History of the Farm Bill

About the Briefing

This handout was created for the AHA’s August 20, 2018 Congressional Briefing offering historical perspectives on federal agricultural policy.  Panelists Sarah Phillips (Boston Univ.), David Hamilton (Univ. of Kentucky), and Anne Effland (USDA) discussed how the country has shaped and been shaped by federal agricultural policies since the 1930s and why the Farm Bill (reauthorized by Congress approximately every five years) has become so important to so many different groups.

The US Farm Economy, the Great Depression, and the New Deal

• Early 20^th century farm economy was poorly organized, inefficient, with stagnant productivity and too many workers
  • It had no capacity for managing risk, no capacity for containing farming’s environmental externalities, and no capacity for resiliency when confronted with trade, financial, or business-cycle shocks
• The Great Depression was a mammoth shock to the farm economy
  • A combination of trade, financial, and business-cycle collapse created for agriculture a collapse of asset values, vanished liquidity, wholesale de-leveraging, and retreat from market economy
• Despite stemming the 1930s farm deflation, restoring farm liquidity, sustaining adoption of productivity-enhancing innovations, and making possible the stunning contributions of American agriculture to WWII needs, New Deal programs often exacerbated the plight of low-income, low-resource farm workers
• A set of policies and programs that enabled the farm economy to survive the Great Depression, that avoided a painful, immediate shake-out of two or three million smaller, less competitive operators, that encouraged the sustained adoption of productivity-enhancing farming methods that in turn made possible the agricultural productive revolution of 1940-1970
  • The policies and programs, however, were in the long run better suited to the creation of fewer and highly productive farm unites without addressing the system consequences for rural America
• The US farm economy after WWII was heavily regulated, subsidized, and protected

The Major Policy Shifts of the 1960s that Created the Modern “Farm Bill”

• There was a key reshuffling of federal farm policy in the 1960s that did two things:
  • required farmers to accept market prices as the basis for much of their business planning (even as other forms of commodity support continued)
  • coupled commodity supports with more food aid for the poor–this was the origins of the food stamp program, which later became SNAP
• Why did these changes occur at that moment?
  • At the end of the 1950s a crisis point within the New Deal programs led to a dramatic increase in agricultural surpluses
    • At this point, owing to commodity storage costs, agricultural expenditures made up the third largest item in the federal budget after defense outlays and interest on the debt
  • The Kennedy Farm Program was a controversial proposal that would have guaranteed farmers high fixed prices in return for actually reducing output and agreeing to mandatory marketing quotas, including proposed measure for both feed grains and wheat
    • Failed for two main reasons: 1) feed grains were voted down by Congress by representatives from areas of increasing meat and dairy production that did not support actions that would raise the price of feed grains 2) wheat referendum voted down by farmers who correctly assumed the government would not follow through on threats to let prices fall as far as the market would go
  • After the Kennedy Farm Program
    • A new funding formula developed that saved commodity programs by marrying them to food assistance
    • Many of the commodity support programs started to rely on direct, compensatory payments (deficiency payments) rather than on price or parity guarantees
  • A new and enduring budgetary bargain took shape in Congress: the agricultural committees rolled crop programs into a single bill, added money for food assistance, which combined enough urban and rural votes on the floor

Evolution of Federal Agricultural Policy since 1970

• Has largely been a response to the growing globalization of agricultural trade, structural changes in the farm sector, and the increasing influence of consumers on food production and use
  • Current Farm Bills reflect these influences in the transition from price and income support to risk management in commodity programs; the expansion of soil conservation into broader environmental programs; the growth of support for organic production, local and regional markets, and beginning and socially disadvantaged farmers; the addition of rural economic development programs; and the growing role of food assistance in the Farm Bill debate
• Expanding global demand and production have created both opportunity and volatility, through new customers for agricultural products, as well as new competitors
  • In response, federal agricultural policy moved towards programs that could help facilitate trade and smooth the volatility of variability in demand and supply
• Structural changes in the farm sector had been accelerating during the 1950s and 1960s, leading to a sharp decline in the number of farms and a sharp rise in the average size of farms
  • Farm and rural populations declined, jobs in farming, declined, and rural communities began to look to other types of economic activities
  • Farm policy no longer served the needs of most rural communities, leading to the inclusion in the Farm Bill of new policies aimed at assisting rural economic development
• The loss of mid-size family farm operations during the Farm Crisis of the 1980s led to renewed concern about preserving family farms, which joined with growing consumer concerns about the environmental impacts of farming and about food safety, quality, nutrition, and access to influence farm policy debates
  • These new concerns led to new types of policies aimed not at supporting farm income and productivity, but at constraining agricultural production to meet environmental and food production preferences of non-farmers

Participant Biographies

Sarah Phillips is assistant professor of history at Boston University. She is the author of This Land, This Nation: Conservation, Rural America, and the New Deal, and, with co-author Shane Hamilton, The Kitchen Debate and Cold War Consumer Politics. She has written essays and articles on environmental history, antebellum reform, transatlantic agricultural developments, the interwar economy, and the conservation and environmental policy of state governors. Her current book project, The Price of Plenty: From Farm to Food Politics in Postwar America, examines the domestic politics sustaining the massive farm surpluses of the post-World War II era that established the United States as the predominant and most problematic of the state actors in the international food regime.

David Hamilton is associate professor of history at the University of Kentucky.  He studies twentieth-century U.S. political and policy history. His book From New Day to New Deal: American Farm Policy from Hoover to Roosevelt, 1928-1933 was awarded the Theodore Saloutos Prize. He has published articles in the Journal of American History, the Journal of Southern History and Agricultural History as well as essays in edited collections. He edited Problems in American Civilization: The New Deal (1999). His current projects include a biography of the economist Mordecai Ezekiel, a study of the Hoover presidency, and a study of early twentieth-century American state-building.

Anne Effland is Senior Economist for Domestic Policy in the Office of the Chief Economist, USDA and formerly a historian with USDA’s Economic Research Service. Her historical research has ranged widely, including studies of U.S. farm and rural policy; rural labor, women, and minorities; and institutional history of USDA. Anne has published frequently in Agricultural History, as well as in several agricultural economics and food policy journals and in a number of edited collections. She has been a Fellow of the Agricultural History Society since 2011 and served as its President in 2008-2009.  She received the Gladys Baker Award for lifetime achievement in the field of agricultural history from the Society in 2018.  She has also spoken to officials and agricultural organizations worldwide on the evolution of U.S. farm policy, farm policy design, and domestic agricultural support measurement.