Government Intervention in U.S. Agriculture: Part 1

April 11, 2013   |   Tags: , , , , ,
Rolling Hills with Electricity Poles and Power Lines
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Starting today and continuing into next week, I’ll be discussing government involvement in agriculture in detail, especially policies enacted during the late 1920s and the New Deal era. Here’s some background to start out with…

Louis Carabini writes in Inclined to Liberty about being a child during the 1930s, having his father talk to him about “the government’s policy of paying farmers to destroy their pigs.” Even then, the idea seemed to him utterly illogical. “Although he highly admired President Franklin Roosevelt,” Carabini explains, “he could not make sense of that policy, and even though I was only a tyke at the time, it seemed rather strange to me too.”

Indeed, when one considers the history of agricultural legislation in the United States, he or she is bound to encounter those puzzling laws which were deemed necessary, and eventually passed, during the era of the Great Depression. The most important of these were the Agricultural Marketing Act of 1929 (AMA) passed under President Hoover, and later, the Agricultural Adjustment Act (AAA) that would follow it under Roosevelt. Each law basically put into place a government-assisted monopoly for the agricultural industry.

Eventually, under the AAA, subsidized farmers would be forced to limit their production of food and related crops, raise prices, and simply allow supposedly inevitable economic growth to set in. The legislation was undoubtedly a cause of economic growth; the problem, however, was that the economic growth occurred only within the subsidized agricultural sector, benefiting wealthier recipients while disenfranchising poorer landowners.

The policies were completely ineffective. They would lead to rising prices, unnecessary destruction, and – as an eventual result of gross underproduction – the consequence of food rationing during the Second World War.

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