From the National History Center , Perspectives Daily

Ground Strategy

How Federal Farm Policy Shaped America

Dane Kennedy | Sep 7, 2018

In the early 1980s the local TV news programs in Lincoln, Nebraska, began with a weather report, followed by spot prices for agricultural commodities. As a new, somewhat smug transplant from Berkeley, California, I was both amused and exasperated by this preoccupation with rain and grain, which I initially attributed to the absence of any “real” news to report. It took me a while to realize that the joke was on me: the agricultural economy was essential to the livelihoods of everyone in the state, including naïve young academics like myself, and in the 1980s it was in crisis. As the scale of that crisis dawned on me, I began to realize that the fate of the farmers hinged largely on the actions of the feds.

A wheat field in Idaho.

A recent National History Center briefing focused on the history of federal farm policy in the United States.

A joint committee is currently working to reconcile the two versions of an omnibus farm bill that the House and Senate approved earlier this summer. It is one of the few big pieces of legislation that our currently dysfunctional Congress is likely to pass. How did this immense piece of legislation become one of the few “must pass” measures that gets renewed every five years or so? How did the federal government acquire such an important role in agricultural policy? And how has that policy changed in response to urbanization, globalization, and other transformative developments? These are some of the questions that the panelists addressed in the National History Center’s recent briefing on the history of federal agricultural policy.

The first significant intervention by the government in the agricultural economy came when the New Deal instituted programs to rescue farmers from the collapse of commodity prices during the Great Depression. These programs included subsidies for producers and controls on surpluses. In his remarks at the briefing, David Hamilton, a University of Kentucky historian of American farm policy, made the key point that these programs created a new politics of agriculture. The outbreak of the Second World War and the need to boost production and maintain food security gave further impetus to federal management of the agricultural economy. Political pressures from farmers and their congressional supporters ensured that many of these policies instituted in this era remained in place after the war.

The result was a revolution in productivity, but because US farmers remained largely detached from global markets, commodity surpluses piled up. By the early 1960s, agricultural programs had become huge drain on the treasury. Sarah Phillips, a historian at Boston University, cited a stunning statistic: back then, the government spent more than $1 million a day simply to store surplus commodities, making it the third largest item in the federal budget behind defense expenditures and interest on the debt. President Kennedy tried to address the problem by guaranteeing farmers high prices in return for reduced output, but the plan fell victim to a campaign led by the Farm Bureau, the main lobbying arm of agricultural interests, which accused the administration of Soviet-style central planning. Instead, Congress worked with producers to pass a series of agricultural bills that shifted federal policy to a market-based compensatory payment system. In addition, a deal was struck with urban legislators that coupled food stamps for the poor (SNAP) to the new system of subsidies for farmers. This grand bargain, Phillips observed, has endured, ensuring the renewal of the omnibus farm bill ever since.

Still, the shape and scope of farm legislation has undergone significant changes over the past five decades. Anne Effland, a historian who serves as senior economist for domestic policy at the US Department of Agriculture, described these changes in her presentation at the briefing. The post-1970 period brought a dramatic surge in global demand for US farm commodities, leading to fewer acreage controls and increased production. It also brought increased competition and greater risk, as became evident in the 1980s with the ballooning of bankruptcies among small farmers and the Farm Aid concerts that Willie Nelson organized to highlight the problem. While the size of farms increased, the number of farmers declined: family farms were hit particularly hard.

The federal government responded by promoting crop insurance, improved access to credit, and rural development programs for job training, education, and housing assistance. In recent decades, environmental concerns and consumer interests have garnered increasing attention. Updated versions of the farm bill have addressed issues including land preservation and the protection of wetlands, food safety, nutrition, and organic farming. Among the repercussions of the 2008 financial collapse was a doubling of expenditures for food assistance (SNAP and school lunches, for example). This has led to efforts by House Republicans to tie the renewal of the agricultural bill to the inclusion of work requirements for those who qualify for assistance. Most recently, agriculture finds itself in the crosshairs of President Trump’s trade disputes with China and other countries.

While it remains to be seen how the conference committee will resolve the differences between the House and Senate farm bills’ approach to food stamps, conservation funding, and several other issues, Congress is widely expected to pass some version of this omnibus legislation in the near future. It is oddly reassuring to see that such a monument to old-fashioned legislative horse-trading between rural and urban interests and red and blue state representatives seems likely to survive the partisan bickering that has otherwise brought Congress to a virtual standstill. The history of the farm bill gives new meaning to the notion of being grounded.


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