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Abstract
What role did farm subsidies play in producing the current industrial agricultural system in the United States? This paper examines that question by using a model of the hunt for superprofits mediated by state intervention as applied to the origins of farm programs during the 1930s. The essay argues that farm programs intensified the industrialization of farm production begun in the 1920s. In doing so, state intervention—ostensibly on behalf of the family farm—increased volatility, crises, and disparity within the farm sector and encouraged the rise of capitalist agribusiness at taxpayers’ expense, situating farmers as little more than conduits for cash payments from the government. Farm subsidies created an ever more expensive and entrenched system of entitlements, along with a far-flung configuration of industries with a vested interest in their continuation, and helped secure conditions for successful industrial capitalist development in the broader economy.
Acknowledgments
Thank you to Boone Shear and George DeMartino for helpful comments and suggestions on this manuscript.
Notes
1. For example, the same year that President Clinton promised to “end welfare as we know it” with the Personal Responsibility and Work Opportunity Act, the 1996 “Freedom to Farm” or Federal Agriculture Improvement and Reform Act promised an end to farm subsidies. Subsidy payments to farmers were not phased out, however, and in the years immediately following the passage of the act actually increased to record levels. See “Commodity Subsidies in the United States Totaled $177.6 billion from 1995–2012,” Environmental Working Group, accessed 12 March 2013, http://farm.ewg.org/progdetail.php?fips=00000&progcode=totalfarm®ionname=theUnitedStates.
2. “Agricultural Productivity in the U.S.,” USDA Economic Research Service, last modified 13 June 2014, http://www.ers.usda.gov/data-products/agricultural-productivity-in-the-us.aspx#28247.
3. For further development of the arguments presented in this paper, as well as their relationship to class and gender on family farms, see Ramey (Citation2014).
4. H. A. Wallace, “A Declaration of Interdependence,” New Deal Network, accessed 27 February 2013, http://newdeal.feri.org/wallace/haw05.htm.
5. These payments constituted a new source of revenue from the state, as follows: . This new revenue position constituted a nonclass revenue flow NCR because it did not stem from the production, appropriation, and distribution of surplus. Farmers’ revenues from rental payments from the state were equal to the government-set price at the “fair market value” PFMV for the crop based on the goal of 1909–14 parity, times the average number of units of the crop yielded during the base period
(for corn this was initially 1928–32, for example), times the number of acres N (or the portion of those acres) enrolled in the allotment program.
6. In addition, the program rewarded land ownership more so than land tenancy, since landowners were not obligated to share their benefit checks with tenants, and acreage reductions meant fewer tenants. These trends were particularly evident in the South, as landlords evicted their tenants, consolidated plots, and mechanized, causing massive dislocations and radically changing Southern agriculture.
7. J. S. Russell, “Iowan Gets First U.S. Corn Loan,” Des Moines Register, 25 November 1933.
8. If we assume that the market price is equal to the social unit value EV/UV, the new revenue position can be expressed as follows: NCRCCC = |(PFMV − EV/UV)| × UV.
9. I assume for simplicity that, before adoption, market price = social unit value = private unit value.
10. As above, the farmers’ new revenue position constituted a nonclass revenue flow (NCR) because it did not stem from the production, appropriation, and distribution of surplus. In this I follow the naming convention used by Resnick (Citation2006).
11. Recall that price-support payments were administered by the Commodity Credit Corporation (CCC).
12. Although government policy supporting cash farm incomes was important in this process, an accident of weather played no small part. A devastating drought in 1934 led to the accidental discovery of a drought-resistant hybrid. The tipping point for the industry came with a second major drought in 1936, the same year the new hybrid was introduced commercially. Even though hybrids were not clearly superior under normal growing conditions, in demonstrating an undeniable edge at averting complete crop failure, hybrids overcame farmers’ resistance (see Sutch Citation2011).
13. I follow Resnick and Wolff (Citation2006, 221) in defining monopoly as “a particular distribution of power in and over a particular institution, namely a market … Monopolists, by definition, have the power directly and purposefully to influence prices in the markets where they sell commodities.”
14. “Farm Tool Makers Assailed by FTC,” New York Times, 7 June 1938.
15. The agribusiness giant Cargill, for example, was the world's largest private corporation in 2013 according to Forbes.com.
16. H. A. Wallace, “Technology, Corporations, and the General Welfare,” New Deal Network, accessed 27 February 2013, http://newdeal.feri.org/wallace/haw12.htm.
17. The cost of the program was also borne by consumers, who paid higher-than-unit-value prices for corn and other supported commodities; and taxpayers, who paid for government price supports.
18. “Cultivating Influence: The 2008 Farm Bill Lobbying Frenzy,” Food and Water Watch, 17 July 2012, https://www.foodandwaterwatch.org/pressreleases/cultivating-influence-the-2008-farm-bill-lobbying-frenzy/.