The extended drought and low prices for farm products have
taken a heavy toll
on many of Georgia's farm families.
"The reality is that a free market has turned into a rather
brutal affair,"
said Gale Buchanan, dean of the University of Georgia College
of Agricultural
and Environmental Sciences.
"In Georgia alone, 262 farmers have gone out of business since
the fall of
1998. More than 5,000 operators had trouble paying their farm
expenses and experienced
a cash flow during that year," Buchanan said.
Families Struggle
Farm families are struggling to hang onto the farm while they
keep creditors
at bay. But it isn't easy, according to UGA experts in the
College of Family
and Consumer Sciences.
"If you don't have enough money to go around, you have to
decide what bills
must be paid," said Ester Maddux, a UGA Extension Service
financial management
specialist.
"Creditors will usually be willing to help you find a solution
to your credit
problems because they want their money," she says. "They have
an interest in
helping you work out a plan for repayment."
You are legally obligated to pay all your creditors. But if
there isn't enough
money to go around, farm families will need to set priorities
to pay the bills.
Prioritize Bills
Maddux says secured loans must be paid first, then those with
the highest interest
rates.
"Ask yourself what you will lose if bills aren't paid," she
says.
"You can lose your property if the creditor holds the title of
the property
as security, such as the title to your car or home. Unsecured
debts, like doctor's
bills, may need to take a lower priority. But you're still
obligated to pay
them."
More farm families are taking jobs off the farm, steadying the
flow of income.
But a UGA Extension Service survey of farm families in Appling
County found
that only 36 percent received income monthly or more
frequently. Irregular income
requires careful budgeting, Maddux says.
Leaking Pockets
Another problem is the little things.
"People often aren't aware of where their money goes," Maddux
says. "They keep
track of the big things like mortgage payments. But they aren't
aware of how
much money leaks out of their pockets daily. Meals out, costly
little habits
and other items add up. Separate your household budget from
your farming budget
so you know where your money goes."
Two Web sites have more information. Go to
http://www.fcs.uga.edu/outreach/coopex/fm/farmfinance/
to learn how to manage farm family finances during a financial
crisis.
Information on the farm crisis is at
http://www.griffin.peachnet.edu/caes/agcrisis/.
Or call your county Extension Service agent to help you access
these sites.
