I’ve mentioned AgWired here before – they’re a great source of breaking news from the world of farming, as well as some good analysis and opinion. There was a pretty disturbing post there the other day, though.

Richard Brown, chairman of the Association of Equipment Manufacturer’s Small Enterprise committee, testified before Congress this Tuesday, and had some bad news about how farmers are reacting to the credit crisis, and some more bad news about the equipment business. Brown told representatives of the House Committee on Small Business that equipment manufacturers and retailers are hitting serious snags in getting the lines of credit that they need in order to run their businesses.

Brown cited an example of a South Carolina equipment dealer who had a secured line of credit at his bank, collateralized from a stock portfolio. With the market crisis, the bank froze his credit line, and Brown says he is now spending much of his time trying to resolve that issue instead of pursuing new business. Brown also says that the crisis is becoming a problem for farmers, and that in turn is putting pressure on Main Street businesses, particularly in small towns, that depend on farmers for their livelihood. Brown said “We are now seeing farmers delay the purchase of these inputs from their “normal” pre-season purchasing patterns as they are having trouble accessing credit and are hesitant to pay such steep prices. The ripple effects of tightening credit markets at a time of increasing capital requirements for agriculture will lead to economic hardships for rural America. I can also say that I personally perceive a sense of anger among rural Americans about this situation. Generally speaking, they did not buy homes they could not afford or run up huge credit card debt, but now are forced to deal with the consequences of other people’s excesses and as a consequence are losing faith in the system.”

Now, in the big picture, and long term, agriculture as a sector can survive and even thrive in down economic times. People still eat – and even if they shift from high-end organic vegetables to corn, or from prime rib to hamburger, they still purchase the agricultural products that farmers create. So I don’t join up with the doomsayer crowd who think the sky is falling; there are farms today, there were farms yesterday, and there will be farms tomorrow.

But which farms will be here tomorrow, is not written in stone. Now, I always empathize with the farmer – too much soil under too many boots in my family for that not to be the case. We’ve all known farmers who fail because, to be excessively blunt, they just weren’t any good at it. Farming is hard. But this credit crunch, which doesn’t seem to be letting up despite the federal government’s intervention, seems set to ruin farmers who didn’t do anything wrong – who, as Brown said, didn’t take out stupid loans or run up crazy amounts of credit debt. They’re just men and women who rely on being able to get at least some credit each year in order to smooth out the cash flows of what is a very up-and-down business. Farmers who can’t float a loan to buy feed are going to be in a very bad way next year – and the government needs to be on the ball here and get this situation fixed.