The agriculture crisis has been especially hard on farmers and banks in parts of the Midwest and could plague the region for another year, economists said at a conference here.

Michael Singer, an economist with the Federal Reserve Bank of Chicago, said that banks and farms in states with diversified commodity markets that include dairy, beef, or vegetables are weathering the crisis better than those dependent on grain and hogs.

In Illinois, Indiana, and Iowa, over 70% of the gross cash receipts from agriculture come from hogs, corn, and soybeans. These are three commodities "that have really been hammered by low prices," Mr. Singer said.

In Wisconsin, by contrast, "over half of the gross receipts come from dairy," he noted, "and dairy farmers have been doing fairly well."

Mr. Singer was among the speakers at a Chicago Fed conference in Bloomington -- Agriculture in 2000: Difficult Times Ahead?" -- that drew about 50 farm lenders last week.

It was the second farm banking conference presented this year by the Chicago Fed, which held them to address concern prevalent among agricultural lenders -- especially those in the Midwest -- about the past two years of weak commodity prices. The U.S. Department of Agriculture already projects that net farm income will decline by 11% in the heartland this year, compared with 2% nationwide.

The Midwest "may be another year away from a recovery to this crisis," said Darrel Good, a University of Illinois agricultural economist. "Unfortunately, that's what we were saying last year as well."

Farmers are struggling to repay their operating loans, and a recent Federal Reserve survey found that bankers have started to roll over more of that problem debt. Illinois bankers, for instance, said in July that 21% of their farm loans have some problems. The figure was 13% a year earlier.

"Debt restructuring is not a solution," said David Wirth, executive director of the Illinois Farm Development Authority, a state-funded agency that offers loan programs through banks and thrifts to restructure farm debt. "It's a little like taking aspirin when you have a chronic condition. You feel better for a while, but you're still going to die.

"We don't want to do something that prolongs the inevitable," Mr. Wirth added. He recommends that bankers broach the subject of helping farmers get out of the business and take advantage of the nonfarm opportunities in today's strong economy.

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