Guest commentary: We need a farm foreclosure moratorium
Over the past month, Minnesota and our country overall have been focusing on two co-occurring crises: the COVID-19 public health emergency and an economy on life support. Our state is taking the necessary steps to maintain public health by extending our “stay-at-home” order, and has taken significant steps to help small businesses by providing SBA loans and by expanding unemployment insurance to make sure frontline workers who contract COVID-19 on the job have access to workers’ compensation.
But a number of our rural colleagues in the farming profession beset by plunging prices and the added stress of COVID-19 need another precious support: time. Specifically, an additional 180-day window to work through mediation before banks foreclose on their farm business.
This economic crisis comes at a time when requests for farm mediation are at their highest levels since the farm crisis of the 80s. In recent years, 85 percent of farmers who have entered the mediation process have been able to make a deal with creditors to consolidate debts, avoid foreclosure and keep farming.
Right now, as we all are working to protect our own health and the health of our communities by maintaining social distance, a farmer cannot have that critical face-to-face meeting with creditors. As a result, if a notice from a creditor is received, it is much more likely that a foreclosure is imminent. Right now, we farmers need more time in that process. It would enable us to have these face-to-face meetings safely, reach agreement with creditors, and keep farming.
The recently passed CARES Act has provided farmers some protections to counterbalance the current depressed markets. A bright spot in this package is a dedicated pool of funding for farmers raising food for local markets. We need this now more than ever. These farmers, representing a new and more diverse generation of farmers among us, are not as well protected by Farm Bill support programs as their more traditional farm colleagues. They continue to create and build the local foods infrastructure based on community resilience and connection during this challenging time when we are advised to keep a distance.
The CARES Act also steers financial support from the Commodity Credit Corporation to traditional family livestock and dairy farms, although just how this will be used and where it will be directed is not yet clear. The need, however, is critical.
The outbreak of COVID-19 has exacerbated the farm crisis that traditional small to mid-sized crop and livestock farm families have been navigating for over six years. The prices that farmers are getting for their products have been dropping across the board, with the largest loss being felt by milk producers, who’ve felt recent price drops of up to 36 percent — even while demand for milk is high.
A similar situation is affecting beef producers. Processor margins have leapt with the soaring demand for beef due to the shelter-in-place orders, yet farmers that raise this beef are operating at a net loss. Add to this an alarming disconnect between cattle cash and futures markets as well as a continued uphill fight by farmers for Country of Origin Labeling (COOL) in order to gain more market access in a U.S. meat industry where just four companies control 85 percent of the marketplace. That adds another layer of stress weighing on farmers who are now talking to lenders in an attempt to farm another season.
At risk in this pandemic are the foundations of our rural communities — traditional small and mid-sized family farms, as well as a newer generation of farming professionals knitting together a stronger local foods economy. We need to work together to ensure support from our public treasury during this crisis builds the type of food and farming system we want to see on the land.
During this crisis, we have seen some incredible examples of leadership from our governor, local officials and a Legislature working in an unprecedented bipartisan manner to address and support those among us hardest hit by COVID-19. We now look for that to continue and ask the governor and Legislature to impose an immediate time-out on farm foreclosures so that farm families can focus on staying healthy and weathering the worst of the depressed prices as they look to another farming season. Again, 180 days for farmers in mediation to demonstrate a positive cash flow and come to an agreement with lenders could make all the difference.
We all need more farmers, not less. And COVID-19 should not be the reason that farmers already in economic crisis have to call it quits.
Submitted by Land Stewardship Project farmer members:
Jon Jovaag, Austin
Leon Plaetz, Wabasso
Nick Olson, Litchfield
Tom Nuessmeier, Le Sueur
Mike Gilles, Ridgeway
Joel Odie Jansen, Danube