When banks call in farm loans at the first opportunity, it destroys families, communities, and regional economies
By Lisa Griffith
- From Other Words
Bruce Drinkman is a successful organic dairy farmer who milks 50 cows with his wife, Mari, near Glenwood City, Wisconsin.
Despite his 34 years of experience, the two-year drop in milk prices and four years of drought have meant no profits or savings. Last fall they were denied credit from their bank to purchase seeds to plant 55 acres in grains and corn this spring. To continue farming they cashed in Mari's retirement account but the farm was placed into foreclosure around Christmas. After repeated attempts to refinance the farm with other banks, farm credit services and Farm Service Agency (a division of the U.S. Department of Agriculture, or USDA) they were turned down by all, and did not even attempt to obtain bank credit this spring. Fortunately Bruce was able to obtain credit from a vendor to buy seed, and at the end of April he and Mari filed reorganization bankruptcy, the only means they knew to preserve their farm, home and livelihood.
A recent survey by the Federal Reserve Bank of Chicago indicated that 11 percent of Wisconsin farmers with existing lines of credit may not have credit extended next year; this is especially significant because of the a 56 percent decline in net farm income in 2009. Dairy farmers have received prices far below their costs of production for nearly two years. With eroding equity, many are in immediate danger of losing their farms.
Farmland is so valuable that local (but often not locally owned) banks call in farm loans at the first opportunity, destroying families, communities, and regional economies. Farms entering foreclosure are listed publicly, further devastating owners while notifying speculators and investors of chances to take advantage of distraught landowners...
To read the full article go to: http://www.otherwords.org/articles/banks_profit_while_our_farmers_fail