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Family Farms Pulled Us Out of the Great Depression
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It seems to be a widely held myth that World War II was the main agent for moving the United States out of the Great Depression of the 1930s.
Cornell University Professor George F. Warren, an important adviser to Franklin D. Roosevelt on rural development policy, figured out that it is agriculture that leads countries into and out of depressions. The Roosevelt Administration is the only administration that tried to do something about supporting the family farm.
Our recovery started in 1942, the year the Steagall Amendment to the War Stabilization Act mandated farm parity, but the war got the credit. We then had ten years of economic stability until 1952 when the Steagall Amendment was allowed to expire.
In 1952 “export-oriented pricing” replaced the New Deal policy that had put farm prices in balance, or parity, with other prices. That New Deal policy worked effectively with farmer-approved “supply management” that cost far less than today’s subsidies to Agri-business.
Farm parity laws that created a fair price floor for all raw materials was the main agent for moving the United States out of the Great Depression of the 1930s. This support of prices allowed farmers to afford to stay on the farm and rebuild the United States economy literally from the ground up.
Basically, parity is a measuring device that puts the value of raw commodities at a level that equals all the costs, including labor costs and capital costs.
Parity maintained a level for farm-product prices by governmental support and intended to give farmers adequate purchasing power. Parity, official value, or par value, maintained equality between the cost to farmers for their production and the price they received for their products.
Parity laws guaranteed equality of price, rate of exchange, wages, and buying power. Farm parity laws made sure that farm income was keeping up with farm costs.
In 1933 farmers in Nebraska, for example, received almost 43 percent less than the parity level. This is what crushed family farms, drove people off the land and extended the Great Depression.
True democracy requires an agriculture of numerous family farms, owned by farmers rooted in their communities, not by corporate landlords. Agri-business is the work of corporate landlords.
Our exporting of grain at “globally competitive” prices injures Third World farmers and results from our failure to keep commodity prices at parity (balance) with other goods and services. The U.S. farm community has seen a 50% fall in the number of farmers during a 30-year period of “export-oriented” agriculture.
The present path is such a narrow, competitive approach to the world that it misses the possibilities of cooperation and disregards the legitimate need of other nations for their own markets and their own resources. The present path is not the path to peace.
Care International, one of the world’s major aid agencies, recently refused $45,000,000.00 of United States aid money. The money the charity refused is tied to buying the grain from American farmers and shipping it in American carriers.
Which means that much of the aid ‘money’ goes back to the United States.
Some food goes to the needy, but the rest is sold cheaply in markets, undercutting local farmers and giving little incentive for them to grow more. The combination of wastage and the damage done to the local market means the aid does more harm than good.
The current system injures family farmers globally.
Our nearly 50-year-old “export-oriented, globally competitive” farm pricing policy is intended to gain markets by undercutting prices paid to farmers abroad. This amounts to Welfare For Agri-business.
The theme of “growing the economy” through exports ignores the experience of farmers. Non-farmers often confuse agriculture and agri-business.
To contend that agriculture has done well even while the number of farmers has plummeted surely misses essential facts. Those who work in agriculture speak with credibility about how our pricing policy undercuts both our farmers and the farmers of hungry nations.
The United State’s thirst for foreign markets and resources is due to overlooking needs and resources of our own people, leading to growing income dis-parities here. Fair farm parity laws will compensate for this inequity.
We can turn around our current situation and avoid a Greater Depression by raising basic storable commodities back up to 90-100 percent of parity. Supporting family farms can put the United States back on a secure economic footing.
Willie Nelson photograph and art by Monique Claus, Amsterdam, April 21st, 2008.
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November 23rd, 2008 at 1:15 pm
Excellent article Jay,thanks, and thanks to Willie for your site.Sure we need to support family farmers,back in the 30s however almost everyone was one.Today they are a rare endangered species,at the mercy of powerful special interests.I think we will need to support local comunity based agriculture in whatever form works.C.S.A. subscriber suported farms are good,and there must be other models created . peace
November 23rd, 2008 at 8:01 pm
There are many potentially awesome ideas out there and they are all being held up by by the international bankers who run the central banks and the multinational corporations who do their dirty work.
Anything perceived as a possible threat to business as usual is and will be opposed first by ignorant dupes acting as mindless mobs and then in the courts and if that fails by the military and as a last resort by clandestine operatives.
It seems to make no difference at all that business as usual is dependent upon finite resources and significant change must inevitably come sooner or later. Business as usual seems intent to extract the very last bit of useful resources regardless of the consequences.
No one needs to buy into conspiracy theories to grasp these basic themes in history.
Unfortunately, business as usual has “educated” most people to believe that business as usual is the only way to live. Until more people understand the dire position we all are in and who actually put us here, the very people who suffer the most under current conditions actually form the primary barrier to significant meaningful change.
“Now all of political economy from prehistory on to 1932 has been intent upon one thing only—how to take the wealth from the producer, how to take the food from the person who cultivated it and harvested it and give him very little in return. But when you take too much, you can kill the goose that lays the golden egg.” - Charles Walters
Read the rest of it here: Charles Walters
November 25th, 2008 at 9:47 pm
Corporations and bankers have soiled almost every aspect of life on this planet in the name of greed and lust for power. They have been given too much power in our laws and we need to consistently write our representatives to urge them to address these issues.
My grandparents told me of how the idea of Victory Gardens helped so much during the Great Depression. I have a feeling that many people should start trying to grow as much of their own food as possible at this time. Small farmers need to be able to grow their produce freely without hassles from corporate farm interests. We need to get more “back to the basics” and quit expecting everything to be quick and easy if we expect people and other life on this planet to survive.
Love, Hope, Peace, & Christ Is With Us All,
Cal-el
November 26th, 2008 at 2:13 pm
My grandfather who lived from 1890 to 1980 was a farmer. He was an educated man, his mother was from Iceland. He used to talk about how he didn’t like Rosevelt’s idea’s. He encouraged the farmers borrow money to buy big tractors that they couldn’t afford so they could plant more land for export.
November 26th, 2008 at 2:53 pm
FDR certainly gave us a mixed bag and I definitely do not propose that it was all well and good. He was the only President ever to pass a bill guaranteeing farm parity. That is the point I was trying to make.
Family farms need to be able to make more than they spend growing the raw materials that support us all. Driving them off the land with financial programs designed to benefit only international corporate interests destroys the basis of all wealth for the short term gain of a few.
FDR’s ideas, IMHO, were compromises with the devil and that taint poisoned what seemed to be positive on the surface. He protected big money by forestalling wide spread revolt. The programs implemented during his administration bought off critical segments of U.S. society, another version of the divide and conquer strategy.
Just as the current corporate bailout faced widespread resistance but was eventually passed by additions that appealed to the specific interests of individual resisters, FDR returned a few hubcaps so that the bankers could keep the stolen cars.
Lona, do you still work the land? If not, then understanding what drove your family away from farming would shed light upon how we arrived at our current mess.
We all need to understand how this stuff works and most importantly not allow personal interests to permit a compromise that nullifies effective meaningful change as history shows us FDR did.