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Domino Effect as Family Farms Fail : Small Town Mid-America on 1980s' Endangered List

GOING, GONE, The Collapse of the Family Farm

March 04, 1985|LARRY GREEN | Times Staff Writer

VERDIGRE, Neb. — Main Street windows display the signs of trouble in rural America.

Notices taped on plate-glass storefronts announce the sales of farms and farm equipment: Two this week, one next week, three the week after.

Karen's Cafe is "Closed Until May" the sign says, but people in Verdigre doubt it will ever reopen.

The building that housed the only Chevrolet dealer for miles around is empty. The windows reveal a showroom floor littered with paper and one dead sparrow.

A sign in the window of Heaton's Food Center says: "Verdigre Is . . . Farmers and Businesses Working Together." But these days, Verdigre and farmers are withering together.

The town's bank failed last year. One of the two gas stations is closed. So is the self-service laundry. One farm supply store is threatened with foreclosure. Another farm supplier expects to file for bankruptcy later this week.

"I think this town is going to dry up," said Roger Jacobson, manager of the Farmers Cooperative Assn. here and president of the merchants' Improvement Club.

"It's a trying time," said Mayor and Fire Chief Virgil Miller.

And Verdigre in northeast Nebraska, population 650, is not alone.

Throughout the Midwest's Grain Belt, thousands of small towns--once the mainstay of traditional American values, grist for writers like Sinclair Lewis and Sherwood Anderson, way stations for millions who migrated from farms to urban centers--are endangered.

Small town mid-America and its Main Street businesses are being eroded by the same waves of change that are washing family farmers from the land. High interest rates, low commodity prices, a decline in foreign trade, declining land values and ineffective government programs are causing family farms to collapse at rates unseen since the Great Depression.

"If we have a 30% decline in farm population over the rest of the 1980s, as many suggest, it will mean economic and social demise for many communities," said Larry D. Swanson, former director of the University of Nebraska's Great Plains Policy Studies office.

One in Five Face Move

Agricultural economists say that here in Nebraska, one of every five farmers could be forced off the land this year.

"Some small towns are not going to be viable when this is all over with," said Mark R. Drabenstott, senior economist for the Federal Reserve Bank of Kansas City.

"There is now a real panic among small-town people who can see the end is in sight if something does not change in the farm economy," said Marty Strange, co-director of the Nebraska-based Center for Rural Affairs.

The threat is primarily to small towns like Verdigre or like Woodbine, Iowa, where the bank has also failed. In the Midwest, the family farm is a mainstay of the rural economy and there is the greatest concentration of counties that are dependent on agriculture.

Nationwide, only 700 rural counties have economies that are agriculturally dependent, but more than a third of them are located on the heartland prairies and high plains. Government studies show that rural areas in the West and Southwest are generally stable or growing.

The change for towns will come slowly. It will take a while before whole towns actually disappear. But the ripple effect of the vanishing family farmer can already be seen.

Severe Financial Problems

A recent survey by the Federal Reserve Bank of Kansas City found that one of every five rural non-farm businesses is experiencing "severe" financial problems, nearly double the rate reported a year ago. In the last six months, 2.9% of the financially stressed rural businesses have failed. That is twice the normal rate.

"Business is down 30%," said Larry Frank, manager of Heaton's Food Center in Verdigre. "A lot of people are just trying to hang on."

The collapse of rural business, coupled with the collapse of family farms, has long-term implications for local, county and state heartland governments.

The "tax base is declining, and that means it's much more difficult to maintain basic infrastructure and public services like water and roads," said Steve C. Williams, a research analyst with the Nebraska Department of Economic Development.

Verdigre, which won an "All America City" award in 1971 because of the amenities it provided its population, no longer can afford to repair potholes. It has stopped street paving and curb installation programs.

Outlook of People Suffers

"One of the most devastating things we're finding is the outlook of people in these small communities," said J. M. Whitmer, an Iowa State University political scientist who works with rural local governments.

"People feel there is no future there. It ripples into churches, bond issue votes. People put important things off for a year like school construction, road work, bridge repair."

The collapse of family farms is hurting churches too. University of Nebraska agricultural economist Paul Gessaman conducted a seminar for rural pastors recently and "learned that there was not a single small-town church that wasn't in economic trouble."

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