10 10 The Unintended Consequences of Supply Management
… the real and lasting progress of the people of farm and city alike will come, not from the old familiar cycle of glut and scarcity, not from the succession of boom and collapse, but from the steady and sustained increases in production and fair exchange of things that human beings need.
—Franklin D. Roosevelt, Statement on Signing the Agricultural Adjustment Act of 1938, February 16, 1938
New Deal agricultural policy was undoubtedly a response to the Great Depression as it affected agriculture and, to a lesser extent, the environment. Yet, this response was neither inevitable nor automatic. Just as with the recent financial crisis and recession, the Great Depression was preceded by a world economic crisis in agriculture that rested on several factors: unstable prices, expanding production (beyond demand), environmental degradation, and a faltering system of international trade in agriculture.1 Overproduction and price instability, in particular, plagued farmers in the United States and around the world as early as the mid-1920s. The eventual New Deal response was bold and among the most extensive economic interventions created as it regulated prices and production of agricultural commodities through the Agricultural Adjustment Act of 1933 (hereafter, AAA) and its policy of supply management. These elements aimed to coordinate and regulate agricultural production and markets in ways that would alleviate overproduction and market collapses. Other elements of New Deal agricultural policy aimed to redistribute land and expand opportunities in rural areas or to ease the environmental degradation brought by expanding and industrializing agriculture at the time. Thus, agricultural policy in the New Deal not only intended to regulate agriculture and smooth out markets, but it also aimed at increasing farm income, reducing rural poverty, and promoting conservation in farming.
Despite this boldness, New Deal agricultural policy eventually came to reinforce existing patterns of inequality and industrialization in agriculture. For example, the number of farms decreased, and average farm size increased as agriculture became more concentrated. And by reinforcing the inequalities in agriculture, some of the core elements of New Deal agricultural policy promoted some farming practices and technologies that contributed to environmental decline: much greater use of chemical fertilizers, pesticides, and herbicides, as well as intensive irrigation in some regions such as the Great Plains—which had been struck by the Dust Bowl in the 1930s.
To understand fully this long-term development, however, we need to start with the origins in the agricultural depression beginning in the 1920s. The next section, then, explores various agricultural aspects of the nascent depression in the 1920s as well as the initial political responses. Then the chapter will explore New Deal agricultural policy and how it was won. What political forces and context brought forth the policy of supply management? Next, the heart of the chapter examines the development and consequences of supply management policy in the mid–twentieth century, as this New Deal policy ultimately resulted in several important yet unintended consequences: changes in regional class structures, production patterns, and farmers’ economic interests. This section also examines how the long-term trajectory of New Deal agricultural policy is apparent today. The chapter ends with a reflection on the lessons of New Deal agricultural policy for the current era of economic troubles and political debates about government economic policy. It all starts, however, in the early twentieth century.
During and immediately after World War I, agriculture prospered as prices for cotton, wheat, corn, and other agricultural commodities increased significantly as a result of increased exports to Europe. Between 1914 and 1919, cotton prices rose from about 7 cents per pound to about 35 cents per pound; wheat went from 97 cents a bushel to $2.16 a bushel; and corn rose from 67 cents a bushel to $1.44 a bushel. At the same time, gross farm income more than doubled, from $7.6 billion to $17.7 billion.2 After the brief postwar recovery of European agriculture, this prosperity was interrupted by a short but intense depression from 1920 to 1921 as market prices fell by more than 50 percent: cotton fell to 17 cents a pound, wheat to $1.03 a bushel, and corn to 46 cents a bushel. Likewise, gross farm income fell to $10.5 billion in 1921—a drop of more than 40 percent in two years (see Figure 10.1).
Market prices rebounded somewhat in 1924 and 1925, but this rebound ended as prices resumed their downward slide between 1926 and 1930: cotton prices averaged about 16.8 cents a pound, wheat about $1.10 a bushel, and corn about 80 cents a bushel. This represented a decline of at least 20 percent from the cotton and corn prices in 1924, and from the wheat price in 1925. Furthermore, agricultural prices began a continuous decline in 1927 that would not end for about six years. A few years before the U.S. stock market crash in October of 1929, then, agriculture had begun to slip into depression.3
Figure 10.1 Wheat, Corn, and Cotton Prices, 1910–1940.
After 1929, agriculture markets collapsed as the entire economy was enveloped by the Depression. In 1932, agriculture hit bottom along with the rest of the economy. Wheat was a mere 37.5 cents per bushel by 1932—a decline of more than 70 percent from 1925. Cotton prices fared just as poorly. After rising to about 23 cents a pound in 1924, cotton prices fell to 5.7 cents a pound in 1931—a drop of about 75 percent in only seven years. Finally, corn prices experienced a similar decline: after reaching $1.06 in 1924, corn fell to 32 cents a bushel in 1932—a 70 percent decline.
The collapse in agricultural prices, of course, led to a sharp decline in overall farm income, as this economic crisis affected everything from wheat, to hogs, to tobacco.4 Average income per farm fell from $2,051 in 1926 to $953 in 1932—a drop of about 54 percent in seven years.5 Per-farm income for cotton farmers fell even faster, by 68 percent between 1929 and 1932, from $1,245 to $397.6 With farm prices and income in a free-fall, farmers throughout the country increasingly faced bankruptcy and bank foreclosure on their mortgages. The rate of farm foreclosures and bankruptcies in the United States more than doubled, from 18.7 per 1,000 farms in 1931 to 38.8 per 1,000 farms in 1933.7 Thus, the depression of the late 1920s and early 1930s devastated U.S. agriculture.
What factors lay behind this depression? How did farmers come to be faced with prices that collapsed to a mere fraction of their previous levels? Part of the answer rests in U.S. agricultural production levels, and part of it is found at the level of the world economy. The fundamental problem was that American cotton, wheat, and corn farmers began to face a serious economic crisis due to overproduction and declining exports during the mid-1920s. Between 1920 and 1925, for example, annual U.S. cotton production averaged about 12 million bales. In 1926, however, cotton farmers produced a record 18 million bales of cotton. Over the next several years, cotton production declined slightly but still remained high, averaging more than 15 million bales between 1926 and 1931. At the same time, the average yearly surplus of cotton more than doubled, from 2.5 million bales between 1921 and 1925 to 5.6 million bales between 1927 and 1932.8 Increased production in the world economy also posed a problem for cotton: annual world cotton production increased from an average of 20 million bales in 1921–1925, to almost 27 million bales per year between 1926 and 1931, with an increase of 55 percent during the entire period between 1922 and 1931. The situation was similar for other commodities: U.S. and world production increased in the 1920s, leading to a glut on world markets and decreased exports. Farmers in the United States and elsewhere faced the daunting problems of overproduction and surplus.
Regarding exports, two factors created a context in which U.S. exports would be expected to decline. First, agriculture in Europe recovered from the devastation of World War I, and consequently Europe’s market for American agricultural products declined. Furthermore, many European nations began to rely on agricultural exports to help pay down debts accumulated during the war. As a result, European farmers began competing with American farmers for export markets. Second, the United States came out of World War I as a creditor nation rather than the debtor nation it had previously been. This status increased the value of the dollar relative to other currencies, thereby increasing the cost of U.S. goods, including cotton and wheat. Thus, the nation’s creditor status made American exports less competitive.
Several factors contributed to the increased cotton and wheat production, including “better seeds, improved control of diseases, more efficient specialization, and the adoption of mechanized equipment.”9 Perhaps most importantly, however, cotton and wheat acreage in the United States expanded. Cotton production expanded westward out of the Southeast into Arkansas, Oklahoma, and Texas. In these states, cotton acreage increased from 15 million acres in 1921 to almost 27 million acres in 1926. In Texas alone, cotton acreage increased from 10.7 million acres to 18.3 million acres. Wheat acreage also increased by more than 20 percent between 1924 and 1929, from 52 million acres to 63 million acres. This expansion in cotton and wheat acreage led to increased production and contributed to surpluses that drove down the prices of these commodities. This expansion of farming in the middle of the United States also laid the foundation for one of the most alarming environmental crises in agriculture: the prolonged Dust Bowl that ravaged the Great Plains in the 1930s. But the crisis of the 1920s was one of economics—overproduction, unstable prices, and the collapse of global markets.
Despite the roots of this crisis in agriculture, the proposed political solutions during the Republican administrations of Calvin Coolidge (1923–1928) and Herbert Hoover (1928–1932) did not automatically focus on production, prices, and exports.10 Each of these administrations saw the problem in agriculture as deriving from a lack of economic coordination and therefore opposed policy solutions that required significant involvement in the economy, such as directly influencing prices or production. Rather than such direct intervention in the economy, Coolidge and Hoover each supported legislation that aided and strengthened farmer cooperatives as a means of improving market coordination.
In contrast, many members of Congress from farm regions increasingly did favor more extensive action by the federal government. In an effort to win such policies, senators and representatives from the South, the Wheat Belt, and the Corn Belt formed the Farm Bloc in 1921.11 In 1924, Senator Charles McNary (R-Oregon) and Representative Gilbert Haugen (R-Iowa) introduced bills in the Senate and House, respectively. The McNary-Haugen bills, as these proposals came to be known, called for the federal government to raise agricultural prices by purchasing surpluses and selling them abroad at world market prices. Domestic prices would be protected by a tariff, further helping to raise agricultural prices relative to those in industry that had long been protected by tariffs. The difference between the higher domestic price and the lower world price would be covered by an “equalization fee” charged to farmers based on their production. The equalization fee would not only help pay for the program, but, proponents hoped, it would reduce the risk of overproduction as well. The key is that the McNary-Haugen bills would regulate prices in a way that was favorable to farmers as well as alleviate overproduction by removing the surplus from the market.
These bills, none of which passed, were effectively a precursor to the New Deal agricultural policy of supply management. Presidents Coolidge and Hoover each stood in the way of their passage: Coolidge vetoed two versions of the McNary-Haugen bills, in 1927 and 1928; soon after taking office, Hoover signed the Agricultural Marketing Act, which provided financial and managerial support for agricultural cooperatives.12 Although the Farm Bloc stretched across party lines to include both Democrats and Republicans, it did not have enough influence in the Republican Party to enact supply management policy.
In the South, cotton prices and farm income declined so much that public officials and farm leaders grappled desperately with the cotton crisis. The dire economic situation in world cotton markets led many Southern cotton producers and politicians to advocate mandatory reductions in production in order to raise prices and farm income. In 1931, Mississippi Governor Theodore Bilbo proposed that cotton states pick only two-thirds of the crop, and the Hoover Administration then proposed that cotton farmers plow under every third row.13 Huey P. Long, governor of Louisiana, proposed a year’s “Cotton Holiday” during which the South would produce no cotton in 1932. Long recommended that Southern states create laws mandating that farmers abstain from growing cotton and levy fines on any farmers who violated the holiday. A cotton holiday conference held in New Orleans in August 1931 was attended by state officials, planters, merchants, newspaper reporters and editors, and congressional representatives and senators from Southern states. The conference endorsed Long’s proposal for a cotton holiday.14 In the end, five Southern states—Arkansas, Louisiana, Mississippi, South Carolina, and Texas—enacted mandatory cotton-reduction legislation in 1931.15 Thus, prior to the New Deal, there was significant support in the South for an agricultural policy that would directly regulate production.
Support for production controls by individual states, however, was by no means unanimous. Alabama’s governor, for example, refused to support legislation to mandate a reduction in production. With several cotton states likewise failing to pass reduction legislation, the cotton-reduction movement in the South died.16 Nonetheless, even before the creation of the AAA, parts of the South already demonstrated that they favored the cornerstones of the AAA: production controls and price supports. Still, the goal of supply management was elusive, even with Southerners firmly supporting the policy. The political power necessary to win supply management policy came with the election of Franklin Delano Roosevelt in 1932.
Franklin Roosevelt defeated the incumbent, Hoover, in the 1932 presidential election by a landslide, winning 89 percent of the electoral vote and 57 percent of the popular vote. In addition, Democrats won substantial majorities in the U.S. House (313–117) and Senate (59–36). Roosevelt’s New Deal brought national policies that significantly departed from those of the Republican administrations of the 1920s: a more activist government, by which he meant a government that intervened more in the economy. This was territory into which neither Coolidge nor Hoover was willing to venture.
One of the first of President Roosevelt’s “alphabet programs” aimed at alleviating the Great Depression was the Agricultural Adjustment Act (AAA), which he signed on May 12, 1933. The AAA set up two central programs—price supports and production controls—with the objective of raising farm prices by controlling the supply of agricultural commodities. This policy built on the various production controls of the McNary-Haugen bills and the cotton-reduction legislation passed by Southern states. To administer supply-management policy, the AAA created a few new bureaucracies and made use of some existing ones.
The Commodity Credit Corporation (CCC) was created in 1933 to administer price supports through “nonrecourse” loans. If the market price rose above the loan rate, then farmers could sell their crop and pay back the CCC loan, earning a profit on the difference between the higher market price and the loan rate. If prices remained below the loan rate, however, then the “nonrecourse” element of the loan operated: farmers had no recourse other than to forfeit their crop to the CCC, and the CCC could take no action against farmers who forfeited their crop. Consequently, farmers would receive an “adequate” price for their crop, and the CCC would effectively reduce the supply of commodities on the market with the expectation of stabilizing or even raising market prices. In essence, when market prices fell below price support levels, the CCC purchased basic commodities from farmers at the price support level as a means of pulling the commodities off the market, controlling supply and raising farm income.
Price supports aimed to raise agricultural prices—and hence, farm income—relative to other consumer and industrial prices. To accomplish this, price supports were based on “parity,” which gave agricultural commodities “the same purchasing power in terms of goods and services farmers buy that the commodities had” in the period from 1909 to 1914, when agricultural prices reached historic heights relative to other prices.17 Price supports, then, gave agricultural prices parity with industrial prices, based on the ratio of prices between 1909 and 1914.
Production controls were administered by the Agricultural Adjustment Administration and were a means of limiting the supply of agricultural commodities. The AAA required farmers to adhere to acreage allotments that were determined by growers’ historical production of basic commodities. For example, farmers who had historically grown cotton on large numbers of acres were given large cotton allotments. Farmers who did not adhere to production controls would not receive price supports. Because historical production levels determined acreage allotments, the AAA was biased in favor of larger farms. The AAA also created set-aside programs that paid farmers to leave land idle.18
In addition to restrictions on acreage, the AAA also created marketing agreements between farmers and processors. The Secretary of Agriculture could mediate the terms of the agreements to limit the supply of commodities that farmers could market, and impose a fine on farmers who exceeded their marketing allotment. In this way, if farmers ignored controls on acreage, the United States Department of Agriculture (USDA) could still head off any potential surplus by limiting how much made it to the market.19 Whether through restrictions on acreage or marketing, production controls under the AAA sought to eliminate surpluses and their downward pressure on agricultural prices and farm income.
Under the AAA of 1933, government subsidies to farmers from price supports and production controls were funded by a tax on processors of agricultural commodities. Because the basic commodities—wheat, corn, cotton, tobacco, hogs, and rice—all needed to be processed in some fashion before they could be consumed, the processing tax was easy to administer. (The required processing also made it relatively easy to monitor production levels.) The Secretary of Agriculture set the level of the processing tax based on the difference between farm prices and parity prices. The “tax was placed on the ‘first domestic processing’ of agricultural commodities”—except for cotton ginning, which was exempt from the tax.20 The aim of the processing tax was to prevent the cost of payments to farmers from straining the federal budget.
What factors influenced the shape of the AAA and Roosevelt’s decision to pursue a policy of supply management based on price supports (through CCC loans) and production controls (acreage allotments and marketing agreements)? The bipartisan McNary-Haugen bills of the 1920s and the production control measures proposed in the South in 1931 certainly had an influence, as did the composition of Roosevelt’s USDA and his selection of Henry A. Wallace for Secretary of Agriculture. Wallace had favored price supports and production controls before joining Roosevelt’s cabinet. Importantly, each of these components of the foundation of the AAA rested on the Farm Bloc, a political coalition of corn, wheat, and cotton interests.21
Of particular significance, New Deal legislation had to be acceptable to—and was influenced by—the Southern Democrats in the House and Senate. In Congress, Southern Democrats held powerful positions, including Senate Majority Leader Joseph Robinson of Arkansas, House Majority Leader Joseph Byrns of Tennessee, the chair of the Senate Committee on Finance, Pat Harrison of Mississippi, and the chair of the House Ways and Means Committee, Robert Doughton of North Carolina.22 The dominance of Southern Democrats over such key legislative positions gave them much influence over the shape and substance of New Deal policies.23 For example, the social insurance programs of the Social Security Act of 1935 and the National Labor Relations Act of 1937 both explicitly excluded agricultural workers. As a result, most Southern blacks were effectively excluded from these federal policies. In each instance, Southern Democrats were protecting the racial political economy of the South.
This was especially true with the AAA. First, Southern Democrats played key roles in the passage of the AAA: Marvin Jones of Texas was the chair of the House Agricultural Committee, John Bankhead of Alabama headed the Senate’s Agriculture Committee and as Majority Leader Joseph Robinson guided the AAA through the Senate. More than 80 percent of Southern senators voted for the AAA in 1933.24 Second, Southern support for and influence over the AAA was likewise evident in the implementation of supply management policy. For example, Oscar Johnston—president of the largest cotton plantation in Mississippi—was the finance director of the Agricultural Adjustment Administration.25 Furthermore, Southern planters dominated local agencies administering AAA programs.26 The influence of planters pervaded the AAA, from the federal government to the local administration. Thus, understanding supply management policy is impossible without acknowledging the role of Southern Democrats and Southern planters in making and shaping the policy. Supply management policy bore the imprint of the Southern class structure.
How successful was this policy at controlling production and raising prices and farm income? Southern cotton production fell from 13 million bales in 1933 to 9.6 million bales in 1934 and increased very slightly to 10.6 million in 1935. And after averaging 39.5 million acres between 1929 and 1932, total American cotton production averaged 28 million acres between 1934 and 1936. The AAA cotton reduction program facilitated changes in the rural class structure of the South by pushing tens of thousands of tenant farmers and sharecroppers off the farm since the land was often left fallow, for pasture, or for other uses that required less labor than did cotton.
In the Midwest, corn and wheat farmers cut back their acreage and overall production. U.S. corn acreage fell from 110 million in 1932 to 93 million in 1936, and wheat acreage fell from 57 million to 49 million—a decline of about 15 percent for each commodity. Production levels fell even more dramatically: corn production fell from about 82 million metric tons (MMT) in 1932 to 40 MMT in 1936, and wheat production fell from 25.6 MMT to 17.1 MMT during the same period. The decreased production was also due, in part, to a severe drought that hit parts of the Corn and Wheat Belts in 1934. Nonetheless, production controls seemed somewhat effective: between 1932 and 1935, the production of cotton fell by almost 20 percent, corn fell by 10 percent, and wheat by 25 percent.
This policy of supply management achieved its goal of boosting farm income by making the State deeply involved in the market economy. Between 1932 and 1936 cotton prices almost doubled, and wheat and corn prices almost tripled. Increased prices then led to higher farm income: after falling from $1,746 per farm in 1930 to $953 in 1932, it rose to $1,583 in 1936—an increase of more than 65 percent in four years.27 On each count, therefore, the AAA was successful to some degree: farmland in use and overall production declined, and commodity prices and farm income increased.
Despite the initial success of price supports and production controls, the AAA faced serious political challenges and created significant conflict within agriculture. First, some farmers opposed AAA’s price-fixing and production dictates. Such opposition from farmers tended to come from the Corn Belt.28 Second, conflict emerged over the extent to which the AAA should attempt to reform agriculture. Within the Agricultural Adjustment Administration, some officials believed that New Deal agricultural programs should aim to alleviate rural poverty and inequality—especially in the South—through social reforms. Third, and perhaps most important, many corporations that processed agricultural commodities—such as grain processors, cotton mills, and meat packers—opposed being forced to finance supply management. The processing tax created by the AAA rested squarely upon these corporations.
Farm organizations that opposed the AAA tended to do so for one of two reasons: either because the AAA failed to provide enough support to farmers, or because the policy went too far in imposing “regimentation” and government control on farmers.29 The National Farmers’ Union (NFU), which was strongest in the Wheat Belt, was the largest farm organization to oppose the AAA for providing too little support to farmers. The NFU instead favored support based on the cost of production (including the cost of seed, fertilizer, land, and so on).30 John Simpson, president of the NFU, criticized the administration’s focus on parity, which Simpson argued would give farmers less than half of the cost of production.31 The Roosevelt Administration, however, opposed cost-of-production because the USDA was unable to calculate the cost of production for agricultural commodities.
By contrast, a few small-farm organizations—rarely surpassing several hundred members—opposed the AAA for imposing unnecessary and “un-American” controls on farmers. Most notable among these organizations was the Farmers Independence Council (FIC). Led by Dan Casement, who owned a large cattle farm in Kansas, the FIC expressed significant concerns that the federal government would take control of agriculture. Supported by meat processors, the FIC was particularly opposed to the processing tax that funded relief payments. In doing so, Casement and the FIC claimed to be protecting the liberty and independence of farmers from the control of the government. Other organizations, such as the National Farmers Process Tax Recovery Association (FPTRA), emerged in opposition to the processing tax of the AAA, arguing that processers simply paid lower prices to farmers to make up for the processing tax.32 In addition, the Corn Belt Liberty League organized farmers in opposition to production controls. Thus, these and other organizations opposed the AAA because they saw supply management policy as an unacceptable expansion of the federal government’s reach. Nonetheless, such organizations had little to no influence on New Deal agricultural policy.33
The AAA also created conflict among segments of agriculture over another aspect of the policy: rural reform. The most notable conflict emerged in the South between tenants and sharecroppers on one hand, and planters on the other. Disagreement existed over what portion of AAA payments—if any—tenants and sharecroppers should receive. Under the AAA, landowners signed contracts to restrict their acreage and limit production, and AAA payments were sent directly to landowners with the instructions that “a sharecropper was to receive one-half of the payments, a share-tenant two-thirds, and a cash-tenant all.”34 But many planters refused to share the AAA payments with their tenants or sharecroppers. Consequently, a political battle over the distribution of AAA payments emerged both within the federal government’s agricultural bureaucracy and in the cotton fields of the South.
A division emerged within the Agricultural Adjustment Administration over the distribution of AAA payments and the use of agricultural policy as a means of rural reform. Opposed to such efforts was a group of “conservative agrarians” that included Chester Davis, Chief of the Production Division; Oscar Johnston, Head of the Finance Division; and, Cully Cobb, who headed the Cotton Section. George Peek, the head of the Agricultural Adjustment Administration, tended to agree with this group that supply management policy took precedence over rural reform. The primary focus of these conservative agrarians was raising farm prices through production controls. Rural reform was largely absent from their agenda. A core group of “urban liberals” who were mostly lawyers from the Northeast argued that landowners ought to be required to share AAA payments with tenants and sharecroppers. They also proposed confiscating some of the planters’ land and redistributing it to allow tenants and sharecroppers to become small, independent farmers.35 This group was led by Rexford Tugwell, Undersecretary of Agriculture, and Jerome Frank, General Counsel of the AAA. Several members of this group, including Gardner “Pat” Jackson, were in the Consumer Division of the AAA.
Outside the Department of Agriculture, the Southern Tenant Farmers Union (STFU) advocated for the rights of tenants and sharecroppers, particularly to share in the benefits distributed by the AAA. Founded and led by H. L. Mitchell and Clay East in Arkansas in July 1934, the STFU organized strikes and lobbied for assistance to tenants and sharecroppers, but their efforts were met with violence and intimidation. Nonetheless, the STFU found little support from the Roosevelt Administration, in part because Arkansas was the home state of Joseph Robinson, the Senate Majority Leader, who was central to the passage of Roosevelt’s New Deal legislation. The president avoided offending Southern Democrats like Robinson who were important to the success of other administration policies. Likewise, the STFU found little support in the USDA or the AAA. Davis, Cobb, Johnston, and others opposed upsetting the organization of the rural South, and their contacts in the South told them that Mitchell and Clay were “Communists” trying to start “uprisings” among black tenants and sharecroppers.36
Yet the urban liberals did advocate for the STFU and the interests of tenants, croppers, and poorer farmers. In February 1935, Jerome Frank “issued a telegram to all state AAA offices in the South” to enforce cotton program contracts in a manner that favored tenants,37 with the result that Chester Davis demanded that Secretary Wallace “authorize him to request the resignations of [Jerome] Frank, … [‘Pat’] Jackson” and several other urban liberals.38 Wallace agreed, largely because taking a stance behind Frank’s interpretation of the cotton contracts would have cost Wallace his Cabinet post and endangered other New Deal programs. Southern Democrats and planters were politically powerful enough to exact such a high price for undermining their interests. As a result, the STFU’s strongest advocates were removed from government in what became known as the “liberal purge.”
Despite the liberal purge, new regulations created in 1938 required landowners to share AAA payments with tenants and sharecroppers. Following this legislation, however, planters frequently expelled tenants from their land and hired sharecroppers and tenants as wage laborers who had no legal claim to federal farm subsidies. In this way, the planters won the battle over the distribution of AAA payments. Ironically, as I explain later, this policy ultimately undermined the very system that planters and conservative agrarians fought to protect: the Southern plantation system.
The final political battle surrounding the AAA was the tax on agricultural processors that provided funds for price support and production control payments. Various processors sued the government, claiming that this tax was an undue burden and was therefore unconstitutional. Indeed, more than 1,700 lawsuits had been filed against the AAA by the end of 1935. In December 1935, the Supreme Court heard the case of United States v. Butler, which challenged the constitutionality of the processing tax used to fund AAA benefits. The primary claimant was the Hoosac Mills Corporation, a bankrupt cotton milling corporation in Massachusetts.39 The administration defended the AAA based on the government’s right to tax and regulate interstate commerce. The Court’s majority, however, rejected this reasoning. On January 6, 1936, the Supreme Court declared in a 6 to 3 decision that two core elements of the AAA were unconstitutional: the tax on processors used to fund subsidies to farmers and the regulation of production by using acreage allotments tied to benefit payments.40
Congress responded to the Supreme Court’s ruling on the AAA by quickly passing the Soil Conservation and Domestic Allotment (SCDA) Act in February 1936. This legislation—influenced by droughts in 1934, 1935, and 1936—paid farmers to reduce their production of “soil-depleting” crops, which tended to be defined so as to overlap with the commodities that were overproduced. Payments under the SCDA Act were funded by general Treasury funds rather than processing taxes. In these ways, the SCDA Act avoided the two primary points of contention that the Supreme Court had with the AAA: federal regulation of agricultural production that the Court majority saw as a state power; and processing taxes upon which the Court looked unfavorably. The constitutionality of the SCDA Act was strengthened by the claim that the reduction of soil-depleting commodities was in the interest of the general welfare.
Long-term agricultural policy, however, was set by the passage of the second Agricultural Adjustment Act in 1938. This AAA set price support levels between 52 percent and 75 percent of parity for the basic commodities. Like the SCDA Act, the second AAA dispensed with the processing taxes and instead funded the benefit payments through general Treasury funds. The AAA of 1938 used three methods of controlling production: soil conservation allotments to limit the production of “soil-depleting” crops, marketing quotas, and acreage allotments.
As we have seen, the passage of the AAA had been followed by three conflicts within agriculture: farmers opposed to the AAA, struggles over rural reform, and resistance by agricultural processors. Although each of these conflicts threatened the AAA to varying degrees, by 1940, supply management policy had emerged as the basic principle of long-term U.S. agricultural policy. During the Second World War, supply management policy expanded to cover more agricultural commodities and to offer greater levels of support to and regulation of farmers.41 Still, each of these conflicts around agricultural policy during the New Deal reveals important dynamics that would influence agricultural policy for the rest of the twentieth century: the staunch support of Southern planters and some opposition from the Corn Belt and agribusiness.
Over the next several decades, the retrenchment of supply management policy was pushed by many of the same groups and political coalitions that had earlier fought for its creation and expansion. This period of contraction demonstrates the same processes as the earlier period of expansion, with one additional factor: the unintended consequences of existing policies. That is, the political and economic contexts of this period were shaped in particular ways by the AAA. This policy of supply management, for instance, changed the rural class structure and commodities produced in the South. It also prompted greater exports, particularly of wheat. And, finally, supply management policy boosted overall production of all three commodities and, in some cases, fueled overproduction. None of these policy outcomes was intended during the New Deal and the creation of the AAA.
The first legislative step in the retrenchment of supply management policy was the Agricultural Act of 1954, which reduced price supports. Importantly, this retrenchment policy was pushed by the American Farm Bureau Federation. This was the largest farm organization and, at the time, it tended to represent the interests of farmers in the Corn Belt. Between 1947 and 1954, the Farm Bureau continually called for flexible price supports that would vary in the same direction as market prices: as market prices rose, price support levels would also rise; as market prices fell, support levels would likewise decline.42 This would fundamentally alter the purpose of price supports. Existing price supports, which were set at a fixed level, offered a safety net that ensured that farm income did not fall with market prices. The Farm Bureau’s flexible price supports were not meant to support farm income directly. Instead, the Farm Bureau’s proposal was aimed at correcting discrepancies between supply and demand in agriculture. Thus, the Farm Bureau sought to create a more market-oriented agricultural policy. In its official policy statement leading up to the Agricultural Act of 1954, the Farm Bureau stated, “we do not consider it the responsibility of the Government to guarantee profitable prices to any group.”43 Yet the cotton-wheat coalition remained the most important defender of supply management policy. Why did corn farmers come to oppose a policy that they had supported in previous decades and that other farmers continued to support?
Importantly, the Farm Bureau opposed high supports and production controls not only for corn but for cotton and wheat as well. This position was based on the desire 1) to keep feed grain prices low; and 2) to prevent production controls on other commodities from encouraging competing sources of soybeans and corn. We can see how these two interests led the corn segment to oppose supply management for corn in particular, as well as for other commodities.
First, corn producers’ opposition to high supports for corn was tied to hog production. Between 1945 and 1975, the Corn Belt accounted for between 64 percent and 70 percent of all American hog production. Just three Corn Belt states—Iowa, Illinois, and Indiana—accounted for at least 38 percent of national hog production between 1945 and 1975. This expansive livestock sector shaped the interests of corn producers who received more revenue from hog production than from corn: “Corn producers … do not get their farm income directly from the sale of their crop. After all, between 85 and 90 percent of corn produced is sold in the form of livestock and livestock products.”44 This reliance on hog production created an interest in maintaining low prices for corn, which was the basis of livestock feed. In fact, American meat consumption began to increase swiftly and quite steadily at this time, from 101 pounds per capita annually in 1950 to 155 pounds per capita annually in 1970.45 Coupled with the emerging industrial livestock complex that rested on intensive and industrial production methods, this increasing consumption of animals made supply management policy less necessary for feed grains, especially corn. As Allen Matusow notes, “Since demand for meat is elastic (that is, sales rise more than proportionally as prices fall), many hog farmers saw no advantage in limiting supply to keep prices high.”46 Thus, the corn segment opposed high, rigid supports and production controls for corn.
Second, these same economic interests led the Corn Belt to oppose high supports and accompanying production controls for other basic commodities, not just for corn. Again, price supports were generally contingent on adherence to acreage allotments that limited the number of acres of any particular crop that a farm could produce. For instance, to qualify for price supports for cotton, a large landowner in the South might be limited to planting cotton on only 65 percent of the farm’s total acreage. This removed sizable portions of farmland in the South from traditionally Southern crops and encouraged diversification. Corn Belt farmers feared that price supports and the accompanying production controls for cotton, in particular, might encourage increased grain production in the South. This fear was well-founded, because Southern farmers often produced soybeans, wheat, and corn on land freed from traditional Southern crops such as cotton. For this reason, then, the Farm Bureau opposed price support programs for other basic commodities as well as for corn.
While farmers in the Corn Belt favored supply management policy when they faced low market prices and low demand, their economic interests changed when the meat industry began to expand and when this policy started to spur competition from other regions. Therefore, a new political economic context for corn producers, shaped to a significant extent by New Deal agricultural policy, led the Corn Belt to oppose a policy that they had supported just years before. While the Farm Bureau and Corn Belt opposed supply management policy, cotton and wheat farmers continued to favor price supports and production controls. The political power of the cotton-wheat coalition severely limited the success of the Corn Belt’s drive to weaken supply management policy.47 The economic interests and political power of the cotton-wheat coalition, however, soon changed as this policy continued to alter the political economic context of American agriculture.
While price supports were changed in 1954, production controls remained strong until the passage of the Cotton-Wheat Act of 1964, which instituted more flexible production controls for cotton and wheat. Importantly, this policy was not passed against the will of the cotton-wheat coalition but rather because this political coalition came to favor weakening supply management policy. This change in policy preferences was a clear and unintended consequence of supply management. Supply management policy altered the economic interests and policy preferences of wheat producers in two ways. First, the combination of price supports and production controls prompted an overproduction of wheat. Second, the addition of export subsidies—and food aid—in 1954 as a central supply management program reshaped the global market for wheat in a way that encouraged expanding production rather than controlling it.
The particular combination of production controls and price supports administered under supply management encouraged overproduction in wheat. Production controls were primarily based on acreage rather than the actual volume of production. Farmers faced restrictions on the acreage that they could use in production, but they faced few limitations on the actual volume of commodities that they could produce on each acre. In contrast, price supports were based on volume produced: if the price support for cotton was set at $0.35 per pound, farmers would receive that support price on all cotton that they grew within their acreage allotment. This inconsistent basis of supply management—production controls on acres, price supports on volume—produced a logic for individual farmers that undermined the primary function of the policy: managing the supply of commodities. The policy encouraged farmers to intensify their production on a smaller number of acres in order to receive the optimum benefit from price supports.
Following the Second World War, a technological revolution in chemical fertilizers, pesticides, and herbicides, as well as the spread of mechanization, allowed farmers to significantly increase their productivity (that is, production per acre). Between 1945 and 1970, wheat productivity increased significantly, from 17 to 31 bushels per acre. This, of course, led to fairly constant increases in overall production, from 30 MMT to 37 MMT.48 This increased production was a problem, because demand for wheat did not keep up with the growing supply. Surpluses were largely averted immediately after World War II because agriculture in Europe had been decimated by the war, but European agricultural production began to recover by the early 1950s, leading U.S. wheat exports to decline. Between 1952 and 1961, wheat producers faced a chronic overproduction: the annual surplus of wheat averaged about 28 MMT between 1954 and 1959. In fact, carry-over stocks exceeded production in 1955, 1956, 1959, and 1961–1963. Thus, production controls failed to prevent chronic wheat surpluses during this period. This situation encouraged wheat producers to support supply management policy, but it also led to the creation of a policy that would alter their interests.
In response to this chronic overproduction, the United States created export subsidies through food aid, via Public Law 480 (PL 480), to replace the lost export markets in Europe. Through export subsidies in food aid, the United States found an outlet for its agricultural surpluses in the periphery of the world economy, especially newly independent nations undergoing state formation as European colonial empires collapsed. Between 1945 and 1965, more than 45 new nations formed in Asia, Africa, and the Middle East. In such nations, wheat imports “rose from a base of practically zero in the mid-1950s to almost half of world food imports in 1971.”49 This flow of agricultural commodities reshaped diets and agricultural production throughout the world. Central to this expansion in the global wheat market was PL 480. As Harriet Friedmann notes: “At its peak [in 1965], U.S. aid accounted for 80 percent of American wheat exports and more than 35 percent of world wheat trade.…”50 Consequently, PL 480 became a cornerstone of supply management policy because it created new markets for American wheat exports. This, however, altered the economic interests of U.S. wheat producers because they no longer needed to control production. Expanding export markets allowed them to increase production, thereby prompting wheat producers to begin to oppose strict production controls in the 1960s.
The South had long been an agricultural region that centered on cotton produced in a peculiar rural class structure centered on the plantation system and resting especially on planter–tenant relations and labor-intensive production. Southern cotton production remained largely un-mechanized until the 1960s. In 1957, about 35 percent of cotton in Louisiana and Texas was harvested mechanically, compared to only about 17 percent in Arkansas and Mississippi, and less than 3 percent in Alabama, Georgia, the Carolinas, and Tennessee.51 As late as 1962, most Southern states relied heavily on laborers to pick cotton by hand. Control over a sufficiently large supply of labor was crucial largely because cotton was the most important Southern crop in terms of acreage and value. Created in part to save Southern agriculture—and planters, in particular—from the Depression and falling commodity prices, the AAA and its policy of supply management prompted changes in the rural class structure of the South. The AAA facilitated a shift away from both the plantation system and cotton production.
The rate of tenancy in the South fell sharply from 1930 to 1974. In 1930, 59 percent of Southern farms were tenant-operated, but the tenancy rate fell to less than 20 percent in 1964 and 10 percent in 1974, while the number of Southern farms using sharecroppers fell by about 90 percent by 1954.52 Thus, by the late 1960s, the plantation system no longer characterized Southern agriculture. How did the AAA contribute to this fundamental change? Federal subsidies from price supports and production controls began to sever traditional landowner–tenant relations as planters attempted to keep most—sometimes all—of the AAA payments. T. J. Woofter and his colleagues found that planters kept almost 90 percent of AAA payments in the early New Deal.53 Many planters avoided sharing AAA payments with tenants by simply evicting them.54 AAA payments facilitated these trends by allowing planters to replace tenants and sharecroppers with wage-laborers, as well as through mechanization. While machines harvested only 6 percent of U.S. cotton in 1949, this figure rose to 23 percent in 1955, 51 percent in 1960, and 96 percent in 1968.55 Such mechanization, funded in part by federal subsidies, gradually eliminated the need for tenants and sharecroppers as plantations shifted toward more capital-intensive production.
Furthermore, supply management policy prompted diversification in Southern agriculture, which also played a role in changing the class structure. Production controls required that farmers limit their production of basic commodities, including cotton and tobacco. Consequently, Southern agriculture began to diversify as farmers grew other crops on land formerly used for cotton. Southern soybean production expanded from fewer than 700,000 acres in 1945 to 18.4 million in 1975. Conversely, the number of acres devoted to cotton production fell from a high of 23 million in 1949 to 8.9 million in 1975. Soybean acres had surpassed cotton acres by 1966. Along with increased acreage, of course, came increased production: Southern soybean production increased from 35 million bushels in 1950 to 432 million bushels in 1975. Much of the expansion in Southern soybean production occurred in states that had been the highest cotton producers. Alabama, Arkansas, Georgia, Mississippi, and Texas—the top cotton states from 1938 through 1950—accounted for about 60 percent of the South’s soybean production from 1950 to 1975. Increased soybean production was at the heart of the diversification of Southern agriculture following World War II, and it played an important role in the transformation of the rural class structure.
The consequences of New Deal agricultural policy—cash influx, mechanization, and crop diversification—contributed to a shift in the Southern class structure by significantly undermining tenancy. This change mirrored the national trends that emerged as a result of reshaping agriculture and farming through supply management policy.
Beyond the unintended political consequences of supply management policy, there were also unforeseen effects on the structure of the farming sector and the environment. Land ownership and production became more concentrated, and each of these trends was tied to the distribution of subsidies. As farms became larger and more capital-intensive, they used more technology—such as machinery, as well as chemical fertilizers, pesticides, and herbicides—that were tied to economies of scale. These trends in agriculture often had deleterious effects on the environment.
As Figure 10.2 shows, the number of farms fell sharply between 1930 and 2000. At the start of that period, there were more than 6 million farms in the United States, but the number fell to 5 million by 1955 and to 2.8 million by 1975. In 2006, there were only 2 million farms in the United States. At the same time that the number of farms declined, the size of the average farm increased from about 151 acres in 1930, to 258 acres in 1955, and to 391 acres in 1975. Through the distribution of subsidies, supply management policy contributed to this greatly increased size of U.S farms. This policy based price supports and production control payments on historical production: that is, the more a farm had produced in the past, the more acres it could produce going forward. This “historical base,” therefore, reinforced and even built on existing inequalities in American agriculture by giving the largest subsidies to the largest farms, which then had the ability to invest in more technologies and more land.
Figure 10.2 Number of Farms and Average Farm Size in the United States, 1930–2006.
A mutually reinforcing relationship exists between farm size and the use of technologies that often rely on economies of scale and, of course, capital investment. The conventional pesticide use increased from 366 million pounds of active ingredient in 1964 to 826 million pounds in 1980.56 These intensive agriculture techniques have also discouraged diversity in production, as the average number of commodities produced on farms has decreased from about 4.5 in 1930 to fewer than two in 2002.57 The increased use of chemicals in farming has contributed to toxic runoff and, in turn, to a “dead zone” in the Gulf of Mexico: “One of the chief culprits behind this dead zone is American agriculture and its countless tributaries of fertilizer, pesticides and animal feces” ultimately carried by the Mississippi River.58
Concentration in farming has also occurred in other sectors of agriculture, most notably in meat production. The dramatic increases in the production of soybeans, corn, and other feed grains after 1945 helped fuel the expanding industrial livestock complex. As noted earlier, per capita meat consumption increased from about 50 percent from 1950 to1970.59 As David Nibert notes, “Large confined animal feeding operations (CAFOs) allowed enormous numbers of animals to be raised in tiny areas by feeding them on surplus grain.”60 The large operations, including feedlots for beef cattle, consume large amounts of water and produce substantial amounts of pollution, and the methane produced is a significant contributor to global warming. Such dangers to the environment stemming from supply management policy and the industrial food system that it helped to create are truly ironic, given that the AAA was created in part to help stem the tide of environmental degradation found in agriculture throughout the nation.
One important lesson of New Deal agricultural policy is the extent to which a policy may eventually come to reinforce existing social inequalities, especially in its longer-term trajectory, even if its intention is the opposite. While New Deal agricultural policy included elements that aimed to alleviate rural inequality, particularly in the South, these elements fell victim to elimination in less than two decades. The “liberal purge” in the USDA and AAA removed those interested in land reform from positions of significant policy influence, and the financial strangling of the Farm Security Administration (originally the Resettlement Administration), which had sought to purchase sub-marginal land owned by poor farmers and resettle them in group farms on land more suitable for efficient farming, ended this endeavor of rural redistribution nearly completely.61
By contrast, the elements of New Deal agricultural policy that persisted through the twentieth century reinforced the inequality and increasing concentration in agriculture. The combination of price supports and production controls rewarded larger farmers who had greater production and used more intensive methods, thereby encouraging concentration in farming. The number of farms declined, while the average farm size increased. These programs also encouraged and enabled more intensive farming with increased mechanization and greater use of other agricultural technologies, including chemical pesticides and herbicides, with consequent harm to the environment.
In the formation of the AAA, challenges emerged from various political quarters, including from groups promoting “liberty” and from corporations, among others. And these challenges went all the way to the Supreme Court. This process looks familiar to observers of the first Obama Administration, with the rise of the Tea Party and constitutional challenges to the Affordable Care Act. The similarities in political rhetoric, corporate support, and general political response are striking and should prompt observers to consider implications for the longevity of policies.
Over the long term, the beneficiaries of supply management policy tended to be increasingly well-off farmers, especially those in the South—despite challenges that used the rhetoric of “liberty” and “individual independence.” Government policies resting on extensive regulation of the market and income support are often seen as leftwing, socialist, or un-American. Certainly, such policies are often understood to be antithetical to the market economy and to capitalism. Yet, the primary supporters of supply management policy were Southern planters, never known for supporting socialist policies. In fact, in a congressional committee hearing in 1958, Southern Democrats and Farm Bureau representatives nearly came to blows over the insinuation that the former were advocating a socialist policy.62 In reality, however, advocates of supply management policy were truly “capitalists against markets,” capitalists who sought to restrict market processes to protect their own economic and class interests.63 This has been evident even among some of President Obama’s policies that critics have accused of being “socialist,” including the bank and auto industry bailouts and a healthcare reform that stands to boost the profits of the private insurance and pharmaceutical industries at the same time as it boosts the access to health care of millions of uninsured. Such support for policies restricting the market while offering social support no doubt helps explain why the long-term trajectories of policies such as supply management can increasingly favor the well-off and powerful. The crisis in the world economy in 2008 also harks back to the 1930s, in that each was preceded by a crisis in agriculture that brought unstable prices, some degree of environmental degradation, and a faltering system of international trade in agriculture. First, in the 1920s, global agricultural markets displayed instability in prices and problems with overproduction years before the world economy slid into depression. Likewise, global agricultural prices over the past twenty-five years have been quite unstable, rising dramatically in 2007 and 2008, and setting off a global food crisis. Alleviating the earlier crisis required government regulation that was successful in stabilizing prices for more than three decades. Stabilizing agricultural prices in this era may require at least a reconsideration of the successes and failures of New Deal agricultural policy.
Second, while the environmental crisis of the Dust Bowl was more immediate and clear, perhaps, than the environmental degradation related to agriculture over the past several decades, they share a link to production methods prompted by national policy. In the decades leading up to the Dust Bowl years, the federal government encouraged increased settlement and the expansion of agriculture on the Great Plains. Then, in the middle of the twentieth century, supply management policy developed in such a way as to prompt intensive and industrial agricultural production with increased reliance on chemical fertilizers, pesticides, and herbicides.64 The use of these inputs has contributed to environmental degradation to rivers and aquifers and harm to wildlife. Coupled with a similar development in the production of animals for food, this kind of industrial agriculture has been one of the contributors to global climate change. It has also led to a sharp increase in water consumption for irrigation on some parts of the Great Plains and in feedlots and the animal slaughtering process, each of which has reduced water table levels in, for example, the Ogallala aquifer.65 Thus, we need to pay attention to the possible unintended consequences that agricultural policy can have for the environment, as well as how federal policy can help alleviate environmental crisis, such as it did with the Soil Conservation Service.
Third, the system of world trade in agriculture has faltered over the past several decades. Once an international bastion of government regulation and support, agriculture has faced international pressures to liberalize, a trend that began in the 1980s. Yet, as the World Trade Organization (WTO) has tried to liberalize the world economy, its ministerial meetings in Cancún, Mexico, and Doha, Qatar, fell apart around the issue of agricultural liberalization, with peasant-farmer groups and environmentalists calling for more regulation. Similarly, in a world trading system based on the idea of so-called free trade, agricultural trade leading up to and during the Great Depression broke down, resulting in greater trade barriers and tariffs, greater price instability, and market collapse.66
Furthermore, each of these agricultural crises brought political instability. In the 1930s, farmers in some regions revolted as prices and incomes plummeted. In the United States, for example, the Farmers’ Holiday movement picketed, engaged in road blockades, dumped milk, destroyed crops, disrupted and halted trains transporting livestock or crops, and challenged and disrupted government proceedings.67 The recent food crisis also saw world hunger rise significantly and led to food riots that contributed to political instability in dozens of countries, including Argentina, Mexico, India, Italy, Bangladesh, Egypt, Somalia, and Morocco. In 2008, for example, a week of food riots in Haiti led to the removal of its prime minister.68 Thus, the political consequences of agricultural crises are quite significant.
Given all of this, we need to remember that the Great Depression and the current economic recession each stemmed from a world economic crisis. We should recognize that the AAA improved the economic health of agriculture and helped bolster the entire economy: “Government payments to farmers benefitted merchants and mail order houses. Even the staunchly conservative Sewell Avery, head of [department store chain] Montgomery Ward, conceded that the AAA had been the single greatest cause in the improvement of Ward’s position.”69 The practices and rules set forth by the Soil Conservation Service played a key role in alleviating the environmental crisis of the Dust Bowl.
Nonetheless, New Deal agricultural programs were not unquestionably successful. For example, farm income in 1936 was still below what it had been in 1929; wheat and corn prices did not reach their levels of the mid-1920s until the end of World War II; and wheat and cotton production had risen only to pre–New Deal levels by 1938. Some scholars argue that this was because the U.S. government was too weak to produce an effective solution to the Depression.70 The Great Depression, however, was a worldwide economic depression that could not be solved by policy changes within one nation. This fact made many New Deal policies relatively ineffective and played a role in the limitations of AAA and other programs. Therefore, as the Obama Administration continues to develop responses to the ongoing recession, it is useful to remember the limits of national policies in addressing turmoil in the world economy, whether in food and agriculture or in finance and industry.
1. Before the financial crisis in 2008, a global food crisis struck. Food prices rose dramatically, bringing increased world hunger and political instability around the globe. For example, see Bill Winders, “The Food Crisis and the Deregulation of Agriculture,” Brown Journal of World Affairs, 18, no. 1 (2011): 83–95.
2. United States Department of Agriculture, Agricultural Statistics, 1942 (Washington, DC: Government Printing Office), 662, Table 736.
3. A debate exists as to whether a depression actually hit agriculture during the 1920s. For a brief discussion of this debate, see David E. Hamilton, From New Day to New Deal: American Farm Policy from Hoover to Roosevelt, 1928–1933 (Chapel Hill: The University of North Carolina Press, 1991), 9–10. Interestingly, gross farm income did not fall between 1925 and 1929, even though market prices fell during this period.
4. See, for example, Pete Daniel, Breaking the Land: The Transformation of Cotton, Tobacco, and Rice Cultures since 1800 (Chicago: University of Illinois Press, 1985); and John Mark Hansen, Gaining Access: Congress and the Farm Lobby, 1919–1981 (Chicago: The University of Chicago Press, 1991).
5. United States Department of Agriculture, Agricultural Statistics, 1957 (Washington, DC: Government Printing Office, 1957), 579, Table 683.
6. United States Census Bureau, Statistical Abstract of the United States, 1933 (Washington, DC: Government Printing Office), 566, Table 538.
7. John L. Shover, Cornbelt Rebellion: The Farmers’ Holiday Association (Urbana: The University of Illinois Press, 1965), 16. Gilbert and Howe state that “In late 1932, about half of Midwestern farms were threatened by foreclosure.” Jess Gilbert and Carolyn Howe, “Beyond ‘State vs. Society’: Theories of the State and New Deal Agricultural Policies,” American Sociological Review, 56 (1991): 209.
8. Calculated from United States Department of Agriculture, Agricultural Statistics, 1941 (Washington DC: Government Printing Office), 123, Table 155. Between 1929 and 1938, cotton carry-over averaged 6.5 million bales a year—nearly three times that of the period 1921–1925. Carry-over stock reached 9.7 million bales in 1931 before falling to 4.4 million in 1936.
9. Hamilton, 11.
10. After President Warren Harding died in 1923, Coolidge became president and then won re-election in 1924.
11. Thus, this “Farm Bloc” refers to a specific organization formed by representatives and senators from farm states. Over the years, the term “farm bloc” (without capital letters) has come to refer to “informal alliances of farm state lawmakers” and sometimes farm organizations. See Hansen, 31.
12. For a more complete discussion and history of these early political solutions, see Chapter 2 in Bill Winders, The Politics of Food Supply: U.S. Agricultural Policy in the World Economy (New Haven, CT: Yale University Press, 2009). See also Gilbert C. Fite, George N. Peek and the Fight for Farm Parity (Norman: University of Oklahoma Press, 1954).
13. Robert E. Snyder, Cotton Crisis (Chapel Hill: The University of North Carolina Press, 1984), 24.
14. Assuming that the cotton holiday had the effect of raising cotton prices, the primary beneficiaries of Long’s proposal would have been cotton farmers, themselves. But such a plan would have had negative effects on sharecroppers and tenants, local merchants, and farm suppliers, as well as cotton ginners and their employees.
15. Hansen, 70.
16. Long rescinded Louisiana’s holiday legislation; legislation in other states (e.g., Mississippi and South Carolina) expired due to sunset clauses that rested on other Southern states’ passing reduction laws (which did not happen); and state courts declared Texas’s reduction legislation unconstitutional. Snyder, 126.
17. M. C. Halleberg, Policy for American Agriculture: Choices and Consequences (Ames: Iowa State University Press, 1992), 345.
18. In 1933, the AAA paid farmers in the South to plow under portions of their cotton crop to reduce production because the planting season had already passed when the AAA was enacted in March of that year.
19. Hansen, 78; and Paul L. Murphy, “The New Deal Agricultural Program and the Constitution,” Agricultural History, 29 (1955): 165.
20. David Eugene Conrad, The Forgotten Farmers: The Story of Sharecroppers During the New Deal (Urbana: University of Illinois Press, 1965), 23.
21. For a fuller discussion, see Winders, Politics of Food Supply, 56–58; or Gilbert and Howe.
22. In addition, the Senate’s Minority Leader was Charles McNary, a Republican from Oregon—a wheat state—who favored government support for farmers.
23. See Ira Katznelson, When Affirmative Action Was White: An Untold History of Racial Inequality in Twentieth-Century America (New York: W. W. Norton, 2005); and Bill Winders, “Maintaining the Coalition: Class Coalitions and Policy Trajectories,” Politics & Society, 33 (2005): 387–423.
24. Calculated from U.S. Congress, Congressional Record (Washington, DC: Government Printing Office, 1933), 3121.
25. Lawrence J. Nelson, King Cotton’s Advocate: Oscar G. Johnston and the New Deal (Knoxville: University of Tennessee Press, 1999).
26. Jack Temple Kirby, “The Transformation of Southern Plantations, c. 1920–1960,” Agricultural History 57 (1983): 263–264.
27. United States Department of Agriculture, Agricultural Statistics, 1957 (Washington, DC: Government Printing Office, 1957), 597, Table 683.
28. As I explain in the next section, the economic interests of farmers2 in the Corn Belt were shaped by ties to the livestock industry.
29. Jean Choate, Disputed Ground: Farm Groups That Opposed the New Deal Agricultural Program (Jefferson, NC: McFarland & Company, 2002).
30. The NFU also opposed production controls that left farm acres idle and destroyed livestock during a period of hunger and poverty. Simpson argued that agricultural production should not be reduced until all Americans had adequate diets. Choate, 134.
31. Choate, Chapter 2; and Conrad, 28. The Missouri Farmers, Association and the Farmers Holiday Association also favored cost-of-production over parity.
32. “6,000,000 Total Ends Pig Buying,” New York Times, September 30, 1933, 25. The FPTRA struggled unsuccessfully to get the federal government to return to farmers the money they had lost due to the processing tax on hogs. See Choate.
33. The farm organizations opposed to the AAA had little influence, in part because these groups were relatively small (only hundreds of members) and the real political power was held by Southern Democrats, the Farm Bureau, and those in the USDA—all of whom favored the AAA.
34. Conrad, Forgotten Farmers, 52. Sharecropping meant that “the [land]owner supplies everything used in production (including housing) except labor and furnishes half the cost of seed and fertilizer.” Merle Prunty, Jr., “The Renaissance of the Southern Plantation,” Geographical Review, 45 (1955): 468. Tenants, in contrast, rented portions of land and supplied the “cultivating power” (usually mules) and implements and customarily paid two-thirds of the seed and fertilizer costs”; ibid., 474. Some tenants were cash-tenants, who did not share their crop with the landowner. However, these were less common than sharecroppers or share-tenants.
35. Jess Gilbert, “Eastern Urban Liberals and Midwestern Agrarian Intellectuals: Two Group Portraits of Progressives in the New Deal Department of Agriculture,” Agricultural History, 74 (2000): 162–180.
36. Donald H. Grubbs, Cry from the Cotton: The Southern Tenant Farmers’ Union and the New Deal (Chapel Hill: University of North Carolina Press, 1971), 34. Grubbs notes that Chester Davis “in matters affecting the cotton reduction program … consulted, naturally enough, with men who ‘knew’ the South: men like the county agents. These were officials, in other words, who represented the planters,” ibid., 33.
37. Sidney Baldwin, Poverty and Politics: The Rise and Decline of the Farm Security Administration (Chapel Hill: The University of North Carolina Press, 1968), 81.
38. Ibid., 82.
39. William M. Butler was a cotton manufacturer and a receiver of Hoosac Mills. Murray R. Benedict, Farm Policies of the United States, 1790–1950: A Study of Their Origins and Development (New York: The Twentieth Century Fund, 1957), 348.
40. For a discussion of the Supreme Court’s decision and reasoning, see ibid.; Conrad Black, Franklin Delano Roosevelt: Champion of Freedom (New York: Public Affairs, 2003), 377; R. Douglas Hurt, Problems of Plenty: The American Farmer in the Twentieth Century (Chicago: Ivan R. Dee, 2002), 80–81; Arthur M. Schlesinger, Jr., The Age of Roosevelt: The Politics of Upheaval (Boston: Houghton Mifflin, 1960), 470–474; and Winders, Politics of Food Supply, 65–69.
41. Winders, Politics of Food Supply, 69–73.
42. Alternatively, flexible price supports could fluctuate inversely with market prices. In this situation, price support levels would be reduced as market prices rose, making supports almost irrelevant in a strong market. But support levels would increase as market prices fell, thereby providing a safety net if prices collapsed. The Farm Bureau was not advocating flexible price supports of this type.
43. United States House of Representatives, “Long Range Farm Program,” Hearings before the House Committee on Agriculture, 83rd Congress, 2nd Session (Washington, DC: Government Printing Office, 1954), 2747.
44. Quoted from the testimony of Allan Kline, president of the Farm Bureau. United States House of Representatives, “General Farm Program,” Hearings before the Special Subcommittee of the Committee on Agriculture, 81st Congress, 1st Session (Washington, DC: Government Printing Office, 1949), 438.
45. Economic Research Service, USDA, “Food Availability (Per Capita Data System),” accessed April 4, 2010, available at http://www.ers.usda.gov/data-products. Note that this increase in per capita meat consumption occurred at the same time as the U.S. population expanded dramatically, with the consequence that total meat production skyrocketed.
46. Allen J. Matusow, Farm Policies and Politics in the Truman Years (New York: Atheneum, 1967), 136.
47. For a detailed discussion of the political battle between corn interests and the cotton-wheat coalition, see Winders, Politics of Food Supply, 85–93.
48. This period (1945–1970) understates the change because 1970 was the only year after 1967 in which wheat production did not approach or surpass 40 MMT. Between 1967 and 1973, annual wheat production averaged 41 MMT, and annual wheat production never fell below 48 MMT after 1974.
49. Philip McMichael, Development and Social Change: A Global Perspective (Thousand Oaks, CA: Pine Forge Press, 2000), 63.
50. Harriet Friedmann, “The Family Farm and the International Food Regime,” in Peasants and Peasant Societies: Selected Readings, 2nd. ed., Teodor Shanin, ed. (New York: Blackwell, 1987),. 253; emphasis in original.
51. United States Department of Agriculture, Statistics on Cotton and Related Data, 1920–1973, Statistical Bulletin No. 535 (Washington, DC: Government Printing Office), 218.
52. Calculated from U.S. Census Bureau, Census of Agriculture, 1959. After 1959, the Census of Agriculture stops counting sharecroppers and instead collapses sharecroppers into the larger category of “share-tenants.” I estimated the number of sharecroppers for 1964 by assuming that the proportion of sharecroppers to share-tenants remained the same as in 1959, which is a conservative assumption.
53. T. J. Woofter, with Gordon Blackwell, Harold Hoffsommer, James G. Maddox, Jean M. Massell, B.O. Williams, and Waller Wynne, Jr., Landlord and Tenant on the Cotton Plantation (Washington, DC: Works Progress Administration, Research Monograph V, 1936), 66, Table 24.
54. Gilbert and Howe, “Beyond,” 212; and Grubbs, Cry from the Cotton, 22–26.
55. United States Department of Agriculture, Statistics on Cotton, 218.
56. Timothy Kiely, David Donaldson, and Arthur Grube, “Pesticides Industry Sales and Usage 2000 and 2001: Market Estimates” (Washington, DC: U.S. Environmental Protection Agency, 2004), 31, Table 5.9.
57. Carolyn Dimitri, Anne Effland, and Neilson Conklin, “The 20th Century Transformation of U.S. Agriculture and Farm Policy” Economic Information Bulletin no. 3, (Washington, DC: Economic Research Service, USDA, 2005), 5, Figure 4.
58. Christopher D. Cook, Diet for a Dead Planet: Big Business and the Coming Food Crisis (New York: The New Press, 2006), 171. See also Daniel Imhoff, Food Fight: The Citizen’s Guide to a Food and Farm Bill (Healdsburg, CA: Watershed Media), 15.
59. Economic Research Service, USDA, “Food Availability (Per Capita) Data System,” accessed April 4, 2010, available at http://www.ers.usda.gov/data-products/food-availability-(per-capita)-data-system.aspx.
60. David Nibert, “The Fire Next Time: The Coming Cost of Capitalism, Animal Oppression and Environmental Ruin,” Journal of Human Rights and the Environment, 3 (2012): 147.
61. Critics, including the Farm Bureau, strongly opposed the FSA as an experiment in collectivizing agriculture.
62. See Winders, Politics of Food Supply, 2–6.
63. Peter Swenson offers an excellent analysis of some political-economic contexts that can lead capitalists to oppose markets. Peter Swenson, Capitalists Against Markets: The Making of Labor Markets and Welfare States in the United States and Sweden (New York: Oxford University Press, 2006).
64. Cook, 175–179.
65. John Opie, Ogallala: Water for a Dry Land (Lincoln: University of Nebraska Press, 1993); and Michael Pollan, “Power Steer,” New York Times Magazine, March 31, 2002, accessed May 31, 2011, available at http://www.nytimes.com/2002/03/31/magazine/power-steer.html?pagewanted=all&src=pm.
66. For information on the international regimes governing food and agriculture during these two periods, see Bill Winders, “The Vanishing Free Market: The Formation and Spread of the US and British Food Regimes,” Journal of Agrarian Change, 9, no. 3 (2009): 315–344.
67. See, for example, John L. Shover, “The Farmers’ Holiday Association Strike, August 1932,” Agricultural History 39 (1965): 196–203. Shover notes also the influence of this movement: “Elected political officials in the Middle West and nation could not ignore such dramatic evidence of rural discontent,” ibid., 202.
68. Winders, “Food Crisis.”
69. William E. Leuchtenburg, Franklin D. Roosevelt and the New Deal (New York: Harper & Row, 1963), 77.
70. See, for example, Kenneth Finegold and Theda Skocpol, State and Party in America’s New Deal (Madison: The University of Wisconsin Press, 1995).