 | The examples and perspective in this article deal primarily with the United States and do not represent a worldwide view of the subject.(November 2021) |
A farm crisis describes times of agricultural recession, low crop prices and low farm incomes. The most recent US farm crisis occurred during the 1980s. [1] [2] [3]
A farm crisis began in the 1920s, commonly believed to be a result of high production for military needs in World War I. At the onset of the crisis, there was high market supply, high prices, and available credit for both the producer and consumer. The U.S. government continued to instill inflationary policy following World War I. [4] By June 1920, crop prices averaged 31 percent above 1919 and 121 percent above prewar prices of 1913. Also, farm land prices rose 40 percent from 1913 to 1920. [5] Crops of 1920 cost more to produce than any other year. Eventually, a price break began in July 1920 which squeezed farmers between both decreasing agricultural prices and steady industrial prices. Examples of decreasing agriculture prices include: By 1933, cotton was only 5.5 cents per pound, corn was down 19.4 cents per bushel, and hogs declined to $2.94 instead of their respective 1909–1914 average prices of 12.4 cents per pound, to 83.6 cents per bushel, and $7.24 per hog. Furthermore, a region of the great plains was hit by an extreme drought which added to the agricultural difficulties of the time. [6]
Throughout this crisis there were many attempts to form Farmers' Unions. This was difficult considering the lack of effective communication technology, the lack of electricity on many farms, and the overall size of the country. The Agricultural Marketing Act of 1929 intended to bring government aid to cooperatives. It allowed the Federal Farm Board to make loans and other assistances in hopes of stabilizing surplus and prices. [7] Later, Agricultural Adjustment Act (AAA), which was enacted on May 12, 1933, aimed to bring back pre World War 1 Farmers' abilities to sell farm products for the same worth they were able to buy non-farm products. The Act involved seven different crops: corn, wheat, cotton, rice, peanuts, tobacco, and milk. Farmers were paid to not plant those seven crops, thus decreasing supply and returning to market equilibrium. In order to prevent noncooperative farmers from taking advantage of other farmers decreasing supply the bill states "is to keep this noncooperation minority in line, or at least prevent it from doing harm to the majority, that the power of the Government has been marshaled behind the adjustment programs" In other words, the benefits from payments to cooperative farmers were designed to be more beneficial than being noncooperative and flooding the market. The AAA was deemed unconstitutional on January 6, 1936. [8] Further reformation included Farm Credit Act of 1933, which allowed farmers to re-mortgage no longer affordable property, as well as the Frazier–Lemke Farm Bankruptcy Act.
The United States experienced a major agricultural crisis during the 1980s. By the mid-1980s, the crisis had reached its peak. Land prices had fallen dramatically leading to record foreclosures.
Farm debt for land and equipment purchases soared during the 1970s and early 1980s, doubling between 1978 and 1984. Other negative economic factors included high interest rates, high oil prices (inflation) and a strong dollar. Record production led to a fall in the price of commodities. Exports fell at the same time, due in part to the 1980 United States grain embargo against the Soviet Union. The Farm Credit System experienced large losses, which were the first losses since the Great Depression. [9] [10] The price of farmland was a significant factor. Credit availability and inflation had contributed to an increase in the price of farm land. Demand was further bolstered by high farm incomes and capital gains on farm real estate, when many farmers expanded their existing operations. The value of farmland increased so drastically that it attracted investment from speculators. [10]
Agricultural banks felt the impact of the crisis. There were 10 bank failures in 1981, only one of which was an agricultural bank. In 1985, the number rose to 62, of which agricultural banks accounted for over half. [10]
The Agricultural Adjustment Act (AAA) was a United States federal law of the New Deal era designed to boost agricultural prices by reducing surpluses. The government bought livestock for slaughter and paid farmers subsidies not to plant on part of their land. The money for these subsidies was generated through an exclusive tax on companies which processed farm products. The Act created a new agency, the Agricultural Adjustment Administration, also called "AAA" (1933-1942), an agency of the U.S. Department of Agriculture, to oversee the distribution of the subsidies. The Agriculture Marketing Act, which established the Federal Farm Board in 1929, was seen as an important precursor to this act. The AAA, along with other New Deal programs, represented the federal government's first substantial effort to address economic welfare in the United States.
An agricultural subsidy is a government incentive paid to agribusinesses, agricultural organizations and farms to supplement their income, manage the supply of agricultural commodities, and influence the cost and supply of such commodities.
Agriculture is a major industry in the United States, which is a net exporter of food. As of the 2017 census of agriculture, there were 2.04 million farms, covering an area of 900 million acres (1,400,000 sq mi), an average of 441 acres per farm.
The history of agriculture in the United States covers the period from the first English settlers to the present day. In Colonial America, agriculture was the primary livelihood for 90% of the population, and most towns were shipping points for the export of agricultural products. Most farms were geared toward subsistence production for family use. The rapid growth of population and the expansion of the frontier opened up large numbers of new farms, and clearing the land was a major preoccupation of farmers. After 1800, cotton became the chief crop in southern plantations, and the chief American export. After 1840, industrialization and urbanization opened up lucrative domestic markets. The number of farms grew from 1.4 million in 1850, to 4.0 million in 1880, and 6.4 million in 1910; then started to fall, dropping to 5.6 million in 1950 and 2.2 million in 2008.
The Farm Credit System (FCS) in the United States is a nationwide network of borrower-owned lending institutions and specialized service organizations. The Farm Credit System provides more than $343 billion in loans, leases, and related services to farmers, ranchers, rural homeowners, aquatic producers, timber harvesters, agribusinesses, and agricultural and rural utility cooperatives.
Robert Weir, was a Canadian politician.
Canada is one of the largest agricultural producers and exporters in the world. As with other developed nations, the proportion of the population agriculture employed and agricultural GDP as a percentage of the national GDP fell dramatically over the 20th century, but it remains an important element of the Canadian economy. A wide range of agriculture is practised in Canada, from sprawling wheat fields of the prairies to summer produce of the Okanagan valley. In the federal government, overview of Canadian agriculture is the responsibility of the Department of Agriculture and Agri-Food.
Agriculture in South Korea is a sector of the economy of South Korea. Korean agriculture is the basic industry of the Korean economy, consisting of farming, animal husbandry, forestry and fishing. At the time of its founding, Korea was a typical agricultural country, with more than 80% of the population engaged in agricultural production. After land reform under the Lee Seung-man administration, economic revitalization under the Park Chung-hee military government and the wave of world trade liberalization that began in the 1980s, Korean agriculture has undergone dramatic changes. Through the Green Revolution, Korea became self-sufficient in rice, the staple food, in 1978, and in 1996, Korea became the first Asian country after Japan to mechanize its agriculture with fine-grained cultivation. The development of Korean agriculture has also led to the development of agriculture-related industries such as fertilizer, agricultural machinery and seed.
Industrial agriculture is a form of modern farming that refers to the industrialized production of crops and animals and animal products like eggs or milk. The methods of industrial agriculture include innovation in agricultural machinery and farming methods, genetic technology, techniques for achieving economies of scale in production, the creation of new markets for consumption, the application of patent protection to genetic information, and global trade. These methods are widespread in developed nations and increasingly prevalent worldwide. Most of the meat, dairy, eggs, fruits and vegetables available in supermarkets are produced in this way.
In the United States, the farm bill is comprehensive omnibus bill that is the primary agricultural and food policy instrument of the federal government. Congress typically passes a new farm bill every five to six years.
For millennia, agriculture has played an important role in the Chinese economy and society. By the time the People's Republic of China was established in 1949, virtually all arable land was under cultivation; irrigation and drainage systems constructed centuries earlier and intensive farming practices already produced relatively high yields. But little prime virgin land was available to support population growth and economic development. However, after a decline in production as a result of the Great Leap Forward (1958–60), agricultural reforms implemented in the 1980s increased yields and promised even greater future production from existing cultivated land.
Food versus fuel is the dilemma regarding the risk of diverting farmland or crops for biofuels production to the detriment of the food supply. The biofuel and food price debate involves wide-ranging views, and is a long-standing, controversial one in the literature. There is disagreement about the significance of the issue, what is causing it, and what can or should be done to remedy the situation. This complexity and uncertainty is due to the large number of impacts and feedback loops that can positively or negatively affect the price system. Moreover, the relative strengths of these positive and negative impacts vary in the short and long terms, and involve delayed effects. The academic side of the debate is also blurred by the use of different economic models and competing forms of statistical analysis.
The agricultural policy of the United States is composed primarily of the periodically renewed federal U.S. farm bills. The Farm Bills have a rich history which initially sought to provide income and price support to US farmers and prevent them from adverse global as well as local supply and demand shocks. This implied an elaborate subsidy program which supports domestic production by either direct payments or through price support measures. The former incentivizes farmers to grow certain crops which are eligible for such payments through environmentally conscientious practices of farming. The latter protects farmers from vagaries of price fluctuations by ensuring a minimum price and fulfilling their shortfalls in revenue upon a fall in price. Lately, there are other measures through which the government encourages crop insurance and pays part of the premium for such insurance against various unanticipated outcomes in agriculture.
World food prices increased dramatically in 2007 and the first and second quarter of 2008, creating a global crisis and causing political and economic instability and social unrest in both poor and developed nations. Although the media spotlight focused on the riots that ensued in the face of high prices, the ongoing crisis of food insecurity had been years in the making. Systemic causes for the worldwide increases in food prices continue to be the subject of debate. After peaking in the second quarter of 2008, prices fell dramatically during the late-2000s recession but increased during late 2009 and 2010, reaching new heights in 2011 and 2012 at a level slightly higher than the level reached in 2008. Over the next years, prices fell, reaching a low in March 2016 with the deflated Food and Agriculture Organization (FAO) food price index close to pre-crisis level of 2006.
Agricultural land is typically land devoted to agriculture, the systematic and controlled use of other forms of life—particularly the rearing of livestock and production of crops—to produce food for humans. It is generally synonymous with both farmland or cropland, as well as pasture or rangeland.
Agriculture in Jordan contributed substantially to the economy at the time of Jordan's independence, but it subsequently suffered a decades-long steady decline. In the early 1950s, agriculture constituted almost 40 percent of GNP; on the eve of the Six-Day War, it was 17 percent.
Despite the crisis in Syria, agriculture remains a key part of the economy. The sector still accounts for an estimated 26 percent of gross domestic product (GDP) and represents a critical safety net for the 6.7 million Syrians – including those internally displaced – who still remain in rural areas. However, agriculture and the livelihoods that depend on it have suffered massive losses . Today, food production is at a record low and around half the population remaining in Syria are unable to meet their daily food needs.
The Soil Bank Act of 1956 was part of the Agricultural Act of 1956 passed by the U.S. Congress. This act created the Soil Bank Program, which removed farmland from production in an effort to reduce large crop surpluses after World War II. Land deposited into the Soil Bank was then converted into conservation use. The idea for the Soil Bank was taken from legislation from the 1930s dust bowl and was similar to many depression-era solutions to lower crop prices. Eventually, the Soil Bank act of 1956 was overturned by the Food and Agriculture Act of 1965.
The Wheat Price Guarantee Act was a 1919 bill passed by Congress that gave the government the power to regulate the price of wheat.
The production of corn plays a major role in the economy of the United States. The US is the largest corn producer in the world, with 96,000,000 acres (39,000,000 ha) of land reserved for corn production. Corn growth is dominated by west/north central Iowa and east central Illinois. Approximately 13% of its annual yield is exported.