A Publication of WTVP

Darwin L Runyon has been the manager of the Peoria County Farm Bureau for over ten years. Raised on a farm in Lincoln, Illinois, he received a B.S. degree in agriculture from Illinois State University in 1983. Following a brief internship at Growmark, he became a manager trainee for the Farm Bureau, but after a brief two months assumed the position of manager of the Peoria County Farm Bureau. Runyon is also the Republican candidate for the Illinois House of Representatives from the 91st District.

How were you able to become manager of the Peoria County Farm Bureau the same year you graduated from college, after only a brief orientation to the organization?

I came to the Peoria County Farm Bureau after a sudden resignation by the former manager. The Bureau had some rather deep internal problems of long duration among the membership. No one else with experience in Farm Bureau wanted to take it on. I came to Peoria as a trainee and four months later was hired as the manager. I’ve been here for over ten years now, the longest tenure of a Farm Bureau manager in Peoria County in a quarter of a century.

Sometimes the agricultural sector gets overlooked when people think of “business.” How does agriculture differ from, and in what ways is it similar to, the business sector at large?

In almost all respects, agriculture is run like every other business. The business principles are the same: financial, tax, regulatory, production, etc. As a generally small business, there isn’t a lot of employee management in agriculture. As in any other small business, the standard sectors of capital, management, labor and materials are not as easily defined. This raises certain problems, since the manager is also the stockholder, who is also the laborer.

The agricultural industry is the business of being a raw commodities provider, similar in some ways to mines which provide the raw materials for steel. We are at the beginning of a long chain of events, which means we have a limited ability to set prices. Everybody takes their but throughout the chain, and what’s left belongs to the farmer.

Agriculture is probably the only business sector for uniquely dependent on the weather. Other businesses seem to be able to exercise more control over their own destinies than can agriculture. It’s tough to lobby for good weather, isn’t it?

In most other areas of manufacturing, much of the risk can be transferred or insured against. The weather is something over which there is very little control. Crop production is totally dependent on the weather. The important thing for most farmers is to be able to have a game plan. Those who are able to plan ahead for most scenarios and build a reserve are the ones most likely to “weather the storm.”

The trend in agriculture for several years has been fewer farms and larger farms. What is the economic impact of this? Is the family farm disappearing in America?

The family farm is not going to disappear; it’s going to evolve like other businesses. There are still family-owned grocery stores today, but they are dramatically different from the family-owned grocery stores of the 40s and 50s. Farmers today are going to have to continue to adapt the organization and operation of the family farm or they will be out of business. We have a member farm family that farms over 5,000 acres; we have others that farm 200 acres…so family farms can differ greatly.

In agriculture we see things continually evolving as in any other business. Some farm land is owned by corporations outside of the agriculture sector. We will see more corporate stockholder investments, but that’s really just a variation of what we have always had; we’ve always had absentee landowners who had either retired, bought land as an investment or inherited it. They are basically a stockholder who owns the ground while someone else farms it on a cash rent, sharecrop, or fee-for-service basis.

Farmers do have something to say about how things are going to evolve, however. If we don’t address the issues, someone else will address how it’s going to happen.

How much Peoria County farm land is owned by absentee landowners? How much foreign investment is there?

Foreign land ownership is very small, probably less than half of one percent. I would say that over 50 percent of Peoria County farm land is owned by someone who does not farm the ground. Many of these landowners are retired farmers.

In this area, more than in many other areas, there are a lot of professionals who have purchased farm land as an investment, as a hedge against inflation, for example, or with an eye toward development. These individuals are sometimes despised by active farmers who are trying to buy ground, but it takes all kinds of owners to keep the process healthy. I guess I view this kind of investment as providing some sort of safety net; it helps provide some liquidity in the market. Whenever you have only farmers in the market, and there is no incomes that year, then no one can afford to buy land, and sale prices of land are going to drop dramatically. That not only hurts the person who is trying to sell, it hurts everyone who has to valuate their land for loan purposes.

In the 1980s, there were a lot of people forces out of agriculture by banks, not because they weren’t making their loan payments, but because their collateral just disappeared. We had farmers who made every payment on time with no problem, but because of regulations, the banks had to sell them out. That is a situation where outside investors can help. To a degree this kind of investment is opportunistic, but it helps keep land prices somewhat stable.

What is the economic impact of the agricultural sector on the Peoria area?

Agriculture doesn’t have the direct impact on the local economy that is had years ago. Caterpillar, the medical field and other industries have overtaken it. But it is significant in the local economy for several reasons. It was agriculture that built Peoria. In fact, Caterpillar started out providing tractors to the agricultural community.

Agriculture is a base which will always be here. It’s not going to wither up and go away over time. Another advantage of the agricultural industry is that you can pick land up and move it. Other industries may come and go, but agriculture – grain production at least – can’t pick up and move.

Livestock production has shifted somewhat away from our area, and there are two reasons. Number one, many people look at this area as one better suited for grain production. Number two, wages in our local area are much higher than in many other rural areas of the state. Grain production is a seasonal occupation. So grain farmers can both farm and hold a job in town at Caterpillar, Keystone, Komatsu Dresser, or someplace else. They can make more holding an outside job in the off-season than they can raising livestock full-time. That’s why we have seen a loss of animal production in our area. There are many farmers who depend on those outside jobs.

What about commodity prices for the farmer? Given the relatively small increases in commodities prices over the years and the huge capital investment made by farmers, the profit picture would seem difficult.

Basically from World War II until 1979-1980, farmers were constantly increasing productivity, yields, and the amount of acreage farmed. In 1973-73 we suddenly became marketer to the world because nobody else had the resources or expertise. That shot our prices above where they should have been and, as a result, we saw a lot of people stay in farming who would have normally left the farm. They were able to stay because of a wide profit margin.

Most farmers cite the Carter grain embargo as blowing things apart. I don’t think it was the only reason, but it combined with several other things, like 20 percent interest rates, to send a shock wave through the agricultural community. The export community suddenly decided that America was not necessarily a one hundred percent reliable supplier. About that same time we suddenly saw other countries, who were net agricultural importers, decides that they would try to produce their own products. Just like in any business, when there is too wide of a profit margin, somebody starts saying, “Wait a minute, it’s not right for them to get all this money.” As a consequence, we started seeing some of our net importers suddenly become exporters – become our competitors.

Through the ‘70s the government kept telling farmers to produce more and more because we had a whole world to feed. We did exactly what they wanted us to do; we geared up production. Then suddenly in 1980, we weren’t the preferred source any longer. So through the 1980s we saw a deflationary period; the market had to get rid of all those people that should have left farming by didn’t. That brought everybody down. It was a gut-wrenching ride. The government pumped a lot of money into agriculture in the late 1980s. Did it help? Well, it didn’t solve any problems. It brought some stability. It allowed a more orderly exodus.

We’re still suffering from the phenomena of the bigger getting bigger and those who aren’t so big either quitting or turning to the part-time route. We’re fortunate in this area to be able to do that. In some rural areas of the state there are no off-farm employment opportunities.

What are the pluses and minuses of government intervention in agriculture, including farm subsidies?

Because of the way I was brought up, I don’t see a whole lot of value in government help. That’s not necessarily Farm Bureau’s opinion; it’s mine. I guess I’m a firm believe that if anybody can screw it up, government can.

I guess there was a certain need for the government to step in, given what they did to agriculture in the 1970s, which was tell the farmer to go out there and tear it up, produce, and plant every acre to corn and soybeans. Because the federal government did that, I can agree that they had a responsibility to help agriculture clean up the mess when we had to downsize.

The problem is, those large federal outlays have brought attention to agriculture by sectors that have other agendas. In the 1995 farm bill, it will be the environmentalists. They will be taking an active interest in the Food Security Act. Their goal is to get all of the environmental abuse beat out of agriculture. We’ll see a farm bill that will be more environmental in orientation than one dealing with farm stability and farm income. There will be a very large cost to bear because the government helped us in the 1980s.

The environmental community has basically targeted big business for the last 20-30 years. When you want to make a regulatory changes, you go after the biggest first. Then you work your way down. We’re at the point now where agriculture is the only industry left on which they haven’t had a meaningful impact. A few years back their actions would have been perceived as picking on a lot of little farmers. These efforts are going to continue to hurt income.

We have been able to address and correct some of the environmental problems when it comes to livestock production. Unfortunately we have to put ourselves in a position where now animal rights groups are trying to take the right to control some of these conditions from farmers. We can appreciate their desire to help animals, but unfortunately they don’t understand the nature of raising those animals. They are well meaning. However, the needs of a dog or a cat as opposed to the needs of a pig or a cow differ dramatically. That’s been a big challenge to us.

While ethanol production creates a significant market for agriculture, the debate over ethanol continues at the federal level. What is your assessment of the situation?

We in agriculture are going to continue to fight the ethanol battle as long as we have breath. We have to, because ethanol has grown to be a fairly sizable market; it shows a lot of promise for the future. Our opinion is that ethanol is environmentally positive. Of course, big oil is saying it’s not.

I take somewhat of a different view about what needs to be done. Short-term, the only recourse we have is to fight the legislative and regulatory battle. However, I’m convinced that this whole issue would go away tomorrow if somebody could come up with a way to produce ethanol at a cheaper cost per gallon than distilled gasoline. I believe that whenever you can go to Amoco or Shell and offer them a product that is cheaper than refining crude oil, they’ll jump on it. At that point, we would be able to produce enough of it. My observation has always been that when there is an economic advantage, you can get things to happen at a much more rapid pace than when you pursue the legislative and regulatory route. A case in point is no-till and minimum-till farming. There had been a big push from an environmental standpoint to get that started. It was very difficult, but there were a few farmers who believed it was the future, and they worked long and hard to make it work. Now that the kinks have been worked out and there is a definite economic advantage to pursuing no-till, we’ve seen an explosion of no-till farming. In America, economics can bring about change at lightning speed in comparison to regulatory and legislative efforts.

What are some of the key trends to watch in agriculture as we move into the next century?

More and more production, for better or worse, seems to be going to contract production. The poultry industry, for example, is pretty much all contract now, with big poultry processors like Tyson. These companies basically supply the feed and the birds; the farmer provides the facilities and some of the management. It’s totally contract work; the farmer gets paid so much per bird per day. If production on the farm drops below a certain rate of gain, the farmer is penalized as part of the contract. We are seeing contract production rapidly explode in the hog industry as well.

We’ve always had some contracting of seed stock in the grain industry. We’re starting to see more and more individual varieties of grain being raised on contract rather than for open market bidding. I think we’ll see more of that.

Marketing products has always been the farmers’ weakest point. They’re very good producers. They spend all that effort learning and working, but once they get the grain in the truck, they just haul is to the elevator and that’s the end of it. Up until the last ten or fifteen years, that system worked. Now, those that are surviving and thriving seem to be getting more aggressive in the marketing of things.

Obviously we need to continue to do agricultural research. We’ll see less and less being down by government. At one time agriculture was the economy of America. A century ago, whatever was good for agriculture was good for everyone. So the federal government took it upon itself to do a lot of that work and disseminated it through the Land Grant Colleges and Cooperative Extension Services. We’ve seen a dramatic shift in focus at the federal research level. It’s becoming more consumer oriented. This means that private research is going to have to pick up the ball. It’s my belief that even though check-offs are not popular, and we have some work to do on check-offs on the various commodity products, farmers are going to need to be in the driver’s seat by financing that research. It’s something we have not down to date to any great extent. I think that’s going to grow in importance.

It’s in our best interest to find a use for our products and to build demand. Food has always been our primary focus, but we are going to have to move further into the industrial and commercial sector – supplying ethanol and pharmaceuticals, for example. That’s going to take an attitude change on the part of farmers and everyone concerned. We’re used to producing food, a staple for which people will ultimately pay whatever price they have to pay. As we shift into supplying more and more of our product for the commercial arena, we’re going to have to be more and more price sensitive. If we’re trying to compete in alcohol, for example, our alcohol from corn is going to have to be the same competitive price as alcohol from any other source. Operating in that kind of environment is quite a transition for some of us.

What exactly is the Farm Bureau? In a nutshell, what does it do for area farmers?

Many people confuse the Farm Bureau with a government agency, which we are not. We are a private membership association. I call us the “chamber of commerce” for agriculture; that seems to be the quickest way to explain it. We are involved in member education and member services. We assist members in working their way through federal regulation or any problems they might have. We act as an advisor and research issues of public policy, determining how we think something will affect agriculture. Our members pay dues to belong to the Farm Bureau and they set the policy and game plan for the organization.

Farm Bureau has the reputation of being anti-everything. That’s a myth that I would like to address. We are conservative, and we think out grounding in agriculture gives us a little more of a level head sometimes.

One of the big issues that people know us for is the river conservancy district issues. We worked very hard to defeat that. However, since that time, everyone else who was opposed to the formation of a rover conservancy district has walked off and gone on to other things. We continue to work with the Heartland Water Resource Council. We have two representatives on that board. We have proposed working together to identify a structure of government that can do everything that needs to be done to address the soil conservation concerns, but which doesn’t have all the shortcomings of all the related functions, which we thought the river conservancy district would have. We are going to work on a soil conservation sub-district based on watershed boundaries. The property owners would pay a property tax, elect a board of trustees and work together to address the soil and water management concerns.

We do continue to stay involved and try to find solutions. We’re a firm believer that you don’t fight for something without coming up with an alternative solution. We get involved and stay involved.

You are the Republican nominee for the 91st Illinois House District. How did you become involved in this political race?

At the Bureau, we keep up with political issues and candidates. Last fall I kept looking for a Republican candidate to surface for the seat being vacated by tom Homer. A month before the filing, nobody had come forward. I thought it was terrible that no one was going to run and make a good contest in the election. I made the comment to Farm Bureau member Jack Stevens that I had half a mind to run myself. By the time the conversation was over, I was seriously considering it. I then talked to Representative David Leitch, who got my petitions. We talked about the idea at Farm Bureau, and the question of a possible conflict of interest or a conflict in priorities between campaign and job. Finally they told me to get busy and get my petitions out. Now that the primary election is past, we’re concentrating on the November election.

It would be expected of you to be concerned about issues affecting agriculture. What other issues are of top concern for you?

Obviously, I’m most familiar with agriculture’s problems. However, I believe that agriculture’s problems are everyone’s problems. We have such a layer of regulations and bureaucracy that it’s almost impossible to follow all of the rules and be in compliance with everything. I’m a realist about what I might be able to contribute in Springfield. One person can’t go down there and clean house and make everything right. I just hope to go there and bring some experience in from the outside to try and deal with some of the regulations and red tape.

One of the big questions asked by the farm community is “How can you go down there and deal with all the pressures of the special interest groups while remaining true to your convictions?” Well first of all, Farm Bureau is a special interest group, so I have experiences with some of the tactics. Number two, my grandfather raised me to be honest, and if I can’t do that, I’ll just come home and let someone else go down there.

The 91st District is heavily agricultural. It is also traditionally heavily Democratic. How will these factors play out in your race for a seat in the State House?

When you go back and look at how people in the district vote, you find that they vote Republican when they have an opportunity to do so. They will vote Republican when they see a candidate they like. They did it with Edgar and Ryan in 1990. It boils down to who they think can best serve them. I think my experience in working through the system with volunteers will be appreciated. One of my main reasons for running is to give people a conservative, common sense alternative in November. Now they have that alternative. IBI