CHAPTER SIX
Early National Agricultural Policy
Kristin Jones, Polina Katkovskaya ______________________________________________________________________________
ABSTRACT
This chapter focuses on the legislation passed concerning agricultural policy. This policy extended not only to education and research but also to land grants, farm credit and parity.
The purpose of the establishment of educational institutions involved in agricultural research and development was to increase the efficiency of agricultural practice and quality of the product, while the land grants, farm credit and parity were designed to incorporate the needs of those working the farms and the new agricultural improvements.
The purpose of this chapter is to clarify how early national agricultural policy reflected and catered to the needs of the country at the time. The laws passed clearly evince the scientific, academic, and economic situations taking place in the United States in the period from 1860-1940. This period is historically one in which many changes took place in the farming community, and the legislations clearly illustrate this fact.
INTRODUCTION
The period from 1860-1940 encompassed numerous changes within American society, government, and economy. To accommodate these changes, the government passed several laws ensuring that the needs of society, and in the case of agricultural legislation, the needs of the farmer were met. These government efforts can be seen in many aspects of society beginning with the establishment of higher educational institutions which focus on agricultural education, and extending to laws such as parity which focus on ensuring that the farmers earn enough money for the crops which they produce, even in times of economic hardship.
Extremely large sums of money were spent between 1860 and 1940 in America to promote research and education in the agricultural field. The total annual appropriation for Agricultural Education and Research was approximately $18,231,942.51. The breakdown of how these funds were distributed can be seen in figure 1.(Richardson 1918) Such an unprecedented distribution of both Federal and state funds for education caused great concern in America and in my research. As a result, an additional focus of the research in this chapter serves to investigate the extent to which America’s vast financial investment in Agricultural education and research was financially rewarding. Based on data collected from educational institutions of the time, not only was it rewarding and beneficial for the economy, but also for the quality of life of Americans during and following this time period. The policies which the government instituted towards education in this era were beneficial to agricultural advancement in terms of technology and crop production. The financial investment made by the Federal government and the states allowed for agricultural experiments that lead to the discovery of new techniques that increased the efficiency with which farming is performed in America. Simultaneously, a wider range of American citizens were granted access to higher education; thus, increasing the quality of life of Americans as a whole.
In terms of the financial needs of the farmers outside of education, at the start of the 1860’s, one finds that the government was especially attentive in a time as turbulent as the reconstruction era, when the old concepts of farming were completely overthrown, most noticeably in the south. With the coming of the Progressive and Depression eras, new laws concerned not as much the ownership of land, but the welfare of the farmers, and the value of their crops. The concept of parity did not change drastically since its establishment in the 1920’s, but it grew in importance during the Depression Era and was established as an official legal concept at that time.
The establishment and evolution of farm credit, as well as the establishment of parity, were widely a product of national events that were happening at the time of their establishment. The passage of certain laws was clearly a reflection of the needs of the time period during which they were passed.
Overall, the legislation passed during this time period, both concerning the education of future farmers and agricultural workers, as well as that which directly impacted the crops which farmers produced, the production process, and the buyers of these products reflected the needs of the people and of the society. These needs were in large part due to the economic turmoil taking place at the time.
LITERATURE REVIEW
On July 2, 1862 President Abraham Lincoln signed the College Land Grant Act also known as the Morrill Act. This act permitted the states to select 30,000 acres of public land for each member of Congress, where they would provide colleges for, but not limited to, the study of agricultural sciences. These colleges were called Land- Grant Colleges because they were founded on land granted by the Federal Government.(Nevins 1962) The aim of the Morrill Act was summarized by Dr. Davenport, one of Americas leading educationists: “ The fundamental purpose of agricultural education is the development of agriculture as a productive occupation, and of the agricultural people as an important part of the social and political fabric.”(Richardson 1918).
AEV Richardson justifies the Land-Grant Act by summarizing the attitudes of Americans towards financial support of education. The money put into agricultural education in America was thought to be well worth it, as the reward would ideally be much greater than the initial investment. However, what exactly falls under the heading of agricultural education? It is defined as “all the activities undertaken for the promotion of sound and profitable agriculture in a country. The activities may be classified functionally under four distinct heads – (1) Instructional work: all formal teaching of agricultural principles and practice to students from the primary school to the college or university, (2) investigational or research work: the experimental and research work undertaken for the purpose of discovering new facts and principles pertaining to agriculture, (3) extension or publicity work : activities concerned wit the dissemination of information to those who are unable to take advantage of the formal teaching of the schools and colleges, and (4) regulatory, inspectional, or control work: functions for the purpose of protecting or regulating certain industries.”(Richardson 1918) These activities were supported under the Morrill Act of 1862.
Legislation in support of agricultural education and research did not stop at the Morrill Act; it continued to increase funding for land-grant colleges and encourage more extensive research. In 1887, the Hatch Act was passed, and it established agricultural experiment stations in each state that were responsible for researching, investigating, and experimenting with the manufacturing process to improve rural life.(Conkin 2008) This act added $15,000 per year to each state college’s budget for the maintenance of experiment stations and experiments conducted within them.(Mississippi Agricultural and Forestry Experiment Station 1887) The Adams Act of 1906 extended the benefits of the Hatch Act to $30,000 per year on the premise that funds be used for original research specifically. This standard encouraged more ground-breaking research.(Rosenberg 1964) On March 4, 1907, The Nelson Amendment allowed for Federal funds to be used for the training of teachers of agriculture, and in 1908 an additional $25,000 was appropriated for this training.(Herren 1996) Again in 1914, legislation increased funding for agriculture, but in vocational and secondary schools. This was called the Smith-Lever Act, and it set up two funds. One fund paid teachers and their supervisors in vocational education, and another funded instruction in trade, home economics, and industrial subjects. Each of these amounted to $500,000 in1918 and by 1926 they increased to $3,000,000.(Conkin 2008) As can be clearly seen by the efforts of the Federal Government to ascertain that colleges and experiment stations had the financial means to accomplish their goals, the Federal Government believed that the results of these colleges would be extremely beneficial to America. Now that the nature and purpose of Land-Grant Colleges is clear, an exploration of the extent to which they were rewarding to Federal investors and to America is possible.
The concepts of farm credit and parity might as well be in a foreign language to most, but in theory, their meaning is not as complicated as one may assume. Farm credit, is the same form of credit one uses to purchase goods on their credit card, or to take a mortgage on their house, except it is used to purchase farm land and all items that a farmer would need to ensure a harvest.
Parity is the method by which the government determines the price of goods based on a base period(Teigen 1987). For example, the buying power of a bushel of wheat should remain constant, which means its price at a market may increase or decrease depending on inflation and other economic factors, but its worth remains the same. By selling a product, the farmer must be able to make the same value of profit taking into account the rates of inflation.
Inflation is “an upward movement in the average level of prices”(Robin Bade 2006). An increase in inflation is representative of the worth of money being less, meaning that the economy of the federal organization producing the money is growing weaker. Therefore, in times of economic crisis, inflation tends to go up, as do prices.
It would appear that such laws and regulations, as farm laws and parity laws have remained stable over time, and that these concepts have remained unchanged since the time of the Jefferson-Hamilton debates about the fate of the American nation as an agricultural vs. and industrial society, but in truth, these laws change with the times.
RESULTS AND FINDINGS
Through research it was found that the legislation regarding the financial contribution towards Land-Grant Colleges and the research that they performed were worth the money invested, and that further legislation passed concerning agricultural policy benefitted the society, both the producers (the farmers) and the consumers (the non-farmers who purchased farm products). The images and charts in this section reflect the findings of the government’s actions towards the different aspects of agricultural policy- both educational and economic.
Educational Policies
Iowa State College is a prime example of just one of the 53 institutions named agricultural colleges in 1862. The Iowa State experiment station made great advancements in corn and livestock husbandry, as these were the two most important commodities of the state. Iowa State’s Experiment Station discovered that self-fed hogs sell at a profit of one dollar higher than hand-fed hogs. Iowa marketed 10,000,000 hogs annually, resulting in a gain of at least ten million dollars a year. This self-fed feeding style was also proven to save labor and economize feeding, which also saved farmers money and energy. This practice spread to every state of the Union(Richardson 1918). In addition to discoveries concerning livestock, Iowa University contributed to the field of farming technology with the invention of a new machine which scratched the hard shell of the clover seed so that it could absorb moisture better. This machine was called the Ames scarifying machine, and it decreased the average percentage of unscarified seed from 20 lbs per acre to a mere 5 lbs per acre. This machine increased the process of germination and, consequently, more clover seed was grown which indubitably lead to greater profit.
Land-Grant Colleges provided both male and female students with an access to education. Iowa State College, in particular, reflects this in the variety of courses that were offered. “Besides the regular four years’ courses in agriculture, the college gives non-collegiate or secondary courses, as well as graduate courses in agriculture. Some 300 students take the three-year non-collegiate, or secondary course, which is given for the benefit of those who cannot reach the standard necessary for admission to the regular college course. The Secondary course may be regarded as a Model Agricultural High School course. The students have the benefit of the very complete equipment provided for the four-year course. A separate staff is provided for the secondary courses.”(Richardson 1918) Iowa State also offered two-year courses and short courses. While the two-year courses were similar in purpose to the three-year courses, the short courses, which lasted from six to twelve weeks, were aimed at educating “farmers and young men who desire[d] to increase their knowledge of agricultural science and practice” (Richardson 1918).
Agricultural Legislature
| Act | Year | Definition |
| Homestead Act | 1862 | Any adult citizen, or intended citizen, who had never borne arms against the U.S. government, could claim 160 acres of surveyed government land. |
| Federal Farm Loan Act | 1916 | Established 12 Federal Land Banks (FLBs) in 12 districts across the country, along with hundreds of National Farm Loan Associations that were agents for the land banks, to provide long-term credit to farmers to develop and expand farms(FCA) (www.FCA.gov). |
| Agricultural Credits Act | 1923 | created 12 Federal Intermediate Credit Banks (FICBs), one in each of the 12 districts established under the 1916 Act (www.FCA.gov).(FCA) |
| Emergency Farm Mortgage Act | 1933 | Extended repayment schedules and offered emergency financing (www.FCA.gov) |
| Farm Credit Act | 1933 | Established the Farm Credit System (FCS) as a group of cooperative lending institutions to provide short-, intermediate-, and long-term loans for agricultural purposes (www.FCA.gov) |
| Agricultural Adjustment Act | 1933 | Introduced the price support programs, including production adjustments, and incorporated the Commodity Credit Corporation under the laws of the State of Delaware. This law also put the concept of parity into written law (Ganzel 2003) |
| Agricultural Adjustment Act | 1938 | The first to make price supports mandatory for corn, cotton, and wheat to help maintain a sufficient supply in low production periods along with marketing quotas to keep supply in line with market demand. It also established permissive supports for butter, dates, figs, hops, turpentine, rosin, pecans, prunes, raisins, barley, rye, grain sorghum, wool, winter cover crop seeds, mohair, peanuts, and tobacco for the 1938 40 period. The 1938 Act is considered part of permanent legislation (1938). |
Figure 2.
This table illustrates the laws passed, the year in which they were passed and how they affected the United States. As one can see, most of the laws were passed directly during or after a large crisis, for example the Homestead Act, which was passed upon the conclusion of the Civil War, or the Acts passed in response to the Great Depression (1928-1940).
Figure 3.
Source: http://www.livinghistoryfarm.org/farminginthe30s/money_24.html (Ganzel 2003)
This graph demonstrates the concept of parity. The lighter areas represent the amount of money the farmers made by selling their crops, while the darker sections represent the amount of money the government subsidized, or paid the farmers back in the case that they were unable to make as much as the base amount, which is represented by the first column marked by the year 1909-1914. Although it is clear that the government could not completely subsidize the full amount to reach the base parity level (as represented by the horizontal line entitled 1909-1914 Parity Level), it can be noted that the government did subsidize the farmers somewhat, and that these subsidies increased as the economy of the United States stabilized.
DISCUSSION
As can be seen from the impact and achievements of Iowa State University, the single discovery of a more efficient feeding style at one of 53 stations resulted in a profit of over ten million dollars. From one accomplishment it becomes immediately evident that initial financial investments were returned exponentially, and that they proved beneficial to American agriculture. Iowa’s experiment station also determined that pure bread cows produced 75% more milk fat and 50% more butter fat than scrub cows. This distinction between quality of livestock helped to increase the value of certain livestock at markets. At the Iowa Experiment Station, two oats named Iowa 103 and Iowa 105 were distributed to local farmers, and these increased production by 5 bushels per acre.
By influencing not only students, but also farmers and children already active in agriculture, the benefits of Iowa State’s research was far-reaching. This spread of information made advancements in the field of agriculture known to a large number of people, and it increased the efficiency with which farming was performed.
Women were also beneficiaries of the Land-Grant Colleges. Iowa State College of Agriculture offered a Home Economics Course with 987 female attendees, 675 of whom were taking the regular four years’ course.(Richardson 1918) Since 95% of women became homemakers at some point in their careers during this time, typical four-year studies for women at the agricultural college included the following: General Subjects – English, History, Civics, and Physical Culture; Science Subjects – Chemistry, Zoology, Physiology, and Economics; and Technical Subjects – Study of foods, hygiene, nutrition and dietetics, household management, and textiles. While these might not be considered particularly egalitarian courses by today’s standards, they were very practical. Women were taught how to manage their homes, care for ailments and physical wounds, to manage money since they dealt with most of the finances of the home, and to speak publicly. The time of study was equally distributed between general, science, and technical subjects; so, the traditional areas of English literature, History, Civics, and Culture were not undermined in female education.(Richardson 1918) The access to a general education, somewhat similar to what males were able to learn, promoted the idea of Democracy in education. The quality of life for women was enriched as a result of the Land-Grant Colleges, and with formally trained women, family life was also improved in America.
The access to formal education that has been previously discussed did require some financial contribution from students. Although this might lead one to doubt the true ease with which higher education could be accessed, the vocational education and spread of information to local, uneducated farmers does address this concern. While it did not become magically possible for anyone who desired to attend college to do so, it was possible for everyone to benefit from the discoveries of these colleges. The effects of the Land-Grant Colleges and experiment stations were felt nationwide. Additionally, the degree to which each experiment station was productive differed. Every experiment station did not make agricultural discoveries that earned millions of dollars; however, all of the experiment stations shared their findings, which meant that every experiment station was privy to the discoveries of its sister stations. Consequently, even those stations that were not as productive as others did reap the benefits of agricultural advances made throughout the country, and they did share this information with agriculturalists of the state.
The establishment of parity laws and the evolution of farm credit was based largely on domestic affairs which impacted the American economy. The most influential, however, was the state of the American economy.
The first two events that revolutionized American agricultural policy were the Homestead Act of 1862, the end of the Civil War, which brought with it the abolition of slavery, the policy commonly known as “40 Acres and a Mule” (Sherman 1865) , and a new system of farming in the South called sharecropping. These events were later followed by a depression in 1870 which resulted in the new movement termed the “Granger” and “Free Silver” movements which called for a government break down of farming monopolies and other industrial monopolies which affected farming such as the railroad(University of Northern Iowa 1875), and increase in the production of silver coins for farmers to use to pay off farm loans, respectively. Policies changed again with the closing of the frontier in 1890, as Fredrick Jackson Turner describes in his thesis, The Significance of the Frontier in American History, written in 1893.
At the turn of the 20th century the Grange Movement came to a halt and new policies were instituted by Theodore Roosevelt which focused on problems facings rural communities, which made up the majority of the American households at the times. The credit system evolved to include more cooperatives, and a cooperative credit system for farmers (FCA).
Several acts were enacted during and after WWI. These acts included the Federal Farm Loan Act of 1916 and Agricultural Credit Act of 1923. While the Farm Loan Act of 1916 was based on the German system of agricultural credit, the Agricultural Credit Act was a result of competition with Europe which resulted in the requirement for American farmers to have provisions for short-term farm credit (FCA).
Economic fluctuations, such as the crash of the stock market in 1929, which lead to the onset of the Great Depression, also had an affect on the way that farm credit was distributed and the development of new government institutions which dealt with its distribution. This institution was in fact the FCA , the Farm Credit Administration, which remained independent until it was incorporated into the USDA in 1939 (FCA).
The Great Depression was also the time period during which the concept of parity was officially established. In the Agricultural Adjustment Act of 1933, parity was officially defines as an agricultural program which included both a parity price concept and a parity income measure. The concept of parity is supposed to make sure that the price of a farm product maintains the same purchasing power as it did at the base period, which at the time of the passing of the act was the period between 1910 and 1914, prior to the onset of the first world war, (Teigen 1987), since prices fell after the war. The main idea behind officially outlining parity was to avoid further crises resulting from the fall of crop prices both after WWI and the Great Depression.
The establishment and evolution of farm credit, as well as the establishment of parity, were widely a product of national and international events that were happening at the time. The passage of certain laws was clearly a reflection of the needs of the time period during which they were passed.
As one can see from the graph, the Agricultural Adjustment Act of 1933 established the base line for parity to be the price of wheat from 1909-1914. This means that farmers producing wheat after this period– the graph shows 1933-1941—had to receive the same revenue worth as during the 1909-1914 period. Because of the economic situation however, the government (shown in the darker color) had to subsidize the farmers. In fact, the government had to pay the farmers to produce smaller harvests since they were over producing. The overproduction was not only bad for the land, but also drove down the prices of the fruits and vegetable harvested for the year(Rucker 1990). Basically, the government paid the farmers to produce less.
However, according to James H. Shideler, the idea of instilling an actual parity price formula as law came about during the economic depression of the early 1920’s(Shideler 1953). Many of the farmers argued that they are entitles to fair and equal pricing that should be uniform throughout the country. These protests and demonstrations were fueled by the economic issues prevalent at the time. However, such demonstrations caught the attention of the government, and therefore, in the 1930’s action was taken to officially establish the laws on parity in legislature.
CONCLUSION
From the period of 1860-1940 government played a major role in determining how to respond to the changes within the country. To improve the agricultural process, and to make advancements in the agricultural field, the government found it necessary to create education state institutions, and to ensure that the farmers were relieved somewhat from financial crises, since those such as the Great Depression impacted the farmers the most, the government passed legislations protecting the farmers. Although the needs of the farmers were not always met, and not all farmers received a degree in higher education, the progressive nature of the government is clearly evident from the establishment of these institutions and from the passage of the laws discussed in the paper.
One important aspect to consider is that these laws, and these institutions did not simply disappear after this era. In fact, this time period held the foundation for later agricultural legislature, for laws concerning food itself, for example safety and the rights of food workers, and some of the colleges are still in existence today. Even the very prestigious such as Cornell University have majors in the agricultural sciences. It also must be kept in mind that as America grows as a nation, the subject of food production will become more and more central since the human race cannot survive without food. Soon, it will become evident what changes the government needs to make to ensure the standard of the quality of life here in the United States.
WORKS CITED
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