Historical Overview of U.S. Agricultural Policy

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Historical Overview of U.S. Agricultural Policy

• U.S. declared independence from Great Britain
  largely because of repressive ag policies
• Homestead Act (1862)
• Chapter 7 pages 93-96 Knutson, Penn and
  Flinchbaugh

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Historical Overview of U.S. Agricultural Policy
(Cont.)

• Morrill Act (1862)
• Hatch Act (1887)
• Smith-Lever Act (1914)

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Early Policies

• Agriculture was called on to increase production
  for World War I
• Most of the current policies we have today have
  their roots in the Agricultural Adjustment Act of
  1933

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Early Policies (Continued)

• Farm Credit Administration (June 1933)
• Soil Conservation Service (now NRCS) established
  in 1935
• In 1933, federal government began nutrition
  assistance

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Agricultural Adjustment Act

• Signed into law by President Roosevelt
• Gave the Secretary of Ag authority to
• Financed by a processing tax
• Secretary Wallace, The present program for
  readjusting productive acreage to market
  requirements is admittedly but a temporary method
  of dealing with an emergency.

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Other Significant Policies

• Agriculture Act of 1949
• Agricultural Act of 1956 established the Soil
  Bank

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The Golden Years

• Early 1970s
• Bad weather
• Russians
• Negative real interest rate
• Prices high parity
• 73 increase in
• Land values
• Something Bad Had to Happen

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Farm Problem

• For our purposes, we will start with the 1980s
• Basically one of unstable farm prices and,
  therefore, unstable farm income

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