Plight of a Millionaire Farmer

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Some Democrats make an issue of John Block's borrowing

You are not the first farmer to be in financial difficulty primarily through no fault of your own." Thus wrote Senator James Exon, a Nebraska Democrat, in a letter that was probably intended to needle rather than console. The recipient: John Block, a millionaire hog farmer from Illinois who also happens to be Ronald Reagan's highly respected Secretary of Agriculture.

In fact, it is by no means sure that Block is in any serious economic trouble; Block dismissed all criticism as "political sniping," and the most he will concede is that his finances are "complicated." But, like many another farmer, he borrowed heavily to expand during the years of rural prosperity and is now being pinched by the same combination of high interest rates and falling land values that bedevils much of rural America. In the process, Block is becoming for certain farm-state Democrats a deliciously ironic political symbol of agricultural troubles that persist despite the Administration policies that Block helps to set.

The Secretary's financial-disclosure statement for 1983, made public in May, indicated that the farming partnerships in which he has an interest obtained unsecured loans totaling about $2.5 million, most of which appear to have been assumed since his nomination to the Cabinet. Exon and Congressman Tom Harkin, an Iowa Democrat who is running for the Senate this year, wondered aloud whether banks were showing favoritism to Block at a time when, as Block's critics say, other farmers could not get credit on any terms.

Block, who was in Japan last week to promote U.S. farm exports, told TIME the loans were rollovers of borrowings first taken out before he became Secretary. Midwestern bankers and economists confirm that banks made many unsecured loans during the 1970s to farmers who, like Block and his partners, bought land that was rising in value, and the banks willingly renewed such loans in the early 1980s. Says Richard Kohls, professor of agricultural economics at Purdue University: " The banks treated Block just like they did other farmers."

Nor does Block seem to have received any special break after the agricultural economy turned sour. He and his partners paid interest rates of up to 19.5%. Now that the value of farm land is falling,* banks are demanding collateral on formerly unsecured loans to their farmer-borrowers, including Block. The Secretary's press aide, John Ochs, says that since Jan. 1, Block has put up collateral on "most" of his loans. Just where all that leaves his personal finances is uncertain. His disclosure statement lists assets worth somewhere between $3.6 million and $4.8 million vs. liabilities of between $6.8 million and $9.7 million. But the statement could be misleading: it includes the entire debt of partnerships in which Block is involved, but only his proportional share of the assets of those partnerships is tabulated.