Farming advances and efficiencies have made the United States one of the world’s largest exporters of agricultural products. However, U.S. agriculture has come under censure internationally because of its farm subsidies and tariffs and domestically because of environmental concerns, its inhumane treatment of animals, and its employment and treatment of immigrant workers.
Farming practices were first brought to America during the colonial years, when England granted large tracts of land to private companies or individuals for farming and development. After America won its independence in 1783, all unsettled lands came under the supervision of the federal government. Poor settlers, known as squatters, would often farm these tracts of land and claim ownership. Wheat, barley, rice, indigo, tobacco, maize, potatoes, and cotton were some of the first crops cultivated in the United States. In 1839, Congress set aside $1,000 to fund the distribution of seeds for crops and to collect agriculture statistics. The Homestead Act of 1862 offered vast amounts of land in the West for settlement, and by the mid-nineteenth century, American agriculture was a vital part of the economy, becoming a business operation that advanced the United States as a nation.
The American Industrial Revolution, occurring between 1820 and 1870, was significant to the U.S. economic evolution. Mills and factories expanded, waterways and railroads were built to ship goods long distances, and new inventions made production more efficient and quicker. Farm equipment, such as plowshares, reapers, the cotton gin, steam tractors, and the combine, made farming easier and faster. By 1860, there were approximately 2 million farms with an average size of 199 acres, which produced a variety of goods. Some of the agricultural products were consumed by farmers, some were sold domestically, and some were exported.
As the number of farms increased to supply the growing population, farmers began to organize to have more of a say in the governmental policies that affected them. The U.S. Agricultural Society was organized by farmers in 1852 to protect their interests and was active in all areas of farming. Although it disbanded in 1860, its influence still can be seen in U.S. agricultural policy. The U.S. Agricultural Society demanded a national bureau of agriculture to regulate farming issues, and the U.S. Department of
In 1867, a group of farmers known as the
President Abraham Lincoln appointed Isaac
In 1897, James
The first two decades of the twentieth century saw cities and the U.S. population continue to grow. Prices for farm products were high, as demand for goods increased and land values soared. During
The federal government regarded the agriculture industry as an integral component of the U.S. economy. In 1929, President Herbert Hoover created the
New farming techniques, gasoline- and electric-powered equipment, and widespread use of pesticides and chemical fertilizers also created work efficiencies that continued to increase food production. Although this was good for the overall economy, it was bad for farmers, because high yields meant increased supply, which meant lower prices. The new farming techniques also required the purchase of large, expensive equipment and chemicals, raising the farmers’ cost of production. These combined to decrease their profits and ability to make an adequate living from farming. President Franklin D. Roosevelt and the Congress passed the
Before World War II, low farm prices were largely the result of business cycles, bad weather, lack of adequate transportation methods, and credit difficulties. World War II and the Korean War temporarily boosted farm prices, as U.S. farmers supplied agricultural products to foreign countries hard hit by the war. After World War II, overproduction of crops became the main reason for decreased farm product prices and decreased profits for farmers. During the 1950’s and 1960’s, programs were started to use excess agricultural products. In 1954, Congress created the
The Agriculture and Consumer Protection Act of 1973 , an omnibus farm bill, dealt with soil conservation, lowered the limit on farm program payments, provided direct disaster payments, and shifted to a market-oriented farm policy. The Food and Agriculture Act of 1977 continued the market-oriented loan and target price policies of the 1973 legislation and further limited farm program payments. It created an extended storage program for grains, known as the farmer-reserve program, in an attempt to deal with surpluses. The Agricultural Credit Act of 1978 increased the amount of credit available to farmers. For much of the 1970’s, the worldwide demand for agricultural products was growing, creating higher land prices and incomes and reducing surpluses. However, as farmers borrowed money at low interest rates to expand their businesses by purchasing equipment and land, many became overextended. As market prices for agricultural crops fell, land prices dropped and credit became tighter. Farms began going into foreclosure, and manufacturers and sellers of farm equipment, seed, and fertilizer, along with rural banks, also experienced economic difficulties. The embargo in 1980 on U.S. food exports to the Soviet Union, through which President Jimmy Carter canceled sales of 17 million metric tons of corn, soybeans, and wheat, also reduced demand for agricultural products. The Soviet grain embargo ended in 1981.
In 1983, the Payment-in-Kind program was implemented in an attempt to reduce government surplus holdings of grains, rice, and cotton by removing 25 percent of farming land from production. A crop insurance program was also implemented to provide relief to farmers from natural disasters. However, the government had amassed large stockpiles of farm products and could not sell them. Gradually, market prices began to strengthen, but the cost of farming support programs exceeded $4 billion annually.
In 1985, President Ronald Reagan and the Congress enacted the Food Security Act, also known as the 1985
Legislation in 1990 encouraged farmers to raise crops for which they had not received subsidy payments and reduced the amount of payments for which they could qualify. In 1996, Congress worked to stop farming reliance on government assistance altogether. The
Congress eased the transition for farmers with the
Besides crop deficiency payments, the loan program for farmers started during the 1930’s also acts as a subsidy for farmers. Under this loan program, farmers originally would repay loans plus interest after their crops were sold in the marketplace. These loans had no penalty for nonpayment, except that the low-value crop was defaulted to the government. When the FAIR Act was implemented, the requirement to default low-value crops was removed, and the loan became a direct subsidy for the farmer. Loan deficiency payments (LDP) were also implemented and allowed farmers to bypass the loan process and receive a subsidy payment instead. This created a system in which farmers could take loan subsidies when market prices were low and sell their crops when market prices improved.
In 1985, the
In the twenty-first century, improvements in soil conservation, farm machinery, fertilizers and seeds, irrigation methods, and pest control have continued to increase crop yields. At the same time, these new methods have increased the costs of producing crops. Agriculture remains a capital-intensive industry with large fixed costs and uncertain outcomes, influenced by weather (drought, flooding) and the ups and downs of the commodity markets, both domestically and globally.
There were 2.1 million farms in the United States in 2002, with an average size of 441 acres, compared with nearly 5.4 million farms with an average size of 215 acres during the 1950’s. Many small American farms have been replaced by agribusinesses ranging from small hog-confinement operations to huge multinational firms. Although agribusinesses often result in cost-effective production of agricultural products, they have been criticized for producing pollution and environmental problems (often caused by disposal of animal wastes or large-scale use of pesticides), creating inhumane environments for animals (such as confinement sheds), and being the main beneficiaries of farm subsidies, rather than small family farms. Agribusinesses have also been criticized because they employ migrant workers, some of whom may be in the country illegally, and expose them to harsh working conditions.
Many small farmers must work part-time in addition to farming because of high land and equipment costs and the difficulty of earning enough to support their families. Continued federal
Farm subsidies have also caused problems at the global level. For example, the World Trade Organization has repeatedly called for fewer government subsidies for American cotton growers. The organization claims that the U.S. government is illegally subsidizing American cotton farmers, which drives down cotton prices on the world market, creating poverty in other cotton-producing countries. Brazil won a ruling at the World Trade Organization against the United States for providing subsidies to cotton farmers; this may result in the creation of a tariff against American cotton in Brazil.
Proponents of farm subsidies argue that price supports, which are paid when market prices fall below a certain point, are caused by falling prices and certainly do not trigger them. Also, because farmers have fixed costs of production, falling prices–not subsidies–will trigger overproduction as farmers strain to recoup their investments. Proponents argue that because farmers cannot control commodity prices, the government should use a combination of price supports and supply controls to avoid the negative effects of rapidly falling prices, which include farmer bankruptcies, land loss, accelerated consolidation of farms, and pressure to switch to input-intensive farming methods (such as factory farming).
Toward the end of the first decade of the twenty-first century, fuel concerns in the United States increased the demand for biofuels. This in turn drove up the demand and price for corn, a source of biofuel that supporters praise as a renewable source of energy and critics say is an inefficient source of energy and lucrative for farmers largely because of subsidies. Increased demand for grains by China and India, coupled with a weak American dollar, drove up market prices for corn and other grains. Higher grain prices translated into increased costs for beef, dairy, and poultry producers. The result has been higher consumer food costs worldwide. Domestically, higher prices and increased demand have reduced the amount of surplus commodities held by the Department of Agriculture, which means food banks are receiving less food from the government. The increase in demand means that farmers will increase production to increase supply and drive down costs, but if the market for agricultural products decreases, that will again result in overproduction. The fluctuations in farm prices due to market forces and uncontrollable weather conditions may require occasion federal interventions to maintain an adequate food supply and ensure that the economy thrives. However, the costs of these interventions must be carefully examined.
Cochrane, Willard W. The Curse of American Agricultural Abundance. Lincoln: University of Nebraska Press, 2003. Ironic account of the negative consequences of the vast productive capacity of American farms and farmlands. Etter, Lauren, and Greg Hitt. “Bountiful Harvest: Farm Lobby Beats Back Assault on Subsidies.” The Wall Street Journal, March 27, 2008. Details the battle over farm subsidies on Capitol Hill. Fitzgerald, Deborah. Every Farm a Factory: The Industrial Ideal in American Agriculture. New Haven, Conn.: Yale University Press, 2003. Analysis of the costs and benefits of the industrialization of American agriculture. Gardner, Bruce L. American Agriculture in the Twentieth Century: How It Flourished and What It Cost. Cambridge, Mass.: Harvard University Press, 2002. Comprehensive economic history of twentieth century U.S. agriculture. Hurt, R. Douglas. American Agriculture: A Brief History. West Lafayette, Ind.: Purdue University Press, 2002. Historical overview of agriculture in the United States.
U.S. Department of Agriculture
Farm Credit Administration