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[MUSIC PLAYING] JOHN RABY: Good morning. I'm John Raby. Welcome to a special broadcast on Minnesota Public Radio. It's my pleasure to introduce your host for the next two hours, Tom Rothman, farm director of the Minnesota Farm Radio Network.

TOM ROTHMAN: Thank you, John, and good morning. And welcome to FarmFest here in Southwestern Minnesota. This is a special Main Street radio broadcast on Minnesota Public Radio. It's the third of four citizens forums examining Minnesota agriculture.

Our series is a joint effort of MPR, KTCA Public Television, the star Tribune Newspaper, and the University of Minnesota Extension Service. Our topic during the next two hours is just how important is a strong rural economy to Minnesota. The agricultural economy is in the midst of a serious downturn. What does this mean for the rest of the state? And what is the future of our rural communities in Minnesota?

During the first hour of our program, we'll discuss the issue with University of Minnesota Extension Farm management specialist Erland Weenus of Worthington. Marcy McLaughlin of Minnesota Rural Partners. She is from Morton, not too far from the FarmFest grounds. And Willis Anthony, a farmer from Nicollet County in South Central Minnesota.

We'll take questions from our audience here at FarmFest with the help of Kent Thiesse of the University of Minnesota Extension Service and the Minnesota Association of Counties. And from Laurie Sturtevant of the star Tribune Newspaper.

And we invite our radio listeners to call in with questions. Our number is 1-800-537-5252. The number again is 1-800-537-5252. Our program is also being fed to about two dozen extension service offices around Minnesota for a further discussion of this issue. Erland Weenus, let's start with you.

We've seen a lot of ups and downs in the farm economy over the past many years. The 1980s were called the farm crisis years. Just how serious is the situation now facing farmers and other rural residents?

ERLAND WEENUS: Well, Tom, we're facing another one of those periods of trial. And this time, it's not due to price collapse in terms of land prices and that type of thing. It's due to poor prices. And it's having a strong impact on our rural communities.

Farmers basically are the basis of strength of the rural economy in most of Southern Minnesota. And they've been struggling for some time now. If you look at data from the Southwest Minnesota Farm Management Association, income dropped more than $30,000 last year from its 98 versus 97 to an amount of about $8,000 per farm, which is just not sustainable in the long run.

That's one of the lowest earnings figures we've had in 30 or 40 years. It's a real problem and it's very low. The reason for that is basically prices are low. We've had terribly low hog prices, we've had terribly low corn and bean prices during that period. And that's had a significant impact on the viability of many of our farm businesses.

Many farms have quite a bit of debt. The profitability hasn't been very good for the last five or six years. And that debt, of course, is built up. And that's posing a problem today when you don't have adequate income.

This economic downturn, of course, since farmers are kind of the base of many of the rural economy, much of the rural economy in Southern Minnesota has impacted rural towns. I've talked to several businesses in terms of feed retail machinery, hardware, furniture, that type of businesses.

And all of them are reporting downturns in terms of their income. Many farmers I've talked to have just stopped spending. So it is having quite an impact, I think, on most of Southern Minnesota.

TOM ROTHMAN: Marcy McLaughlin of Minnesota Rural Partners, is there still hope? Is there still hope in rural communities in Minnesota for a brighter future?

MARCY MCLAUGHLIN: Well, of course, there is. Just to be clear, as Erland said, we're talking about Southwestern Minnesota, Western Minnesota, Northwestern. That's the communities that are critically dependent upon agriculture.

But if you look at the question, How important is a strong rural economy to the state of Minnesota? We can say very. And it also needs to be diverse. If you look at Central Minnesota with tourism and expansion there, they're doing quite well.

Northeast Minnesota has the other natural resources, forestry, and mining, and there's some pressures on them. But their economy has diversified, as well as Southeastern Minnesota, right now You couldn't find sheetrock or carpenter if you wanted to.

So there is growth statewide within rural. And we need to be careful and also continue to encourage diversity among the economy in those communities. And it's going to be there that those communities that were dependent upon agriculture will find their strength.

What I'm hearing from people is that it's time to reinvent ourselves, revitalize ourselves, redesign ourselves not only as individual producers or individual small business owners within the community, but also the community itself.

TOM ROTHMAN: Willis Anthony, you're a farmer from Nicollet County. You're in the midst of this. Is there hope from a farmers standpoint that things will turn around and the future is bright?

WILLIS ANTONY: Well, I sincerely hope. There's hope or I'd give up and have an auction tomorrow. Yes, I think there's hope. And I say that on two counts, I guess. One of them is that we've had for years and years and years cycles in agriculture, in agricultural markets, in all of them.

Now we certainly didn't expect to see the downturn in the cycle that we have now. And it's a real crunch, a very severe crunch. Earland's numbers certainly bore that out and it reflects the experience that each one of us is having.

Fortunately, this time around, we don't have the level of interest rates that we had occurring during the 1980s debacle. But on the one hand, there is the cycle in markets. On the other, I would hope that this becomes another signal that we need to have a fairly significant shift in our attitude and public policies toward what we're doing in food and agriculture in the United States.

TOM ROTHMAN: We are taking questions from our listening audience on Minnesota Public Radio. The number to call is 1-800-537-5252. We have a caller on the line. Sharon, go ahead with your question, please.

SHARON: Thank you. My concern is that staff of state and federal departments of agriculture and the Minnesota Extension staff have been sleeping on the job. They have not been proactive and encouraging and leading change. Are they earning their salaries?

TOM ROTHMAN: Well, Erland Weenus here with the Extension Service at the University of Minnesota, you want to tackle that?

ERLAND WEENUS: Well, it feels like I'm earning my salary when I'm working every day. But I guess I look at this thing as something that's much larger than local extension or local departments of AG Econ or AG economics.

International competition is part of our problem. Exports are part of our problem. It's a much larger thing than I think even extension or even the state legislature can solve. It's a much larger problem than you can point at your local county. You can say you solved this problem. I think that's really not very realistic.

TOM ROTHMAN: Marcy.

MARCY MCLAUGHLIN: Well, and I'd just reinforce that these are international pressures. These are decisions that are made in Washington or even beyond. And the local leaders, the local community, the local individuals have to figure out how they deal with those decisions on that very local level.

And this is, you know, frankly, a result of some of the movements in the 1990s for devolution, to bring that kind of authority and that kind of power back to the local level. So we're seeing change in public policies, as you said will, and also the international economy.

TOM ROTHMAN: We have another questioner. This one is on our live audience here at FarmFest.

SPEAKER 1: Yes, I have with me here Ralph Novotny from Hector in Renville County. He's a farmer and he has a question for our panel.

RALPH NOVOTHY: Yeah, I guess when I came in here, I was given a survey I'm supposed to fill out. I'm supposed to grade the freedom to farm policy on a letter grade from A to F, kind of like old grade school.

But I don't know how to grade it. What was it supposed to do? It was supposed to lower grain prices so they're equal to the world level. It sure done that. But they also have always told me that grain demand is relatively inelastic.

We have economist up there. He can testify to that. If you produce more grain, lower the price, farmers are going to make less money. So what should I grade it? A or F or what?

TOM ROTHMAN: Willis Anthony, you want to tackle that?

WILLIS ANTONY: I think that Ralph was asking the question of Erland Weenus. But yes, I'll respond. Two things. One of them is that the freedom to farm policy or the FAIR Act or whatever you choose to call it seems to me to have been a reflection of a very fundamental shift in the public policy attitudes toward what's going to be done for agriculture as a matter of national policy.

It seemed to me fairly clear an indication that there was widespread belief that the policy that was put in place and the programs put in place beginning in the 1930s as a disaster act were if they had been effective at that time, were far outmoded and the world had changed and policy had not.

So number one, widespread belief that it is important to get some fundamental policy changes. The major concern that I have with what happened in conjunction with the FAIR Act is that there were three underpinnings or three parts to that whole process that were supposed to occur as a matter of public policy.

One of them, the freedom to farm bill. Secondly, was a commitment to expanding export and international trade. And very little has happened in terms of expanding trade. And if we're going to have a US agriculture that's producing at full bore, there's no way we can do it with sustainable prices, unless we have access to markets.

And that commitment simply has not been followed through in any significant fashion. A third component of that process was to have been adequate funding for research, education, and development in agriculture.

And a fund for rural America that has fundamentally not been funded. And the money that's being invested nationally for research and development in agriculture has been declining in real terms for many, many years.

Put more money into space programs, more money into National Institute of Health, more money into National Science Foundation, and less money into food and agriculture in the environment. And there's no way that we can develop sensible kinds of public policies with that kind of an approach.

TOM ROTHMAN: So does that mean A or an F?

WILLIS ANTONY: I forget the question, but I think the answer is it depends.

RALPH NOVOTHY: That's what I asked you to tell me what's right, A or F.

WILLIS ANTONY: On freedom to farm, I would grade that as a B. On the whole set of policies, I'd moved toward the D.

TOM ROTHMAN: Willis when we talk about the future of rural communities and we talk about the lives ahead for the people that live in many rural communities, whether it's on the farm or in town, what role does farm policy play in all of this?

WILLIS ANTONY: Well, farm it depends on how farm policy is formulated. I'd rather talk about food and agriculture policy because I think in today's political climate, you have to involve the whole dimension of what's going on in food and agriculture rather than simply talking about farm policy. The role that farm policy plays I think is twofold.

One of them is that insofar as federal government and to a lesser extent state government puts in place policies that affect structure of agriculture, that has a profound impact on what's happening in the rural community, that is number of farms, size of farms, where people are going for supplies. What we're doing in terms of our processing, all of that, obviously, a great impact on what's happening in the rural community.

If we're talking, however, about simply the policies that affect prices and incomes, then other kinds of policies that affect what's going on in jobs and industry and other employment in rural communities is more significant.

And not to neglect in this whole conversation what's going on in environmental policy that's affecting what we're doing on the farm and what we're unable to do for processing in rural communities.

TOM ROTHMAN: It should be pointed out why Willis makes these comments that he's a farmer from Nicola County. He's also an economist by trade. Marcy.

MARCY MCLAUGHLIN: We have been dependent on a farm policy to set the pace for rural US, rural Minnesota. And I think it's time to rethink that and give some critical attention to forming a rural policy. And then the Ag policy is part of that.

Similarly, you have decisions that are made within forestry and iron mining and economic development and industrial expansion. Those all fit under the component of a rural policy. And that begs the question to each one of us, what do we want rural Minnesota to look like?

Do we want people on the land? Do we want schools, hospitals, communities that are strong, or is that not important to the state? Well, I think all of us here probably have an answer to that one.

But I would also point out that we're not alone in the world discussing these issues. And the economic union is also trying to figure out what they are going to do within the union, where 20% of the people live on 80% of the land.

What's the responsibility for the urbanized areas of Europe towards those areas? And they did put together a CORK declaration. And I know that we are all connected by the web. And if you go to the NPR web page, I've put that on there.

One of the things that the participants in the European Conference on Rural Development have urged is to build public awareness about the importance of making a new start in rural development policy.

So it's time, once again, when we're talking about revitalizing, we need to look at those long held policies that have been around for 50, 60 years that have driven the rural economy oftentimes by default.

TOM ROTHMAN: We have more questioners here in our FarmFest audience. And also on the phone, David in Minneapolis, go ahead with your question.

DAVID: Hi. I just wanted to compare what's going on in farming a little bit with what's going on in printing and ask a question. I've been involved for years in the printing industry. And there's a lot of parallels with the globalization pressures and a lot of debt because there's a lot of expensive equipment to make.

And the fact of the matter is there's a lot of small family printers that are going to go out of business and are now because there's just too many of them. And nobody's proposing a handout for printers or a Freedom to Print Act. And I'm wondering, why is it that small family printers can go out of business? And that's OK, but small, inefficient family farms have to be taken care of.

TOM ROTHMAN: That's a question that's been asked for years. It's not an easy answered question. Erland Weenus.

ERLAND WEENUS: Well, I think we're dealing here with a vital commodity, and that's food. We are all pretty dependent upon that. That's a little different than printing. But I think the danger is if we let the structure of agriculture change to the point where it's all produced by a very few individuals, we could be easily held hostage in terms of price as to what we're going to pay for our food.

And as the structure changes over to large integrated units, that is certainly the danger. Right now we've got one of the cheapest food supplies and the best quality food supplies in the world.

Most families do not spend very much of their disposable income for that food. And that could change quite dramatically. Right now the way I look at it, we're paying a small amount at the food store and we're paying a small subsidy through our taxes to keep small farmers going and keep our food supply in broad hands. And eventually, we may discontinue this subsidy. But we may pay more in the total through paying more for food.

TOM ROTHMAN: Marcy McLaughlin.

MARCY MCLAUGHLIN: An excellent question and observation, and those that are involved with the printing in this group had a reaction to that also. I think what this demonstrates is that no matter within small businesses, you've got individuals who are investing capital, investing labor, and what they want basically is a fair return for their labor.

In printing, you have a paper glut. Suddenly, the paper makers are sitting there with a large supply. And how does that impact the Grand Rapids area and the paper companies up there?

What this illustrates is that those of us that are community members who are inserted into that community because we're small business owners or because we're community leaders, have to realize that we're in this together.

And how we support one another, either doing business, doing our local trade with one another, or seeing ourselves as a community and knowing that we need to really lock step here and move forward. So an excellent point as a small business owner myself, I've asked that question often.

TOM ROTHMAN: Willis Anthony, are farmers any different? Should they be traded differently than the other small business men and women?

WILLIS ANTONY: Well, It's a very good question and a question that has to be raised. And I was at a forum not long ago where someone who was a small contractor, and he had a couple of backhoes and a few dump trucks was raising exactly the same question.

It seems to me that-- and I've given a lot of thought and don't have a good answer. But it seems to me that the fundamental difference, it has to do with people's attitudes toward what they want the countryside to look like.

And I think that there are many of us in the United States who carry the notion that we would like to see a countryside dotted with small farms, a countryside dotted with some dairy cows and a few pigs.

And it's this notion, this vision of what rural America is supposed to look like in that concept that I think is a powerful driving force affecting policy. It doesn't directly raise any good response to the question, why should farmers be treated any differently from the printer or the pharmacy owner or anybody else? And certainly, the grocery store owner.

And frankly, I guess it's hard for me to put together an argument that says that we should be treated any different. So it's a good question, but I think it has more to do with the vision of what people think of as rural America than it does with any of the economic issues.

TOM ROTHMAN: We have another questioner for our panel. He is in our FarmFest grounds.

KENT THIESSE: Yes. We have a question and a comment from state representative Bob Ness from Dassel, Minnesota up in Meeker County.

BOB NESS: Good morning. I was just trying to put a picture to what's happening in agriculture, and somehow or other, we produce probably 90% more than we can consume. So we have to have markets.

We look at-- what I'm trying to analyze is chair of the House AG Finance Committee is, what are the mega trends that are driving the economy? And I don't hear a whole lot of conversation about those mega trends.

Clearly, we're into great specialization, great capital investment. If you look around the grounds here at FarmFest, you look at the size of the equipment and the kinds of things that are in the marketplace, you've got to ask the question, what are the mega trends that are driving this?

If farms are getting larger, some of our communities are going to get smaller, our schools are impacted, our local businesses are impacted, and the list goes on. But no one's talking about marketing.

And if we are producing something that we do not have markets or demand for the products we produce, where are we going to recognize the mega trends that are driving our whole rural economy? I've lived in rural Minnesota all my life and in different cities. And I think I pretty well understand the landscape.

But as I try and bring resolution to the profitability in agriculture, whether it's livestock or commodities, somehow or other, we have to start talking increasingly about, is there a demand in having our farmers know that when they're producing the crop, that there is a market out there and there is a price for that product?

I don't know of any other business that produces something that has really no assurance that there is some potential for a market or for a demand for that product. If you'd like to address the megatrends and the marketing side of this equation in terms we know we can produce it. We just haven't been able to sell it at a profit.

TOM ROTHMAN: Has there been enough effort in the area of marketing or loneliness?

ERLAND WEENUS: Well, I think that's an area in terms of international marketing that all we could always do more. I think the speaker pointed out several of the megatrends. But to me, the big mega trend that pervades all others is unit cost of production.

We are striving in a capitalist society and worldwide to see, who can produce products at the cheapest cost per unit. That will be the survivor. It's economics that drives this whole thing, as far as I'm concerned.

There are many other megatrends that you can bring in. You mentioned specialization and capitalization. And I think what many people are doing is they're striving to reduce their cost of production, their unit cost of production.

And one of the megatrends, I think that we're seeing to take some of the risk out of farming, one of the trends we're seeing is that of more contract production. It's been very successful in things like sugar beets and other industries.

And we're seeing more and more of a trend toward contract production where the risk is taken out of it. And a given amount of production is produced and you know where it's going.

TOM ROTHMAN: Marcy.

MARCY MCLAUGHLIN: Well, you're talking units at that point or-- the other thing that a number of rural farmers and folks that are in transition are talking about is how you market the specialty products. Now, that's not going to be an answer for this whole farm economy challenge. But right over here is the AURI, Ag Utilization and Research Institute.

Individual folks are saying, I want to go into elk production or I want to go into making candles out of soybeans or whatever that is. So as individuals, the marketing opportunities are there. We with Minnesota Rural Partners Assisted USDA rural development last year going throughout the state.

And one thing that repeated over and over again, no matter if we were in what area of the state and no matter what it was that we were interested-- those folks were interested in doing, they wanted continued assistance with marketing coordination and access for many existing and emerging Minnesota products.

That certainly would reinforce what the Department of AG is doing, what Department of Trade and Economic Development, as well as Minnesota Technologies and Auri. So just reinforcing that, yes, access to markets is critical no matter what you're producing.

TOM ROTHMAN: We have time for another caller before we break for news on Minnesota Public Radio. Joe is taking part in one of the listening sessions around Minnesota. He's at the Earl Brown Center in the Twin Cities. Joe, go ahead with your question.

JOE: Mentioned in a previous forum, Europe protects their farmers because the people of Europe have known hunger. For the most part, those of us in the United States have not. If we were to view AG as in Europe, are there practices or policies in Europe worth considering?

TOM ROTHMAN: Willis Anthony, one of the arguments that the European Union has used for many, many years in its policy is that they want to protect their farmers. Do they have a different kind of policy there? Is there something we can learn from what's going on in Europe?

WILLIS ANTONY: Well, they have a fundamentally different kind of policy, and that policy is generated because of the fact that Europe primarily and for many years has been a net importer of food and agricultural commodities.

As an importer, it's been able to put together a policy that fundamentally is a program in which they raise the barriers of commodities coming into Europe so that the price after they come in is as high as they want the domestic price to be.

It makes it relatively easy to put together public policy and programs when you don't have to expend very much in the way of tax dollars to do it. Now, for years, there has been a discussion underway regarding how long some of the European countries are going to be willing to stand still for supporting the agricultural policies of other countries.

And as the European Economic Union expands, these tensions tend to get greater and greater and greater. And whether or not they'll result in disintegration, who knows? The downside of the policy that they have had in place has been an enormous stimulation for increase in production of things like wheat to a lesser-- and wheat has then become a feed grain.

Barley is a feed grain. And the result has been they've generated the kind of production that's resulted in the European Economic Community having been in a position of, for lack of a better word, dumping the excess commodity that's been produced in some sectors into the rest of the world, further disrupting world markets.

So again, it's been a fundamentally different food and agriculture situation in Europe, and therefore, they've been able to do fundamentally different things than it's possible to do in the United States. One other point, and that is that it appears to me that in Europe, there exists not only because of this greater awareness of what happens when you don't have food.

But also because of apparently a more powerful image of what they want agriculture to look like that it has been possible to put in place the kinds of policies in countries, I'm told France, for example, where simply in order to have a rural landscape that is more enmeshed with what people want to see, they've done things in policy in order to provide for the existence of a lot more farms than has, say, Germany as another example.

TOM ROTHMAN: You're listening to a special Main Street radio broadcast on Minnesota Public Radio coming to you live from FarmFest here in South Western Minnesota. Let's take a break now for news and weather on Minnesota Public Radio.

SPEAKER 2: Writers and writing on All Things Considered.

SPEAKER 3: Ashtrays and lamps and knives and pans of boiling water are all lethal weapons.

SPEAKER 4: Two of them are just ecstatic. They're the dirty old man in the book. And then two of them are real angry because they're the dirty old man in the book.

SPEAKER 3: I used to say that I was the worst thing that a Syrian Christian girl could be, which was thin and black and clever.

SPEAKER 2: All Things Considered, weekdays at 3:00 on Minnesota Public Radio KNOW-FM 91.1 in the Twin Cities.

TOM ROTHMAN: 10:34. Today's programming is sponsored in part in celebration of wife Bonnie's birthday from husband Steve. Back to FarmFest with Tom Rothman and guests in just a moment. But first, let's get a look at the news from Greta Cunningham.

GRETA CUNNINGHAM: Thank you and good morning. The Senate has confirmed Richard Holbrooke as the new US ambassador at the United Nations. Holbrooke's nomination had been held up for 14 months, partly by an ethics investigation and partly by unrelated delaying tactics by Senate Republicans.

The post had been vacant since Bill Richardson left last year to become Energy Secretary. Holbrooke was an investment banker and is the former ambassador to Germany. A congressional report is finding fault with the FBI'S espionage case against a weapons scientist at Los Alamos in New Mexico.

The report says authorities identified a number of other suspects, but failed to identify them. It says the probe was flawed from the outset. Republican House Speaker Dennis Hastert is calling the GOP tax cutting bill a good deal for the American people.

Hastert and other Republican leaders have been rallying outside the Capitol as President Clinton visits to rally Democratic forces and the House prepares to vote on the bill. President Clinton says the tax cuts are too large and he promises to veto the package.

In regional news, Minneapolis mayor Sharon Sayles Belton says she's not disturbed by Saint Paul's efforts to lure the Minnesota Twins to Saint Paul. She says the deal Saint Paul Mayor Norm Coleman struck with Twins officials looks too much like other proposals the legislature has already rejected.

Governor Ventura said again yesterday he'll change his position on public financing for stadiums when his Alma Mater gets a new building. That's the trade-off he's offered in response to any stadium plan. Ventura says the Metrodome is 17 years old, 60 years younger than Roosevelt High School.

The forecast for Minnesota today calls for mostly sunny skies in the south, partly cloudy skies in the north with a chance of showers or thunderstorms in the northeast today. High temperatures from 75 to 88 degrees.

At this hour, mostly sunny skies reported in. Duluth reports sunshine in 69. It's mostly sunny in International Falls in 69. Saint Cloud reports cloudy skies in 72. Rochester sunshine in 71. And in the Twin Cities, mostly sunny skies, a temperature of 75 degrees. That's a news update. I'm Greta Cunningham.

TOM ROTHMAN: You're listening to a citizens forum examining Minnesota agriculture here on Minnesota Public Radio. We're coming to you live from FarmFest. Our citizens forum is a joint effort of MPR, KTCA public television, the Star Tribune Newspaper, and the University of Minnesota Extension Service.

Our guests for the next half hour are Erland Weenus of Worthington. He is an extension farm management specialist. Marcy McLaughlin of Minnesota Rural Partners. And Willis Anthony, a farmer from Nicollet County in South Central Minnesota.

We're taking your questions on our radio audience 1800-537-5252. The number again is 1800-537-5252. We are also taking questions from our audience here at FarmFest. And we have another question for our panel.

SPEAKER 1: As I have with me Randy Olson. He's a college student and a dairy farmer from Sunburg, Minnesota, which is near Wilmer. Welcome, Randy.

RANDY OLSON: Thank you. When a farmers dollar turns over five to seven times in the rural economy, value is added. When a citizen's dollar is spent at a Walmart store like the one they have up at Redwood Falls, does that dollar turn over five to seven times in the economy surrounding Redwood Falls?

TOM ROTHMAN: Well, I think that gets back to the question of the importance of keeping farmers farming. And is there a reason to keep farmers farming? Does that keep the rural economy strong? Erland Weenus.

ERLAND WEENUS: Yeah, I think as I look at it, the average farmer in Southern Minnesota spends approximately $400,000 per year in expenses. That's data from the Southwest Farm Management Association, about 400,000.

Now when they spend a dollar, whether it be at the repair shop or at Walmart or wherever, it starts turning over. It goes then maybe to the employees of that organization who turn around and spend it maybe at the local clinic or to their church or wherever it might go.

That goes, again, for salaries and expenses and utilities. And it starts turning over. I think basically in most of Southern Minnesota, a lot of it, the new wealth starts on the farm. But I think every dollar that's spent in rural Minnesota as compared to it being transported to Minneapolis and spent does add vitality.

So I don't know if you can segment out and say, well, this dollar will turn over six times and this will only turn over three times. I really don't think that's a reasonable assumption.

TOM ROTHMAN: Erland, is it any different, though, if we have fewer farmers, we still have as much land or about as much land being farmed. Does that change that equation at all?

ERLAND WEENUS: Yes, it does change the equation. We did a study in 1993 of farmer spending patterns, and smaller farmers spend more money locally than do larger farmers. If you get larger farmers, they're more apt to seek the discounts, the quantity discounts at places further away, 20, 40, 80 miles away from the farm.

So as we shift in structure to larger farms, I think we're definitely going to see a bypass of some of that money being spent in the rural community. And it's going to have an effect on our smaller towns.

TOM ROTHMAN: Marcy.

MARCY MCLAUGHLIN: Wow. That's-- I'm just kind of chuckling because I'm thinking, OK, how many farmers do I see in Walmart whose dollar might just stop right there? This reminds me of a couple of things. One is the need and the continual need for off farm employment.

Erland was talking earlier about the number of off farm jobs that folks have. And so certainly the need for other businesses, other manufacturing companies, service companies, tourism opportunities, whatever it is for the second income earner.

And again, going back to what I said about looking at this, how we're all in this together, how do we keep that money local, whether we're talking about the grocery store, the hardware store, the pharmacists, when you need your prescription filled at 9 o'clock at night when you go down to the trusty drugstore that's been there for 40 years.

When you need it filled at 2 o'clock on a Saturday afternoon, you get it taken care of in Wilmer. So again, the question is-- the statement would be we're in this together. How do we spend our money? Do we spend it locally? Do we keep turning that around no matter if you're a farmer or a person who works at artisan or a person who works at jackpot junction?

TOM ROTHMAN: We've spent a lot of time talking about the value of keeping farmers on the land and how that is reflected in a strong rural community. But do we need to talk more about, how do we keep all of rural Minnesota strong? Whether it be the local businesses, whether it be new businesses moving into particular areas. It's not just agriculture, is it?

MARCY MCLAUGHLIN: Not anymore. Not statewide? Nope.

TOM ROTHMAN: We have another questioner here at our FarmFest grounds, Kent Thiesse.

KENT THIESSE: Yes, Yes, we have Paul Sobocinski. He's a livestock producer from right here in Redwood county, out near Wabasso, Minnesota, also very active in the Land Stewardship Project.

PAUL SOBOCINSKI: My question and then I have a comment and we had some discussion in terms about the structure of agriculture here. And I guess I'd like to ask, since the question is already sort of been answered about what supports the local community more, it seems quite obvious from the panelists so far, is that many independent family farmers support the community to be more than just a few industrial farms.

My question to each of the panelists that I'd like him to ask or to answer is, what system do you support? An independent family farm system or the current trend line competing path of an industrialized corporate type system of agriculture?

And we're moving very fast in terms of the direction towards an industrial corporate system. I think the hog situation is perhaps one real good example of that. And we can see the disaster that's taking place in the last couple of years because of that movement. I'd like to have that question answered and then I'd like to follow up with the comment.

TOM ROTHMAN: Willis Anthony, this is a question that not only our panelists need to answer, but it's one that society needs to answer, doesn't it?

WILLIS ANTONY: Well, of course. And to directly answer the question, my preference is for an agricultural structure that has a lot of small family farms, period. Now, the real challenge, however, is what do we do in order to preserve them? And I'm convinced that a lot of the policies that have been put in place in order to, well, with that as one of the objectives have, number 1, not been very successful.

And number 2, have probably been misguided and wrong headed and have contributed to what's been happening in structure rather than helping in structure. So on the one hand, you have to look at, what do you like to see? And on the other, what kind of policies would make sense in order to put it in place?

Frankly, I'm convinced at this point that the only thing that's going to be effective in policy to keep a structure of agriculture of a lot of small farms is going to be government to pass a law which says thou shalt not have a farm greater than, whatever number of acres you want to put in the blank and whatever number of hogs, cattle, or whatever enterprise you're looking at.

Now, one of the things that seems to me we get ourselves into trouble with, however, when we look at destructive agriculture is to be thinking in terms of size of farms measured only in acres under production by that farm unit, rather than looking also at what happens in the livestock segment, what happens in poultry, what happens in dairy, and the whole set of other enterprises that go in place in order to make a farm.

And it isn't only acres. And representative Ness made a very observant point a while back, pointing out to the-- pointing out to us the equipment that's on exhibit around here at FarmFest. And that is the powerful driving force for what's happening in acreage operated per farm.

The first thing that happened was putting lights on tractors that expanded the number of acres operated per farm. The second thing was calves, and the third thing was 400 horsepower tractors.

TOM ROTHMAN: Erland Weenus, did you want to add to that?

ERLAND WEENUS: Yes. Well, I also grew up on a family farm. I worked with family farms all my life. And I'd like to preserve them. But we are fighting an awfully strong tendency, and the law of economics, as I said earlier, low unit cost production. And there may be more efficient ways to do it. And that's what we're fighting.

I think when we get right down to it, it boils down, we as a society have to have to either socialize agriculture and say we're going to guarantee you a living for being out there, or we're going to let the law of the jungle take place and those that can produce it the fittest.

For 60 years, that's been our policy. Let's let those-- let those survive who can do it the cheapest. And I don't see a clamoring, very many people clamoring for change in that. So I I'm a little fearful we're not going to turn it around.

TOM ROTHMAN: Our questioner at FarmFest had a follow-up.

PAUL SOBOCINSKI: I guess the follow-up part of that piece is, first of all, in terms of when you look at the farm economy and in terms look at who is the survival of the fittest, in order to have survival of the fittest in terms of independent family farms or farms in this nation or in this state, you have to have open competitive markets.

And that's one of the reasons why we at the Land Stewardship Project are pushing so hard for a strong mandatory price reporting bill. So that starts to return. If you don't have open competitive markets, the one who has the most money is the one who's going to survive. And they may not necessarily gotten their being competitive.

They may just maybe got more dollars from the government trough than other independent producers. The other part in terms of public policy, in terms of the state level, the key decision that has to be made by lawmakers such as Bob Ness and our Senate AG chair, Dallas Sams, is what system are you going to put most of your dollars to? And a golden opportunity, for example, was missed this last session when the funding for prairie farmers co-op was dropped. Now that co-op is going ahead. It appears like it's going to be successful and get off the ground.

Received a tremendous amount of federal support. And it also had some other types of assistance at the state level. But there's a choice. There's a choice at the state level. For example, at state public policy. Are we supporting 1,000 or 2,000 cow dairies? Or we're going to put more support in terms of helping independent family farmers to be successful and lead in that effort? And I think that's the piece that has to happen both at the state and federal level. Thank you.

TOM ROTHMAN: We have another questioner this from our radio audience. Mary, go ahead with your question, please.

MARY STEARNS: Hi. I'm Mary Stearns at the Saint Paul Earle Brown Center. Mr. Anthony, how can inner city suburbia citizens help support Minnesota rural community farmers while buying products at local food stands, Minnesota grown and stores, organic products, or buying a share of the farmer's produce help?

TOM ROTHMAN: Willis Anthony.

WILLIS ANTONY: Certainly it helps. And if the question is, how do inner city consumers directly affect what's going on in agriculture and in terms of the demand for commodities?

I see public efforts aimed at generating a better and better environment for farmers markets, for a better and better environment for growing organic foods, if that's what people choose to buy and grow. And it does provide for a richness in the fabric of rural communities and agriculture that would not otherwise exist.

Having said that, it seems to me that if one looks at a typical-- what I typify as an inner city resident who is trying to buy food as cheaply as possible in order to stretch the dollars as far as possible in the market basket, they're going to buy whatever they can buy at least cost. And that, unfortunately, frequently does not mean the kind of produce that we sometimes see in the farmer's markets.

TOM ROTHMAN: We have another questioner here at FarmFest.

SPEAKER 1: I have someone here who can give us some Main Street perspective. It's Mary Page. She's a business owner in Olivia, Minnesota, also a former County commissioner in Renville County. I understand, Mary, that you are the chair of the first overall economic plan for the county back in the 1970s.

MARY PAGE: Yes, I was. And we certainly recognized agriculture as our chief industry. And I've operated on that basis since. But what I'm asking the panel to do is to discuss rural development as far as diversification. Is it diversification within agriculture? Meaning some of the value added things, or do you think it has to be diversification beyond agriculture?

TOM ROTHMAN: Erland Weenus.

ERLAND WEENUS: Well, I think it has to be both, definitely. I think there's some real pluses that we can get as farmers diversify into value-added and ventures that they're putting together. But we can't stop there.

I think it's vital that we bring in as much industrial and commercial and manufacturing as we possibly can. I think if there's anything we can do is we can get our message to the metro area where there are vital businesses and say, hey, we have a good workforce that's out here ready and willing to serve you.

And I think we've got to get that type of economic activity going in rural Minnesota. If you look at-- just get a little bit out of the corn belt, get up in the highway 10 area of Minnesota who probably have a little less intensive agriculture is Southern Minnesota.

They do have a lot more industries. And it's a much more vibrant situation than as you get into Southern Minnesota where we've been so dependent on agriculture and haven't had those types of things take place. So I think we've really got to work at expanding industry into the agricultural areas of Minnesota.

TOM ROTHMAN: Marcy McLaughlin. And

MARCY MCLAUGHLIN: That work is being done. There are expansion from urban manufacturing plants out to rural Minnesota and a couple of instances. And I think you'll see that continuing.

Some information from Minnesota technologies is that there are over 170,000 people who are directly employed in technology intensive manufacturing companies in rural Minnesota. And that these jobs are some of the highest paid in the economy with an average of $35,000 per year plus fringe benefits.

And that while manufacturing employment decreased in the US at 5%, it increased in Minnesota alone with 9%. And much of that, 2/3 of those new jobs were in rural or outside the seven county metropolitan area.

Now, in order for this to be successful, those companies are going to look for strong, vibrant communities who have health care, who have an educational system in place, who have transportation needs dealt with, who have that crucial telecommunications infrastructure.

And frankly, as I visit communities, it is varied. So those that are on the ball and getting those things done are going to be the first on the docket to get those new industries.

There are people in under this tent, Tom, that because of their volunteer commitment to their community, have caused that to happen. So it's the community leaders within those communities that are saying, as we go back to the first question, is their hope.

They're revitalizing themselves. They're re-energizing themselves. And FarmFest is a classic example. If you look over at this beautiful machinery exhibit, the historical machinery exhibit, that was all done with volunteer help.

And it just added on to the desirability of this grounds, which has blossomed into a community place for people to gather, have picnics, have weddings, and certainly infuses that critical community spirit.

TOM ROTHMAN: It's up to the communities to do it themselves in many cases.

MARCY MCLAUGHLIN: I think we're in a position now where unless the individuals this under this tent, in the public offices, folks that are with the faith community, with the youth community, you've got to figure out how you're going to break down those old barriers and work together.

TOM ROTHMAN: We have another caller, Mark from Sioux Falls. Go ahead with your question, please.

MARK: Yeah, I guess I actually have a comment just in response to the gentleman who was a small printer. Can you hear me?

TOM ROTHMAN: Yes, go ahead with your question.

MARK: I'm sorry. Who is a printer. And I guess I just have a response to the difference between a small business like that and agriculture, why the government should support agriculture in the way it does.

I'm the son of a farmer who went out of business in the late '80s. I guess I would just pose to him the question, when's the last time the government imposed an embargo on his printing products and prohibited him from selling them to his customers? Well, that's what's been happening in the AG industry for decades.

And it's part of the thing that's got us to where we are today. And it's a very tangible reason why we should support agriculture monetarily because of those policies that the government has created. Thank you.

TOM ROTHMAN: Thanks for your question, Mark. Embargoes are something certainly talked about in the 1980s with the Russian grain embargo back in that period of time, '70s and '80s. It's something that the corn growers and soybean growers and a lot of other organizations continue to work on.

Willis Anthony, do you think the caller has a point? Embargoes being used as food policy, perhaps being used as a weapon in some of our foreign policy?

WILLIS ANTONY: He has a very good point. And we've had many years of very misguided international trade policy in which we have been putting together foreign policy programs, primarily, as I see it generated by the state department with little attention for commercial trade, and specifically little attention to agriculture.

We've used food as a, quote, weapon, which I don't see as a weapon at all, but that's a terribly misguided policy. And we've also not done very well domestically in terms of putting together the kind of marketing programs and resources we need in order to produce the products, the high value products in food that countries like Japan and others in Southeast Asia are willing to buy.

And we saw very recently, as late as this spring, when the premier of China came to the US and made very substantial commitments for importing agricultural commodities and went away empty handed. Again so many other things have been driving our foreign policy that it has been very detrimental to those of us who are dependent on the export market for income.

TOM ROTHMAN: We have time for another question. Russell from Minneapolis, go ahead with your question.

RUSSELL: Yes, my question has to do with organic farmer. I believe that farming has to be supported and I'm a city person. But I think also there is-- I have another feeling, and that is that I don't like to eat anything but organic foods.

I have educated myself on chemical content in our food supply. And it is not a good picture to look at. I'm just wondering, has this become an important part of the market for farmers yet, organically grown foods?

TOM ROTHMAN: Marcy McLaughlin.

MARCY MCLAUGHLIN: Organic foods are a segment of the market, probably not a very large one when you look at what FarmFest is exhibiting at this point. But you have a point here about the connection between rural and urban Minnesota. If it is our food source that connects us, then maybe we need to look on both sides of that equation to see how we might be able to make those linkages.

Also, as we in rural try to present our case to the now growing majority of the population who not only have the most people, but the most representation within the legislature and back again to public policy, we need to figure out how to tell our stories that link us with urban, suburban, and rural Minnesota.

So I guess I'd go back to my reoccurring theme that we are here as a state. And a strong rural economy is important to a strong urban economy, to an important, strong Minnesota economy.

TOM ROTHMAN: We're just about out of time for our first hour of our two-hour call in here from FarmFest on Minnesota Public Radio, part of our citizens forum sponsored by MPR KTCA public television, the Star Tribune and the University of Minnesota Extension Service.

I'd like to thank our guests, the University of Minnesota Farm Management specialist Erland Weenus, Marcy McLaughlin of the Minnesota Rural Partners, and Willis Anthony, farmer and economist from Nicollet County in South Central Minnesota. We'll continue our program here at FarmFest on Minnesota Public Radio.

JOHN RABY: Thanks very much, Tom Rothman. Back to FarmFest in just a bit as Tom said. It's about one minute before 11 o'clcock. The forecast is on the way.