Agricultural policy of the United States
Encyclopedia
Agricultural policy of the United States is the governing policy
of agriculture in the United States
and is composed primarily of the periodically-renewed federal U.S. farm bill
s.
, the Homestead Act
, which granted 160 acre (0.6474976 km²) townships, and the Morrill Act
of 1862, which initiated the land-grant college system, one in a long series of acts that provided public support for agricultural research and education. In 1933, with many farmers losing money because of the Great Depression
, President Franklin D. Roosevelt
signed the Agricultural Adjustment Act
, which created the Agricultural Adjustment Administration (AAA). The AAA began to regulate agricultural production by destroying crops and artificially reducing supplies. It also offered subsidies to farmers to encourage them to be willing limit their production of crops. The Supreme Court later struck down the AAA as unconstitutional, so in 1938 the Soil Conservation and Domestic Allotment Act was passed, which essentially created a similar organization for distributing farmer subsidies.
, the destructive effects of the war and the surrender burdens enforced on the Central Powers
of Europe bankrupted much of Europe, closing major export markets in the United States and beginning a series of events that would lead to the development of agricultural price and income support policies. United States price and income support, known otherwise as agricultural subsidy
, grew out of acute farm income and financial crises, which led to widespread political beliefs that the market system was not adequately rewarding farm people for their agricultural commodities.
Beginning with the 1921 Packers and Stockyards Act
and 1922 Capper-Volstead Act
, which regulated livestock and protected farmer cooperatives against anti-trust suits
, United States agricultural policy began to become more and more comprehensive. In reaction to falling grain prices and the widespread economic turmoil of the Dust Bowl
and Great Depression
, three bills led the United States into permanent price subsidies for farmers: the 1922 Grain Futures Act
, the 1929 Agricultural Marketing Act, and finally the 1933 Agricultural Adjustment Act
- the first comprehensive food policy
legislation. Out of these bills grew a system of government-controlled agricultural commodity
prices and government supply control (farmers being paid to leave land unused). Supply control would continue to be used to decrease overproduction, leading to over 50000000 acres (202,343 km²) to be set aside during times of low commodity prices (1955–1973, 1984–1995), until the practice was eventually ended by the Federal Agriculture Improvement and Reform Act of 1996
.
(1956 Soil Bank Act
), surplus crops as food aid (National School Lunch Act
of 1946, Agricultural Trade Development and Assistance Act of 1954
, the 1964 Food Stamp Act), and much later wetlands and habitat conservation (Food Security Act of 1985
, 1990 Wetlands Reserve Program
, 1996 Wildlife Habitat and Environmental Quality Incentive Programs and 2002 Grassland Reserve Program) and organic food labeling
(Food, Agriculture, Conservation, and Trade Act of 1990
). During this time, agricultural financial support also increased, through raised price supports, export subsidies, increased crop insurance
(1938 Agricultural Adjustment Act), expanding price supports to different crops(Agricultural Risk Protection Act of 2000), offering more guaranteed federal loans, and through the replacement of some price supports with fixed payments (Food and Agricultural Act of 1962 and Federal Agriculture Improvement and Reform Act of 1996).
Beginning with the administration of Secretary of Agriculture Henry A. Wallace
, the United States had generally moved to curb overproduction. However, in the early 1970s, under Secretary of Agriculture Earl Butz
, farmers were encouraged to "get big or get out" and to plant "hedgerow to hedgerow". Over the course of the 20th century, farms have consolidated into larger, more capital-intensive operations and subsidy policy under Butz encouraged these large farms at the expense of small and medium-sized family farms. The percentage of Americans who live on a farm diminished from nearly 25% during the Great Depression to about 2% now, and only 0.1% of the United States population works full-time on a farm. As the agribusiness lobby grows to near $60 million per year, however, the interests of farmers remains well represented. In recent years, farm subsidies have remained high even in times of record farm profits.
tends to grant more power per person to inhabitants of rural states. Also, because the United States House of Representatives
is re-apportioned
only every 10 years by the United States Census
, and population tends to shift from rural to urban areas, farmers are often left with greater proportional power until the re-apportionment is complete.
Also, the majority of agricultural policy research is funded by the USDA. Some economists believe this creates an incentive for government intervention to persist because, among other considerations, the USDA will most likely not fund research criticizing its own activities.
Agricultural policy
Agricultural policy describes a set of laws relating to domestic agriculture and imports of foreign agricultural products. Governments usually implement agricultural policies with the goal of achieving a specific outcome in the domestic agricultural product markets...
of agriculture in the United States
Agriculture in the United States
Agriculture is a major industry in the United States and the country is a net exporter of food. As of the last census of agriculture in 2007, there were 2.2 million farms, covering an area of , an average of per farm.-History:...
and is composed primarily of the periodically-renewed federal U.S. farm bill
U.S. farm bill
In the United States, the farm bill is the primary agricultural and food policy tool of the federal government. The comprehensive omnibus bill is passed every 5 years or so by the United States Congress and deals with both agriculture and all other affairs under the purview of the United States...
s.
History
Over the first 200 years of U.S. agricultural history, until the 1920s, agricultural policy in the United States was dominated by developmental policy — policy directed at developing and supporting family farms and the inputs of the total agricultural sector, such as land, research, and human labor. Developmental policy included such legislation as the Land Act of 1820Land Act of 1820
The Land Act of 1820 is a United States federal law that eliminated the purchase of public land in the United States on credit. It also reduced the minimum size of the tract from 160 to 80 acres . Additionally, the act required a down payment of $100 and reduced the price from $1.65 to $1.25 per...
, the Homestead Act
Homestead Act
A homestead act is one of three United States federal laws that gave an applicant freehold title to an area called a "homestead" – typically 160 acres of undeveloped federal land west of the Mississippi River....
, which granted 160 acre (0.6474976 km²) townships, and the Morrill Act
Morrill Land-Grant Colleges Act
The Morrill Land-Grant Acts are United States statutes that allowed for the creation of land-grant colleges, including the Morrill Act of 1862 and the Morrill Act of 1890 -Passage of original bill:...
of 1862, which initiated the land-grant college system, one in a long series of acts that provided public support for agricultural research and education. In 1933, with many farmers losing money because of the Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
, President Franklin D. Roosevelt
Franklin D. Roosevelt
Franklin Delano Roosevelt , also known by his initials, FDR, was the 32nd President of the United States and a central figure in world events during the mid-20th century, leading the United States during a time of worldwide economic crisis and world war...
signed the Agricultural Adjustment Act
Agricultural Adjustment Act
The Agricultural Adjustment Act was a United States federal law of the New Deal era which restricted agricultural production by paying farmers subsidies not to plant part of their land and to kill off excess livestock...
, which created the Agricultural Adjustment Administration (AAA). The AAA began to regulate agricultural production by destroying crops and artificially reducing supplies. It also offered subsidies to farmers to encourage them to be willing limit their production of crops. The Supreme Court later struck down the AAA as unconstitutional, so in 1938 the Soil Conservation and Domestic Allotment Act was passed, which essentially created a similar organization for distributing farmer subsidies.
Beginning of price supports
At the end of World War IWorld War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
, the destructive effects of the war and the surrender burdens enforced on the Central Powers
Central Powers
The Central Powers were one of the two warring factions in World War I , composed of the German Empire, the Austro-Hungarian Empire, the Ottoman Empire, and the Kingdom of Bulgaria...
of Europe bankrupted much of Europe, closing major export markets in the United States and beginning a series of events that would lead to the development of agricultural price and income support policies. United States price and income support, known otherwise as agricultural subsidy
Agricultural subsidy
An agricultural subsidy is a governmental subsidy paid to farmers and agribusinesses to supplement their income, manage the supply of agricultural commodities, and influence the cost and supply of such commodities...
, grew out of acute farm income and financial crises, which led to widespread political beliefs that the market system was not adequately rewarding farm people for their agricultural commodities.
Beginning with the 1921 Packers and Stockyards Act
Packers and Stockyards Act
The Packers and Stockyards Act of 1921 was enacted following the release in 1919 of the Report of the Federal Trade Commission on the meatpacking industry.-History and passage:...
and 1922 Capper-Volstead Act
Capper-Volstead Act
Capper-Volstead Act , the Co-operative Marketing Associations Act was adopted by the United States Congress on February 18, 1922. It gave “associations” of persons producing agricultural products certain exemptions from antitrust laws...
, which regulated livestock and protected farmer cooperatives against anti-trust suits
Competition law
Competition law, known in the United States as antitrust law, is law that promotes or maintains market competition by regulating anti-competitive conduct by companies....
, United States agricultural policy began to become more and more comprehensive. In reaction to falling grain prices and the widespread economic turmoil of the Dust Bowl
Dust Bowl
The Dust Bowl, or the Dirty Thirties, was a period of severe dust storms causing major ecological and agricultural damage to American and Canadian prairie lands from 1930 to 1936...
and Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
, three bills led the United States into permanent price subsidies for farmers: the 1922 Grain Futures Act
Grain Futures Act
The Grain Futures Act , is a United States federal law enacted September 21, 1922 involving the regulation of trading in certain commodity futures, and causing the establishment of the Grain Futures Administration, a predecessor organization to the Commodity Futures Trading Commission.The bill that...
, the 1929 Agricultural Marketing Act, and finally the 1933 Agricultural Adjustment Act
Agricultural Adjustment Act
The Agricultural Adjustment Act was a United States federal law of the New Deal era which restricted agricultural production by paying farmers subsidies not to plant part of their land and to kill off excess livestock...
- the first comprehensive food policy
Food policy
Food policy is an area of public policy concerning the production, distribution, and consumption of food. The policy consists of setting goals for food production, processing, marketing, availability, access, utilization and consumption, and describes the processes for achieving these goals...
legislation. Out of these bills grew a system of government-controlled agricultural commodity
Commodity
In economics, a commodity is the generic term for any marketable item produced to satisfy wants or needs. Economic commodities comprise goods and services....
prices and government supply control (farmers being paid to leave land unused). Supply control would continue to be used to decrease overproduction, leading to over 50000000 acres (202,343 km²) to be set aside during times of low commodity prices (1955–1973, 1984–1995), until the practice was eventually ended by the Federal Agriculture Improvement and Reform Act of 1996
Federal Agriculture Improvement and Reform Act of 1996
The Federal Agriculture Improvement and Reform Act of 1996 , known informally as the Freedom to Farm Act, the FAIR Act, or the 1996 U.S...
.
Increased comprehensiveness
Over time, a variety of related topics began to be addressed by agricultural policy: soil conservationSoil conservation
Soil conservation is a set of management strategies for prevention of soil being eroded from the Earth’s surface or becoming chemically altered by overuse, acidification, salinization or other chemical soil contamination...
(1956 Soil Bank Act
Soil Bank Act
The Soil Bank Act — Title I of the Agricultural Act of 1956 — created the Acreage Reserve Program to retire land producing basic commodities under an annual agreement from 1956 through 1959, and the Conservation Reserve Program, to retire agricultural land under contracts of 3, 5, or 10 years. ...
), surplus crops as food aid (National School Lunch Act
National School Lunch Act
The Richard B. Russell National School Lunch Act is a United States federal law signed by President Harry S. Truman in 1946. The act created the National School Lunch Program , a program to provide low-cost or free school lunch meals to qualified students through subsidies to schools...
of 1946, Agricultural Trade Development and Assistance Act of 1954
Agricultural Trade Development and Assistance Act of 1954
The Agricultural Trade Development and Assistance Act of 1954 is a United States federal law that established Food for Peace, the primary U.S. overseas food assistance program. The Act was signed into law on July 10, 1954 by President Dwight D...
, the 1964 Food Stamp Act), and much later wetlands and habitat conservation (Food Security Act of 1985
Food Security Act of 1985
The Food Security Act of 1985 , a 5-year omnibus farm bill, allowed lower commodity price and income supports and established a dairy herd buyout program. This 1985 farm bill made changes in a variety of other USDA programs...
, 1990 Wetlands Reserve Program
Wetlands Reserve Program
The Wetlands Reserve Program is a voluntary program offering landowners the opportunity to protect, restore, and enhance wetlands on their property. The USDA Natural Resources Conservation Service administers the program with funding from the Commodity Credit Corporation.- Establishment :The WRP...
, 1996 Wildlife Habitat and Environmental Quality Incentive Programs and 2002 Grassland Reserve Program) and organic food labeling
Organic certification
Organic certification is a certification process for producers of organic food and other organic agricultural products. In general, any business directly involved in food production can be certified, including seed suppliers, farmers, [food] processors, retailers and restaurants.Requirements vary...
(Food, Agriculture, Conservation, and Trade Act of 1990
Food, Agriculture, Conservation, and Trade Act of 1990
The Food, Agriculture, Conservation, and Trade Act of 1990 — P.L. 101-624 was a 5-year omnibus farm bill. This bill, also known as the 1990 farm bill, continued to move agriculture in a market-oriented direction by freezing target prices and allowing more planting flexibility.-Initial...
). During this time, agricultural financial support also increased, through raised price supports, export subsidies, increased crop insurance
Crop insurance
Crop insurance is purchased by agricultural producers, including farmers, ranchers, and others to protect themselves against either the loss of their crops due to natural disasters, such as hail, drought, and floods, or the loss of revenue due to declines in the prices of agricultural commodities...
(1938 Agricultural Adjustment Act), expanding price supports to different crops(Agricultural Risk Protection Act of 2000), offering more guaranteed federal loans, and through the replacement of some price supports with fixed payments (Food and Agricultural Act of 1962 and Federal Agriculture Improvement and Reform Act of 1996).
Beginning with the administration of Secretary of Agriculture Henry A. Wallace
Henry A. Wallace
Henry Agard Wallace was the 33rd Vice President of the United States , the Secretary of Agriculture , and the Secretary of Commerce . In the 1948 presidential election, Wallace was the nominee of the Progressive Party.-Early life:Henry A...
, the United States had generally moved to curb overproduction. However, in the early 1970s, under Secretary of Agriculture Earl Butz
Earl Butz
Earl Lauer "Rusty" Butz was a United States government official who served as Secretary of Agriculture under Presidents Richard Nixon and Gerald Ford.- Background :...
, farmers were encouraged to "get big or get out" and to plant "hedgerow to hedgerow". Over the course of the 20th century, farms have consolidated into larger, more capital-intensive operations and subsidy policy under Butz encouraged these large farms at the expense of small and medium-sized family farms. The percentage of Americans who live on a farm diminished from nearly 25% during the Great Depression to about 2% now, and only 0.1% of the United States population works full-time on a farm. As the agribusiness lobby grows to near $60 million per year, however, the interests of farmers remains well represented. In recent years, farm subsidies have remained high even in times of record farm profits.
Influences
A large reason why agricultural policy has favored farmers over the course of United States history is because farmers tend to have favorable proportional political representation in government. The United States SenateUnited States Senate
The United States Senate is the upper house of the bicameral legislature of the United States, and together with the United States House of Representatives comprises the United States Congress. The composition and powers of the Senate are established in Article One of the U.S. Constitution. Each...
tends to grant more power per person to inhabitants of rural states. Also, because the United States House of Representatives
United States House of Representatives
The United States House of Representatives is one of the two Houses of the United States Congress, the bicameral legislature which also includes the Senate.The composition and powers of the House are established in Article One of the Constitution...
is re-apportioned
United States congressional apportionment
United States congressional apportionment is the process by which seats in the United States House of Representatives are redistributed amongst the 50 states following each constitutionally mandated decennial census. Each state is apportioned a number of seats which approximately corresponds to its...
only every 10 years by the United States Census
United States Census
The United States Census is a decennial census mandated by the United States Constitution. The population is enumerated every 10 years and the results are used to allocate Congressional seats , electoral votes, and government program funding. The United States Census Bureau The United States Census...
, and population tends to shift from rural to urban areas, farmers are often left with greater proportional power until the re-apportionment is complete.
Also, the majority of agricultural policy research is funded by the USDA. Some economists believe this creates an incentive for government intervention to persist because, among other considerations, the USDA will most likely not fund research criticizing its own activities.
See also
- United States farm bill
- Food vs fuelFood vs fuelFood vs. fuel is the dilemma regarding the risk of diverting farmland or crops for biofuels production in detriment of the food supply on a global scale. The "food vs. fuel" or "food or fuel" debate is international in scope, with good and valid arguments on all sides of this issue...
- Agricultural subsidyAgricultural subsidyAn agricultural subsidy is a governmental subsidy paid to farmers and agribusinesses to supplement their income, manage the supply of agricultural commodities, and influence the cost and supply of such commodities...
- History of agriculture in the United StatesHistory of agriculture in the United StatesThe history of agriculture in the United States covers the period from the first settlers to the present day. In Colonial America agriculture fund a livelihood for 90 percent of the population; most towns were shipping points for the export of agricultural products. Most farms were geared toward...