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Jolly, Robert

Published onAug 18, 2021
Jolly, Robert

( birth date unknown — )

Quick Facts

Robert Jolly aided farmers during the farm crisis of the 1980s with one-on-one financial counseling. He later developed a training program for teaching bankers in foreign countries the capitalist system.

In 1972, a crop failure in Russia led to the purchase of 440 million bushels of wheat from the United States, the equivalent of 30% of a typical annual harvest. Food and feed grain prices soared. Within two years, real corn and soybean prices doubled. Farmland values were bid up. Even though commodity prices returned to normal by 1977, land prices continued to rise, buoyed by accelerating inflation that disguised the falling real commodity prices and led to low real interest rates that encouraged farmers to borrow in order to purchase more land. In August 1979, Paul Volcker took over as chairman of the Federal Reserve and introduced policies to curtail inflation. Real interest rates rose dramatically. Farmers who had borrowed heavily to purchase land found they could not meet their payments. Banks that lent money with farmland as collateral found that they had assets they could not sell. Farmland prices fell 75% in five years, a deeper and more protracted decline than the recent housing price decline blamed for the Great Recession.

Robert Jolly started his career at Iowa State as an assistant professor in farm management and agricultural finance, at the same time that farmland prices were starting to decline. He spent his first year touring the state, giving talks on budgeting and the importance of holding down costs in response to declining commodity prices, but he was increasingly confronted by farmers who could not possibly adjust their management practices sufficiently to generate positive net incomes. While farmers were panicking that they could not meet their credit requirements, their bankers were also panicking that they had an increasing number of borrowers who were in default, with collateral that was losing value. Panicked farmers and bankers needed more than his prepared remarks could deliver, so Jolly began to do one-on-one financial counseling with farmers and in the process developed a strategy for addressing the growing crisis.

The strategy had four components. Along with counseling for farmers, Jolly developed a training program for lenders who needed to learn how to adjust loans to meet a new reality with lower cash-flow per acre and lower collateral values. Local communities also had to adjust to sharply reduced demand for goods and services from farmers. Finally, there had to be systematic data collection on farm budgets so that all parties would understand the magnitude of the problem.

By 1983, the data were in, and the problem was worse than anyone imagined. Said Jolly, “The process leading up to this was a little like cooking a frog, where no one realized the temperature was rising.”

Typical portfolios for banks engaged in agricultural lending included 60-70% of their loans issued to borrowers who could not service their debt. Armed with that data, Jolly developed a plan that was ultimately funded by the state. Twenty active farmers with agribusiness college training were hired to serve as counselors, and each was given a microcomputer and a FINPACK program that had been recently developed by the University of Minnesota to evaluate a farmer’s cash flow. The twenty were trained and sent out to address needs. In the next three years, they provided one-on-one financial counseling to about sixteen thousand farmers.

Meanwhile, Jolly was training lenders to restructure loans in a series of three evening sessions. The training included instruction on how to use the FINPACK data generated by the counselors. At the same time, Paul Lasley in the Department of Sociology at Iowa State was working with communities, and Neil Harl, professor of economics, was working on the tax consequences of debt forgiveness. By the time Jolly was promoted to professor in 1985, the worst of the crisis had passed.

“At the time, I saw myself as a young professional responding to an upheaval,” he recollected. “What I realize in hindsight is that the experience really informed my career. I was able to identify my strengths - someone who could identify assets and resources, and find ways to take appropriate action.”

Not much later, the collapse of the Soviet Union provided another opportunity for Jolly’s knack for economic triage and “appropriate action.” Along with August Ralston, professor of finance at Iowa State, Jolly developed a program to train bankers in formerly planned economies to learn how to function in the capitalist system.

Jolly received a BS with Distinction in Soil Science (1968) his MS in Agricultural Economics (1974) and a PhD in Agricultural Economics (1976) from the University of Minnesota, St. Paul.

Jolly went on to serve with distinction as associate dean in the College of Agriculture, interim director of the Leopold Center and director of the Agricultural Entrepreneurship Initiative. He retired from Iowa State in 2010.

His honors include: Alpha Zeta, 1966; Certified Soil Scientist, Soil Science Society of America, 1968; Gamma Sigma Delta, 1968; Iowa State University College of Agriculture Award for Excellence in Applied Research & Extension, 1983; Iowa Soybean Association and Iowa Soybean Promotion Board Leadership Award, 1990; Miller Fellowship, 1996-97; ISU Extension Achievement Award, Strategic Advantage Program Team, 1997; ISU Extension Achievement Award, Agricultural Credit School, 1997; Iowa Bankers Association, Citation, 1999; University Mission Award for Extension, Gamma Sigma Delta, 2000;Iowa State College of Agriculture Award for Excellence in International Agriculture, 2001; Iowa State University, International Service Award, 2003; Iowa State University Extension Team Award, Agricultural Management e-School, 2004; American Agricultural Economics Association, Outstanding Choices Article for 2005, 2006; Distinguished Service to Iowa Agriculture, Iowa Chapter – American Society of Farm Managers and Rural Appraisers, 2011; and the Faculty/Staff Inspiration Award, ISU Alumni Association, 2016.

Bob was married to Colleen Kay Drackley Jolly (1946-2018) on March 17, 1968 in Tracy Methodist Church in Tracy, MN. Colleen worked for ISU Extension in various capacities retiring in 2007. They had three children, daughter Shannon, son Michael (died in infancy) and son Dan.

Selected Sources

Robert Jolly, CV.

Research Gate profile.

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