President Reagan and Secretary of Agriculture John R. Block remain confident that the programs now in place are adequate to meet the farm-credit emergency despite new figures showing that the crisis is deeper than indicated in earlier analyses. The Department of Agriculture insists that it is monitoring the situation constantly and is prepared to propose alternative programs, if needed. There is too much at stake for too many farmers to do otherwise.
The new study shows that one-third of the family-size commercial farms, the backbone of national agriculture, are in financial difficulty ranging from serious to insolvency. There are 679,000 family-size commercial farms, those with gross earnings ranging from $50,000 to $500,000 a year. They are the basic fabric of American agriculture
There are 43,000 farms in that category that already are insolvent, 6.3% of the total of family-size commercial farms--an increase of 13,000 over last year. In addition, 50,000 farms have "extreme financial problems"--that is, a debt-to-asset ratio of 70% to 100%. And about 136,000 have "serious financial problems," with a debt-to-asset ratio of 40% to 70%.
Department of Agriculture officials acknowledge that there may be nothing that can be done for the farms already insolvent. Those 43,000 farms are the likely casualties of the crisis. The real test of the federal debt-assistance program is whether most, perhaps all, of those in the other endangered categories, with debt-to-asset ratios of 40% to 100%, can be saved.