Program to lure Dutch dairy farmers to U.S. turns sour

Pat Blank Mar 23, 2011

Program to lure Dutch dairy farmers to U.S. turns sour

Pat Blank Mar 23, 2011

Kai Ryssdal: Farming in this country — specifically family farming — has always been a gamble. The midwest United States used to be dotted with thousands of small family farms. A lot of them — most, maybe — have been replaced by supersized agribusinesses. Fewer private farmers translates to fewer people, and, if you play it out, a certain loss of community and sense of civic involvement.

Iowa State University set about turning that trend around. It recruited dozens of Dutch dairy farmers to set up operations in the Hawkeye State, where some wound up on the losing end of the gamble.

From Iowa Public Radio, Pat Blank reports.

Pat Blank: When Edward Reuling decided to sell his dairy farm in the Netherlands and move to Iowa, he was looking for a new start, but he wasn’t desperate for one.

Edward Reuling: We were millionaires before we came over here.

Even as a millionaire, Reuling was worried about rising Dutch land prices and stricter environmental regulations. So in 2003, he and his wife became one of a handful of families to take part in the New Farm Family project. They were flown to Iowa, taken around on buses, wined and dined, even applauded when they visited prospective communities.

Reuling: The committees, everything, how we were invited — that’s why we really decided to come over here.

They were recruited much like top-notch athletes ready to sign with a new team. The program was initiated by a Dutch company called Atlantic Business Development, with support from Iowa State University.

ISU’s John Lawerence.

John Lawrence: The people that were eligible to immigrate then had to come with money and they had to create jobs and they had to invest in those rural communities. That’s why Iowa State was involved, is to help rural development.

Atlantic’s role was to provide fee-based services. The company would charge to secure land, help with the purchase of cows and assist with immigration paperwork.

Cal Schacht heads up Atlantic’s Iowa-based office. He says the idea became reality after a new state law allowed the farmers to get a visa and become permanent residents.

Cal Schacht: The investor visa requires that a dairyman invest $500,000, which is not a problem when you’re building a dairy.

The Reulings built a new house and a state-of-the-art milking parlor. But the project also required a minimum of 300 cows. That’s about average for Iowa, but it was four times more than what the farmers had milked back home in the Netherlands. Reuling found that many animals to be a burden, especially as he realized business plans that had gotten the blessing of Iowa State were overly optimistic and didn’t match what was happening in the marketplace.

Reuling: Cows were more expensive, feed was more expensive. We couldn’t make any profit at that time.

Two of the five families who relocated to Iowa have filed for bankruptcy, including Peter Poelma and his wife. The timing of their arrival in 2007 could not have been worse: corn prices for cattle feed hit record highs and milk prices plunged to levels of the 1970s.

Peter Poelma: We had to stop farming. We turned the farm over to the bank because we were not able to pay the bills.

Poelma has returned to the Netherlands after losing his life savings. Eduard Reuling says they were reassured they would have plenty of support both on and off the farm. But that help never came.

Atlantic’s Cal Schacht admits because most of the contracts were written in Dutch, perhaps some of what was promised was lost in translation.

Schacht: I think some of them expected more help than they felt received, but we weren’t able to actually get on the farm and do the job for them. Some expected that and some didn’t.

Iowa State University’s John Lawrence says when the New Farm Family project launched, requests for information came in not only from the Netherlands, but also from Canada and other states, including California. He says no one is asking about the program now.

Lawrence: They’re saying, I don’t know if this is a good time to invest in the dairy industry at all. We haven’t had any tours, we’re putting it on hold for now.

Even though a quarter of the Iowa operations have failed, it’s far worse for similar programs in Michigan, Indiana and Ohio. More than 20 families have returned to their homeland — ashamed, heartbroken and penniless.

In Iowa, I’m Pat Blank for Marketplace.

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