Branstad: 'Agriculture is going through challenging times again'

Governor expresses rural concerns at bankers' conference

  • Photo

ALTOONA — Gov. Terry Branstad and top legislative leaders expressed concern Thursday over new challenges facing rural communities and worries that commodity prices are lagging below the cost of production even as farmers are preparing for the potential of a bumper harvest.

Branstad told a conference of Iowa community bankers the state’s farmers are facing a third consecutive year of corn prices below the production cost — a trend he blamed in part on federal policies dealing with renewable fuel standards and water regulations that have caused farmers to pull back on purchases, leading to layoffs by farm equipment makers and other economic ripple effects.

“Agriculture is going through challenging times again,” said Branstad, although he noted the situation does not compare to the farm-debt crisis of the 1980s because interest rates are much lower and there isn’t nearly the debt load that farmers were carrying then. He said he suspects there were bankers in attendance Thursday who probably had borrowers feeling some financial stress, however.

“We can’t go on year after year of having farm income depressed,” the governor said, “eventually that catches up with us.”

Branstad said he was heartened to learn last spring that FFA participation by Iowa young people hit a record and he credited the state’s Aug. 23 school start date with re-energizing participation at agricultural competitions at this year’s Iowa State Fair.

“I think interest in agriculture is growing,” he said.

However, a panel of legislators told the banking conference they expected the trend toward rural school district consolidations and sharing arrangements would continue as resources tighten and populations shrink.

Sen. Jack Whitver, R-Ankeny, said lawmakers could aid areas of the state struggling financially by cutting bureaucratic strings on per-pupil state funding to schools to allow local districts more flexibility in making choices on how best to use limited funds to educate their students.

“Until we cut some of those strings and let our local school boards do their jobs and determine how that money is spent, these schools are going to continue to struggle,” Whitver said. “If you don’t like what’s going on in your school district, it’s easier for you guys to overthrow three of your board members than it is to come and change all of our minds at the Capitol. So let’s give them the power to educate the kids locally like they need. I think that’s the No. 1 thing we could do.”

House Speaker Linda Upmeyer, R-Clear Lake, agreed with bankers’ suggestion that state economic development incentives and strategies involve all parts of Iowa, not just the major urban centers, while House Democratic Leader Mark Smith said a stronger case needs to be made for revitalizing Iowa communities facing growing pressures.

When asked about the future of having courthouses in all of Iowa’s 99 counties, the legislators said it is a very difficult issue politically to mess with county lines or township boundaries.

“I think what we may see happen first more than an elimination of counties or combining of counties will be continuing this process of having joint services” like the regional delivery of mental health services, Smith said, “and more services provided electronically to people.”

Upmeyer said she expected technology advances would usher in changes, telling the community bankers “I think we’ll naturally evolve into something different.”

Smith thanked bankers who have loaned money or granted some forbearance to health care providers being pinched financially during a “bumpy” transition to Medicaid managed care marked by some delays in service reimbursements.

“The biggest concern right now is getting paid for services,” Smith said.

Whitver said the transition from the April 1 changeover for Iowa’s 500,000 Medicaid clients is taking some time and requires legislative cooperation, not scoring political points, as the system moves from a state-run operation that was not financially sustainable to one managed by three private contractors.

“We had to make this change and we did make this change. It’s not changing back,” he said. “Now that it’s ours, we’ve got to make it the best we can. We have to come together as Republicans and Democrats in the Senate and the House and make sure that our constituents are getting the best services that they need.”

Lawmakers are slated to spend time Monday reviewing initial data for the new Medicaid delivery system.

Give us feedback

Have you found an error or omission in our reporting? Tell us here.
Do you have a story idea we should look into? Tell us here.