Farm crisis

A farm crisis describes times of agricultural recession, low crop prices and low farm incomes. The most recent US farm crisis occurred during the 1980s.[1][2][3]

Crisis of the 1920s and 1930s

Although commonly believed to be onset by World War I, the effects of this farm crisis began in the 1920s. At the onset of the crisis, there was high market supply, high prices, and available credit for both the producer and consumer. The U.S. government continued to instill inflationary policy following World War I.[4] By June 1920, crop prices averaged 31 percent above 1919 and 121 percent above prewar prices of 1913. Also, farm land prices rose 40 percent from 1913 to 1920.[5] Crops of 1920 cost more to produce than any other year. Eventually, a price break began in July 1920 which squeezed farmers between both decreasing agricultural prices and steady industrial prices. . Examples of decreasing agriculture prices include: By 1933, Cotton was only 5.5 cents per pound, corn was down 19.4 cents per bushel, and hogs declined to $2.94 instead of their respective 1909-1914 average prices of 12.4 cents per pound, to 83.6 cents per bushel, and $7.24 per hog. Furthermore, a region of the great plains was hit by an extreme drought which added to the agricultural difficulties of the time. See Dust Bowl for more information.[6]

Reformation of the 1920s and 1930s

Throughout this crisis there were many attempts to form Farmers' Unions. This was difficult considering the lack of effective communication technology, the lack of electricity on many farms, and the overall size of the country. The Agricultural Marketing Act of 1929 intended to bring government aid to cooperatives. It allowed the Federal Farm Board to make loans and other assistances in hopes of stabilizing surplus and prices.[7] Later, Agricultural Adjustment Act (AAA), which was enacted on May 12, 1933, aimed to bring back pre World War 1 Farmers' abilities to sell farm products for the same worth they were able to buy non-farm products. The Act involved seven different crops: corn, wheat, cotton, rice, peanuts, tobacco, and milk. Farmers were paid to not plant those seven crops, thus decreasing supply and returning to market equilibrium. In order to prevent noncooperative farmers from taking advantage of other farmers decreasing supply the bill states "is to keep this noncooperation minority in line, or at least prevent it from doing harm to the majority, that the power of the Government has been marshaled behind the adjustment programs" In other words,the benefits from payments to cooperative farmers were designed to be more beneficial than being noncooperative and flooding the market. The AAA was deemed unconstitutional on January 6, 1936.[8] Further reformation included Farm Credit Act of 1933, which allowed farmers to re-mortgage no longer affordable property, as well as the Frazier–Lemke Farm Bankruptcy Act.

See also

References

  1. ↑ Steve Huntley. "Winter of Despair Hits the Farm Belt," U.S. News & World Report v100 January 20, 1986, 21-23
  2. ↑ Joshua Hammer. "Double Slaying in Rural Minnesota Spotlights Distress of America's Debt-Ridden Farmers", People Weekly, v20 October 31, 1983, 129-131
  3. ↑ Bob McBride. "Broken Heartland: Farm Crisis in the Midwest", The Nation, v242 February 8, 1986, 132-133.
  4. ↑ Perkins, Van L. "Crisis in Agriculture: The Agricultural Adjustment Administration and the New Deal," 1969.
  5. ↑ Shideler, James H. "Farm Crisis, 1919-1923," Berkeley: University of California Press, 1957.
  6. ↑ Perkins, Van L. "Crisis in Agriculture: The Agricultural Adjustment Administration and the New Deal," 1969.
  7. ↑ Belden, Joseph N. "Dirt Rich, Dirt Poor: America's Food and Farm Crisis" 1986.
  8. ↑ Perkins, Van L. "Crisis in Agriculture: The Agricultural Adjustment Administration and the New Deal," 1969.
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