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Farming, lending was simpler in the old days

Apr 25, 2007 10:21 AM, By Forrest Laws
Farm Press Editorial Staff

I was looking through my Dad’s papers and came across the promissory note for a crop loan in March 1951. The loan, for $800, was secured by the cotton to be grown on 22.5 acres and by six cows, four heifer calves, two mules and a 1950 Chevrolet pickup truck.

That may not sound like much money for a crop, but I suspect that $800 may have seemed like a million dollars to my Dad in 1951. (I wish I could ask him about the loan and the crop, but he died in 2000.)

I also suspect many urban dwellers could come closer to identifying with my Dad’s farm than with today’s multi-million-dollar farming operations that require hundreds of times that to stay in business.

Sen. Blanche Lincoln, D-Ark., talked about the difficulty of helping taxpayers understand the investment required on modern-day farming operations after helping turn back another attempt by Sens. Charles Grassley, R-Iowa, and Byron Dorgan, D-N.D., to impose lower payment limits.

They offered an amendment to the fiscal year 2008 Budget Resolution that would have put the Senate on record as supporting a $250,000 cap on benefits. They would have redirected the savings – $1.1 billion over 10 years – to renewable energy, conservation and nutrition programs.

After Lincoln and Saxby Chambliss, R-Ga., asked for meetings with Majority Leader Harry Reid of Nevada, Senate Budget Committee Chairman Kent Conrad of North Dakota, Grassley and Dorgan, the latter “graciously agreed to withdraw the amendment,” according to Sen. Lincoln.

“This was not the time or place to discuss payment limits because the Budget Resolution is not binding,” said Lincoln. “We were able to convince them to move the debate to the Ag Committee where it belongs.” (Sens. John Isakson, R-Ga., and Jon Kyl, R-Ariz., also spoke against the amendment.)

Despite their success, Lincoln said payment limits are not going away. Both the Bush administration and Grassley and Dorgan are expected to continue to push proposals with the administration’s the more damaging of the two.

“It’s an issue that remains largely misunderstood not only in Washington – in the bubble – but also among consumers,” she said. “When you’re doing what our farmers do in the South – particularly large cotton and rice operations – it requires more investment than corn and soybeans, four to five times the investment of corn and soybean farmers in the Midwest.

“When you farm large acreages – which is what our farmers have to do to achieve economies of scale– the payments will be bigger. But all that doesn’t go in farmers’ pockets; it goes to bankers, farm suppliers and local governments to pay taxes.”

Lincoln says the administration and some interest groups talk about more opportunities for young farmers. “What father is going to encourage his son or daughter to get into farming when he has to tell them they have limits on what they can do; that they have to limit the size of their operation or their dream.”

email: flaws@farmpress.com

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