My grandfather kept his memories close at hand. In his case, this meant a chest freezer in his basement. We have canceled checks from 1931 and income taxes from 1950 (Grandpa paid $689.) We found the sales agreement for the 80 acres where he lived. It’s a good 80, with 78 tillable acres. He paid $55/acre for the farm. An 80 acre tract like that would bring on top of $10,000 an acre today. He should have bought more farms.
We also found his contract with the Department of Agriculture for the Agriculture Adjustment Act (AAA) of 1933. The contract was for the 1934 crop season. Grandpa promised to cut his corn production 30% from 1933 to 1934. In return, he received a payment of just over $1000. The assumed yield in the program was 43 bushels an acre. Farmers received $0.30 a bushel for the corn they didn’t raise, but that was better than the market price at the time, which was as low as $0.13/bushel.
In 1932 and 33, Grandpa raised 33 litters of hogs. He promised to cut that to 17 litters in 1934, for which he received $445, or $5 per hog not raised. The contract estimated a litter at just over 5 hogs.
The first Farm Bill led to hogs being slaughtered and milk being dumped at a time when many Americans were hungry. Six million baby pigs were killed in the year of 1933. Although they were used for human consumption, the pig slaughter caused a firestorm. Here is FDR’s Agriculture Secretary Henry Wallace on the subject:
“Doubtless it is just as inhumane to kill a big hog as a little one, but few people would appreciate that. They contend that every little pig has the right to attain before slaughter the full pigginess of pigness. To hear them talk, you would have thought that pigs are raised for pets. Not would they realize that the slaughter of little pigs might make more tolerable the lives of a good many human beings dependent on hog prices.”
The AAA was arguably the most important part of the New Deal. Just over a quarter of the U.S. population lived on the farm in 1933. A program that increased farm income was vital to the performance of the general economy, because farm families were such a large part of the population. During the first year of the AAA, farm income rose thirty percent.
The bill was written in 4 days and cleared the House almost overnight. The Senate held up passage. The bill finally passed when 600 militant farmers pulled a judge out of a courthouse in LeMars, Iowa, and nearly strangled him. These farmers demonstrated because they didn’t feel the AAA went far enough. After that, the AAA was seen as the moderate plan and was quickly passed by the Senate. From introduction until passage, it took barely two months to pass the first Farm Bill.
It’s useful to keep the history of farm programs in mind as we begin writing a new farm program. Unlike most of the last 90 years, our problem now is not too much grain. In fact, demand is high, grain prices are at record levels, and farmers lucky enough to raise a crop are making a good profit, despite record high input prices. History teaches us that our present situation can change very quickly. A good farm program should serve as a safety net, protecting farmers from catastrophic drops in prices or production. The most dangerous words in the English language are the following: If present trends continue. Because of course they won’t. We won’t always have high prices and grain won’t always be in short supply.
As Congress begins work on a new farm bill, there are a couple of ideas that are problematic at best. First, we should not separate nutrition programs from traditional farm programs. There are two kinds of people who back this idea. The disingenuous and the deluded. The first group is very well aware that political support from urban legislators is the only reason that farm bills pass, because urban legislators are voting for the nutrition programs and are willing to accept farm programs as the cost. Arithmetic matters, and a stand alone farm bill would be a non starter. The disingenuous don’t care, because they would like to see farm bills go away.
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The second group is convinced that there is widespread support for farmers all across the fruited plain, and the farm bill would be even more popular if it wasn’t tied to helping hungry people. I admire their faith in and love for our industry, but paint me skeptical when it comes to the likely result of any argument that says there is widespread support for sending billions of dollars to middle class farmers in places where very few voters live.
I often hear farmers quote the statistics showing that a great majority of the spending for the farm bill doesn’t go to farmers, but rather nutrition programs. Believe me, we shouldn’t be resentful about that fact, but grateful. It is a feature of the farm bill, not a bug. We farmers may see farm subsidies as necessary and just, but we may be suffering from a bit of confirmation bias. And entitlement, much as it pains me to say.
The second idea is based on a very real worry about input prices. I think all of us in agriculture are rightfully worried that farm prices will drop while fertilizer and fuel prices stay high. So, the idea of basing farm programs on farmers’ margins is once again in vogue. That can’t be done without computing a nationwide cost of production for each and every commodity covered by farm programs. That is….problematic. Every farmer faces different costs, depending on how he is capitalized, the productivity of his land and animals, and his management ability. The USDA presumably has very big computers, but one doesn’t have to be a disciple of Hayek to realize that there is a real information problem here that can’t be solved. It is passing strange that none of us trust the USDA’s ability to count bushels and bales, but are willing to take their word for a much more complex computation.
Finally, the agriculture committees have long prided themselves on being non-partisan. In this partisan age, we can’t have nice things, so both parties are working overtime to dabble in farm policy without the input of the committees of jurisdiction. Whether it be CCC payments or climate legislation, much of the policy that farmers must deal with is being made without the input of those in Congress who actually understand farming. This is a terrible trend, and the biggest problem faced by the authors of the 2023 Farm Bill.
We have improved farm bills over the last century of tinkering with the economy of corn and cows. One can’t imagine a farm bill that required the slaughter of hogs or the Payment in Kind program of the 1980s. We should build on that success this time around by remembering the lessons of the past.
Blake Hurst is a farmer and greenhouse grower in Northwest Missouri.
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