condition, in 1985 the Farm Cost and Returns Survey indicated approximately 10 to 12% (approximately 214,000 farm operations) were adversely affected by the deteriorating condition of the United States economy. In that survey, (Agricultural and Rural Economics Division, 1986), a debtasset ratio of more than 40% and negative net cash flow were used to identify which farm operations and particularly which farm families were experiencing financial difficulty and vulnerability. Most vulnerable were approximately 38,000 to 40,000 farm operators with a negative net cash flow who were already technically insolvent. The report from the 1985 survey also indicated that many other farm operations would also fail. These farm operations and farm families were not able to fully service their existing debts nor were they sufficiently solvent to achieve adequate equity to justify increasing or rolling over debt. This financial condition affecting many farm families stemmed from their inability to respond to their existing interest repayment and debt load. For example, a recent report by the Agricultural and Rural Economics Division (1986) pointed out that the problems had been exacerbated by the sharp decline since 1981 in farm family asset values which has reduced the farmers' ability to borrow to offset their negative cash flow. This same report also noted that nearly $220 billion in owners' equity had been lost through land value depreciation between December 1981 and December 1985; farm value surveys indicated that the value of farm land declined approximately 13% nationwide within a one-year period, 1984 through 1985; and that this depreciation followed a national average decline of 7.0/o for the period of 1981 through 1983; as of April 1985, land value declines of as much as 49% from the 1981 peaks were registered for parts of the Corn Belt, with the state of Iowa suffering the most severe decline, followed by Nebraska, the other low Corn Belt states, and Great Lakes states. It was also reported that dairy farms, which are predominately located in the Great Lakes states, appeared to be the most seriously affected by financial stress. Even though milk prices have fallen less than prices of other commodities, dairy farmers were more highly leveraged than other farmers and had traditionally operated on narrow profit margins. Additionally, recent declines in farm level milk