Farmers brace for their own economic bubble

"Farm Economy"

05/07/2008

by Greta Cunningham,
Minnesota Public Radio
May 7, 2008


St. Paul, Minn. — A new report released Tuesday is warning Minnesota farmers against taking on too much debt and paying too much for farmland.

The report from the think tank Minnesota 20-20 found that record prices for farm land and crops could be setting up an "economic bubble" for farmers in Minnesota.

Former DFL House Minority Leader and 20-20 Chairman Matt Entenza says over the past six years, Minnesota farm prices have almost doubled. He says the boom cannot be sustained.

"We think that's its crucial first of all that all the folks in the ag sector recognize that debt right now is their enemy. That these prices will burst and if they do wind up in a situation with a lot of debt they could go down," Entenza said.

Entenza said with the state and national economy weakening, it is important to make sure the agricultural economy does not collapse.

State economist Tom Stinson says Minnesota 20-20 could be overplaying the potential for crisis. Stinson says farmers have long memories and will not get themselves into the financial squeeze that led to the farm crisis of the 1980s.