Agricultural Policy of the United States

Frontmatter

Chapter 1. Introduction

Abstract

In the United States, the relationship between the agricultural sector and the federal government is complex. This chapter helps the reader to understand the complexity, its origin, and its evolution over time. The chapter explores four elements of this complexity, the values, beliefs, and myths that help shape the bond between citizens and agriculture, the rapid technological change that has reshaped agriculture over the last 250 years, the basic nature of agricultural markets, and the changing relationship between agriculture and the general population as incomes and educational levels increased.

Stephanie A. Mercier, Steve A. Halbrook

Chapter 2. Native American and Colonial Agriculture

Abstract

This chapter describes the state of Native American agriculture when European settlers arrived in the New World in the early seventeenth century, and how the two cultures interacted in the first few decades. The settlers’ crop and livestock choices depended on whether they sought help from their indigenous neighbors, and on the climate and growing conditions where they farmed. Farmers’ ability to produce and trade surplus products domestically and other nations depended on their access to waterborne transportation, as the poor quality of roads prior to the American Revolution largely precluded overland shipment of goods. The Navigation Acts passed by the Parliament limited their ability to trade with countries other than Great Britain, and these restrictions were one of the factors that led to the Revolution.

Stephanie A. Mercier, Steve A. Halbrook

Chapter 3. Land Distribution and the Expansion of the American Landscape

Abstract

Access to land and land ownership became a critical element in the success of the early European settlements of North America. This chapter explores Native American concepts of land ownership, and the feudal origins of European ideas of land ownership and how that affected the development of the US land tenure system in the colonial era. It also discusses the post-revolutionary policy decisions that shaped the subsequent pattern of settlement and land ownership, and the territorial expansion of the United States across North America.

Stephanie A. Mercier, Steve A. Halbrook

Chapter 4. Opening Up the American West

Abstract

At the start of the Civil War, 84 percent of Americans still lived east of the Mississippi River. There were two seminal pieces of agricultural legislation signed by President Abraham Lincoln in a six-week period in 1862 which helped to open up the western half of the country. The Homestead Act provided the opportunity for any American over the age of 21 to obtain land for farming in the Midwest or West. The Pacific Railroad Act created the financial mechanisms for the Central Pacific and Union Pacific Railroads to build railroad lines which joined the East with the West seven years later.

Stephanie A. Mercier, Steve A. Halbrook

Chapter 5. Water Access and Immigration Issues

Abstract

Land, water, and human labor are necessary for agricultural production. This chapter explores the legal constructs we use to allocate water and the ways the United States has encouraged or limited immigration over time, impacting the supply of labor for agriculture. The right to use water can depend on the type of water (surface or ground), the relative abundance of water and the rights of society (government) to regulate water. The immigration policies of the colonial and post-revolutionary eras helped develop agriculture across the continent. Today, policymakers struggle to find balance in this area.

Stephanie A. Mercier, Steve A. Halbrook

Chapter 6. Public Sector Institutions, Education, and Innovation

Abstract

For the first 150 years of the Republic, the government’s primary role in agriculture was to build institutions for education and innovation. Starting with the Ordinance of 1785, the federal government used land and other resources to promote public education of the populace and innovation in agriculture. The Morrill, Hatch, Smith-Lever, and Smith-Hughes Acts would follow. The original mission of USDA was experimentation and innovation to improve agricultural production. Intellectual property rights through the awarding of patents spurred innovations from the cotton gin to mechanical power and GMO plant varieties that revolutionized agriculture.

Stephanie A. Mercier, Steve A. Halbrook

Chapter 7. Infrastructure Investments

Abstract

Infrastructure gets ignored. We simply expect it to be there. For agriculture, we associate infrastructure with transportation, moving goods to the market. Our founding fathers viewed infrastructure as a private good. This chapter traces the evolution of government support for roads, canals, railroads, and modern highways to improve transportation. It also explores the development of rural electrification, telephone/interment service, and rural water systems. These government investments have increased agricultural productivity, opened new markets, facilitated new enterprises, and improved the quality of life in rural America.

Stephanie A. Mercier, Steve A. Halbrook

Chapter 8. Golden Age of US Agriculture

Abstract

The first two decades of the twentieth century are often called the Golden Age of US agriculture. The frontier was settled. The population and demand for food were increasing. The agricultural productivity revolution was still on the horizon. Times were good on the farm. This chapter traces the principal policy developments of the era from Theodore Roosevelt’s Country Life Commission and the rise of the conservation movement to World War I. The end of the war reduced demand and agricultural prices dropped. The final section of this chapter explores the initial efforts to formulate a government policy to raise farm income.

Stephanie A. Mercier, Steve A. Halbrook

Chapter 9. Food Safety Laws

Abstract

The vivid descriptions of the unsanitary practices used in Chicago meatpacking plants in the 1906 best-selling novel The Jungle helped spur Congressional action to provide federal oversight over such facilities for the first time, an effort that President Theodore Roosevelt helped to mobilize. On the same day in that year that the president signed the Meat Inspection Act, he also signed the Pure Food Act that required federal oversight of food processing to prevent the adulteration of food products with toxic or unwholesome ingredients. The origins of federal oversight over grain merchandising, reduction of the risk of acts of agro-terrorism, and the federal regulatory framework for agricultural biotechnology are also discussed.

Stephanie A. Mercier, Steve A. Halbrook

Chapter 10. Bringing Equity to Agricultural Input and Output Markets

Abstract

Farmers are price takers and there is a natural distrust of merchants and middlemen in the agricultural community. Farmers look to the government to level the economic playing field. This chapter examines the development of market regulation starting with the Granger laws and regulation of railroads through the Sherman and Clayton antitrust acts and the Federal Trade Commission Act. It also reviews the direct regulation of agricultural markets by the Packers and Stockyards Act and the Perishable Agricultural Commodities Act. The Capper-Volstead Act and the Agricultural Marketing Agreement Act of 1937 gave farmers the power to act collectively.

Stephanie A. Mercier, Steve A. Halbrook

Chapter 11. Coping with Twin Shocks

Abstract

This chapter discusses how American farmers were struck with twin massive shocks over the course of a few years. The first shock was the Great Depression, which started with a catastrophic stock market crash in October 1929, eventually undermining overall demand for agricultural products. The second was the Dust Bowl, a prolonged event which began in 1931, consisting of an eight-year drought combined with an endless series of wind storms which picked up topsoil from several states in the Great Plains and scattered it for thousands of miles. The dominant cultivation practices used in the region, breaking up the perennial grasses and plowing deeply into the ground to plant crops, magnified the impacts of the adverse weather.

Stephanie A. Mercier, Steve A. Halbrook

Chapter 12. Early Federal Policy Responses

Abstract

In this chapter, we discuss the lack of an effective response to farmers’ travails by the Hoover administration, contrasted with the whirlwind of legislative activity that addressed the agricultural sector in the “first Hundred Days” of the administration of Franklin D. Roosevelt, who took office in March of 1933. These actions included the Agricultural Adjustment Act, which is now viewed as the first in a long series of farm bills providing a financial safety net for US farmers, as well as the Soil Conservation Act, the Rural Electrification Act, and legislation establishing the Civilian Conservation Corps. A key court case, United States v. Butler, forced President Roosevelt to alter his legislative course in 1935.

Stephanie A. Mercier, Steve A. Halbrook

Chapter 13. US Policy During and After World War II

Abstract

World War II was a pivotal time for US agriculture. Production and farm income rose. Congress did not want a replay of the market crash that followed World War I. This chapter starts with a review of the Commodity Credit Corporation (CCC), the financing mechanism for New Deal farm programs and ends with a discussion of post war policies to stabilize agricultural markets, including the so-called permanent farm bill of 1949, the Marshall Plan, and the Food for Peace program. Wartime efforts to control prices and ration strategic commodities, and supplement the agricultural labor pool are also discussed.

Stephanie A. Mercier, Steve A. Halbrook

Chapter 14. Supply Control While Expanding Demand

Abstract

This chapter covers US agricultural policy between 1956 and 1977, a period characterized by significant stock-building of key commodities such as wheat and corn. The Soil Bank program was established in 1956 to deal with this matter, which encouraged farmers to retire cropland that was considered to be highly erodible. A vigorous debate persisted over much of the period as to whether to impose mandatory controls on farmers’ planted acres of program crops, or rely solely on voluntary incentives to reduce supply. Massive purchases of US-produced grain and oilseed by the Soviet Union in 1972, totaling 19 million tonnes, reduced surplus stocks but raised questions about the US official role in facilitating the transactions.

Stephanie A. Mercier, Steve A. Halbrook

Chapter 15. Government Stockholding

Abstract

From President Jimmy Carter’s grain embargo to punish the Soviet Union for its invasion of Afghanistan, to emergency drought relief in 1989, policymakers of this era were constantly reacting to outside forces that impacted agricultural markets. Dairy surpluses and growing stocks of grains prompted a series of policy corrections to balance markets. The agricultural financial crisis of the mid-1980s required several legislative responses to stabilize the Farm Credit system. A widespread drought starting in 1988 resulted in two emergency Congressional reactions. This chapter reviews all of these developments and the beginning of conservation compliance and liberalized trade.

Stephanie A. Mercier, Steve A. Halbrook

Chapter 16. The New Global Environment: 1996–2004

Abstract

During the period of 1996–2004 discussed in this chapter, agricultural trade policy began to play a more significant role in creating overseas demand for US products. The Federal Agriculture Improvement and Reform (FAIR) Act, enacted in 1996, dismantled much of the existing domestic farm safety net, eliminating acreage reduction requirements, target prices, deficiency payments, and the Farmer Owned Reserve, replaced with fixed direct payments not linked to current production. A portion of farm payments were relinked to production in the 2002 farm bill after the Asian financial crisis of the late 1990s weakened export demand and depressed commodity prices.

Stephanie A. Mercier, Steve A. Halbrook

Chapter 17. Most Recent Farm Bills: 2008–2018

Abstract

This chapter covers the policy debate and key provisions of the three most recent farm bills—the Food, Conservation, and Energy Act of 2008, the Agriculture Act of 2014, and the Agricultural Improvement Act of 2018. Efforts by some members of Congress to significantly reduce eligibility for Supplemental Nutrition Assistance Program (SNAP) benefits among targeted populations slowed the process for both the 2014 and 2018 farm bills. Due to ballooning federal budget deficits over the period, changes made to the farm safety net in the commodities title were relatively modest in the three farm bills, although farmers did receive more choices in how they wanted their program crops to be protected.

Stephanie A. Mercier, Steve A. Halbrook

Chapter 18. Policy Spotlight: Agricultural Trade Policy

Abstract

In this chapter, we discuss the fact that for the first 140 years of the United States, exports from this country, primarily to Europe, were dominated by agricultural products. Nonetheless, the US government did not pursue expansion of US agricultural exports as an explicit policy objective until 1930, starting with the creation of the Foreign Agricultural Service, charged with providing specific staff in key US embassies to cover agricultural issues. The current toolbox of US agricultural trade policy consists of trade promotion and export credit programs, working to dismantle sanitary and/or technical barriers to US agricultural products in foreign markets, and systematically negotiating reductions in tariffs on agricultural imports and other trade barriers under free trade agreements.

Stephanie A. Mercier, Steve A. Halbrook

Chapter 19. Policy Spotlight: Conservation and Environmental Policy

Abstract

This chapter traces US conservation/environmental policy from the mid-nineteenth-century romantics to the present day fight over the reach of the Clean Water Act, from John Muir to Gifford Pinchot and Hugh Hammond Bennett and on to Rachael Carson and the modern environmental movement. The conservation mission at USDA is detailed. Modern land retirement programs, conservation compliance, working lands programs, and farmland preservation programs are discussed in detail. Modern environmental legislation is outlined with an emphasis on current issues before Congress and the courts.

Stephanie A. Mercier, Steve A. Halbrook

Chapter 20. Policy Spotlight: Commodity Promotion Programs

Abstract

Farmers typically focus on the supply side of the market—producing more. They generally assume that demand will exist. However, farmers do become concerned about demand when there is some sort of threat in the market place or they are producing a product new to the public. This chapter traces the development of commodity promotion programs from the early efforts of the dairy and fruit and vegetable industries to the proliferation of promotion programs over the last 30 years. The chapter also reviews legal challenges to these programs and ongoing policy debates.

Stephanie A. Mercier, Steve A. Halbrook

Chapter 21. Policy Spotlight: The Federal Crop Insurance Program

Abstract

This chapter describes the development of the federal crop insurance program, starting as an adjunct program to the parity price supports established in the first few farm bills in the 1930s, initially available only to wheat and cotton farmers in a few regions. It became a nationwide program in the 1980s, and continued to expand its reach in the 1990s and 2000s as the federal government picked up an increasing share of farmers’ premium costs. Today, the annual cost of the crop insurance program, which covered 380 million acres of cropland and pasture in 2019, typically exceeds the cost of all other farm safety net programs combined.

Stephanie A. Mercier, Steve A. Halbrook

Chapter 22. Policy Spotlight: Federal Biofuels Policy

Abstract

Humans have been making ethanol from grains for thousands of years. This chapter traces the evolution of US policy on ethanol/biofuels from the early republic to today, reviews the current state of the industry, and concludes with a brief discussion of biodiesel and other biofuels derived from feedstocks other than corn. Emphasis is placed on the policy developments of the mid-1970s following the spike in crude oil prices through the development of the renewable fuels standard (RFS) in 2005 and 2007 and the impact of the RFS on current policy discussion.

Stephanie A. Mercier, Steve A. Halbrook

Chapter 23. Policy Spotlight: Domestic Nutrition Programs

Abstract

As with so many other US agricultural policies, the first domestic nutrition assistance programs were born as part of the New Deal effort to combat the adverse effects of the Great Depression and Dust Bowl on the US farm sector, with surplus foods purchased and distributed to hungry people through a variety of outlets. The National School Lunch program to help feed low-income children was established in 1946, and the Food Stamp Program—now the Supplemental Nutrition Assistance Program, or SNAP—was established in 1964. Recent legislative efforts have sought to improve the nutritional content of food consumed through these programs.

Stephanie A. Mercier, Steve A. Halbrook

Chapter 24. Conclusions

Abstract

In the conclusions, we discuss some of the factors that have contributed to the prolonging of debate over the last several farm bills, as four of the five most recent bills have taken more than a calendar year to complete. We also examine the set of agricultural policy issues most likely to be focused on by the US agricultural sector as offering the best opportunities to enhance demand for their products over the next few decades, or on the negative side, to complicate their operations. Many of these issues, such as agricultural trade policy, renewable energy, food safety regulation, and biotechnology regulation, fall largely outside the traditional jurisdiction of the House and Senate Agriculture Committees.

Stephanie A. Mercier, Steve A. Halbrook

Backmatter