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Farm Hope?

By Robert Hess

There is hope for Southern agriculture.

   In the recent years that found agricultural prices bottoming out, hope is extremely difficult to find. Farmers across the South are faced with legislation that is restructuring the manner in which farms are managed. From the banning of key pesticides in the Food Quality Protection Act to the enabling of the Farm Bill of 1996, farmers are finding chances of economic success to be as elusive as the boll weevil.

   Hope, however, does exist, though not in the form of new pesticides or government aid. It can be found in the crowded basement of a building situated on the scenic agricultural campus of the University of Tennessee, Knoxville. This concealed beacon of assistance for a market that largely depended on government support mechanisms is the Agricultural Policy Analysis Center.

   APAC is an educational entity that promotes and sponsors the Agricultural Financial Impact and Risk Strategies for Tennessee project. The AgFIRST project's primary mission is to inform Tennessee farmers about the impact of policy changes, as well as the effects of different farm management strategies on a farm's financial stability. Information is gathered through the use of many types of representative farms and a computer program called FLIPSIM that creates financial models based on input from farmers and representative farms.

How does it work?

    Farmers are working to create a better market through the sharing of information that is crucial to the management of successful farms. First, agricultural extension agents select panels of farmers to meet with APAC representatives. Then, APAC collects information, from the panels of farmers, that characterizes both large and typical farms in a specific market. For example, in order to create a model of a typical cotton farm, extension agents will organize a panel with a broad range of cotton farmers and APAC will collect data on operational parameters, management policies and financial information.

    The extension agents then supply the data to APAC researchers, who develop farm models. It is important to note that the models represent a certain farm market and in no way reflect the financial information of any one specific farm. The panels are maintained by the extension agents to allow for updates and verification of data for emerging issues.

    Once the model is constructed, APAC researchers are able to use FLIPSIM to generate pro forma financial statements. These statements are then analyzed by APAC and used in issuing AgFIRST reports to farmers, farm organizations and policy makers.

   "Farmers all over the state will receive these publications, also available through extension agents and APAC, and can find the farm that most closely resembles their own," says APAC researcher Julia Davis. "When publications dealing with policy changes and other important issues are released, the information provided by us can assist farmers in making marketing and management decisions.

   "Farmers can contact APAC with issues they feel are important and request an analysis of any issue important to producers and Tennessee agriculture. APAC will then perform the analysis of the most important topics and publish a newsletter comparing the issues' impact on the farm and the farm's normal level of operation."

Why all the trouble?

    It takes a lot of work to produce financial statements for farms that do not really exist; however, this restores hope that the Farm Bill of 1996 nearly destroyed. When government price supports fell, farmers suffered. Crop prices remained high through 1997 due to stable markets and the gradual weaning of government price supports. However, starting in 1998 farmers experienced price drops to levels that were unimaginable four years ago. To make matters worse, low prices on agricultural products are projected to continue through the 1999 havest season.

   Without government price supports and guidance, farmers are finding that day to day management decisions have a greater impact on their financial stability. APAC researchers are able to step in where the government has fallen out. With financial data generated from the representative farms, APAC is able to provide information through the AgFIRST project for farmers and agricultural extension agents to assist in making improved management decisions. These decisions can be as simple as whether to lease or buy a new combine, or as complicated as which pesticide will increase yields this year. Market projections are also available, enabling farmers to better plan for coming years.

    Is APAC-generated data for farmers alone? No, policy makers and politicians also stand to gain from the program's innovations.

   "Legislators can use this project as a tool to help determine potential effects of policy changes before passing them, or as a deciding factor against policy feasibility," Davis said.

   Whenever new legislation is proposed that will potentially effect farmers, APAC researchers can review it and offer feedback on possible drawbacks and benefits. This will not only allow for more informed policy decisions but also prepare farmers for the affects potential legislation could have.

Where is AgFIRST today?

   The AgFIRST project has currently developed nine representative farms across Tennessee, including typical and large grain, cotton, tobacco and dairy farms. Several of these farms are geographically-based and may be represented in several areas of the state.

   Plans for expansion include the development of models of large dairy farm, typical beef farms and farms typifying small, part-time operations for beef and tobacco.

   APAC also plans to seek funding for more intensive investment in farm development. No funds are specifically earmarked for the AgFIRST project at this time.

What does this mean for the South?

   The impact of the AgFIRST project may not be immediately felt, but its presence will certainly be noticed. The project is currently confined to Tennessee agriculture, although few barriers exist to extend it throughout the region. Neighboring states and universities throughout the South could use the AgFIRST project as a model and develop programs of their own. Farmers across the South stand to benefit, if other universities undertake similar projects.

   Southern farmers could use APAC-generated information to more effectively judge management decisions and farm policy. Though it may not be tailored to their unique situation, any model-based research will certainly be more beneficial than no research at all, according to farm researchers.

   APAC has also begun an analysis of Farm Bill 1996, dealing with the effects of low agricultural prices, and of the Food Quality Protection Act, coping with the bans of several major pesticides. These analyses will project into the coming years and will be available to help farmers make better long-term decisions.

   "APAC hopes that through AgFIRST, Tennessee can support more successful agricultural legislation, farmers can become more involved in the policy making process," Davis said, "and farmers can investigate the potential effects of economic and policy issues."

   Economic recovery for farmers across Tennessee will create a more stable market. More income in the agricultural sector will also translate into an increase in the state tax base. Increases in public funding for projects such as AgFIRST could become a reality.

   Larger environmental factors will also be open to greater exploration. Testing the effectiveness of various pesticides can be done for representative farms without spraying a single crop.

   Perhaps through the use of the AgFIRST project, farmers will be able to plant fields free of the economic boll weevil and reap the benifits of financial stability.

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