Views from the Secretary

Views from the Secretary
The Failed Farms

During prolonged drought, some farms and ranches fail, meaning their owners are forced to sell something they otherwise would keep in the family.

It is a sad thing to hear about, and still more sad when the farm's owner resorts to suicide.�That happens as often as four times a week in Australia, where a record-breaking drought is drying up much of the countryside, according to recent news reports.


"There is a sense of failure that his father, grandfather and those before him managed to cope, so why can't he?" the one farmer reportedly said of the drought victims who lost hope in the future.

I know people who were unable to keep their family farm or ranch in South Dakota.�Some have a similar feeling of failing their ancestors.

There are many good reasons why a farm or ranch supported previous generations but may fail to support the current one.�

Being forced out of business by prolonged drought is certainly not a personal failure.�Entire civilizations have "failed" (been forced to relocate) due to prolonged drought.�There is no defense against no water.�

Also, many things have changed.�In grandpa's day, agriculture was labor-intensive.�Today it is capital-intensive.�Grandpa did not face monthly bills for ordinary expenses like food (they grew and canned their own), water (it flowed from an artesian well or was pumped by a windmill), clothing (grandma made much of it), electricity, heating fuel and other modern necessities.

Like it or not, both rural lifestyle and agriculture require significant cash flow just to keep the wolves from the door.�There were no wolves at grandpa's door, but he had a loaded rifle sitting by it just in case one showed up.

There is another difference.�An acre of ground was once valued by what it could yield.�An acre of ground that produced $80 worth of corn could be bought for $60. The same acre may now produce $300 worth of corn, but it takes more than $1,000 to buy it.�

Artificially inflated land prices are hurting many farmers and ranchers, especially the young ones.�Inflated prices increase the risk of a financial crisis when a disaster hurts cash flow.� That's one reason some of us favor the idea of a government-sponsored income insurance program for farmers instead of a crop subsidy system.

People facing the difficult decision to sell a family's farm or ranch may not feel better after hearing the reasons why one generation could survive and another can't, but I hope they do.

If you know someone facing this problem, help them preserve their hope.�The immediate future may look dim, but no one knows what tomorrow will bring.�

A failed farm does not always mean the farmer failed.� What we all need during hard times is faith in the future.�Save that, and everything else will save itself.

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