This title was a comment from an individual in one of my recent seminars. Unfortunately, these economic times have the headline of this article ringing true more than I would like to hear. This is particularly challenging to American agriculture because 70% of all farms and ranches are dependent upon the wages, benefits and/or wealth of investment income coming from non-farm sources.

For example, many grain producers are able to work off the farm because production efficiency and technology allows a large amount of acreage to be farmed while working part-time. To some, this off-farm income and wealth has been the avenue to start and grow a farm business.

Now, back to my participant. He lost his job after 24 years of employment in a local factory. He had worked the third shift so he could farm during the day. His question was, “What do I do?”

First, he is losing his health insurance in 60 days. He needs to establish coverage with a provider utilizing the COBRA rule. He should be able to extend his coverage for 18-36 months under these conditions. Farming and ranching is too dangerous to be without health coverage. Next, should he cash in his 401K retirement savings of $200,000 and pay down debt? No, no, no! If so, he will be penalized 10% for early withdrawal, and, second, federal and state taxes for that amount of withdrawal will be substantial, as high as 40%.

I suggest he and his wife examine their business, family and personal goals, develop a personal living budget and do a business plan, while keeping lines of communication open with their lender and family.

P.S. American agriculture needs a universal health care provider sponsored by a joint effort among American agricultural businesses and service organizations.

Editor’s note: Dave Kohl, Corn & Soybean Digest trends editor, is an ag economist specializing in business management and ag finance. He recently retired from Virginia Tech, but continues to conduct applied research and travel extensively in the U.S. and Canada, teaching ag and banking seminars and speaking to producer and agribusiness groups. He can be reached at sullylab@vt.edu.