FDR's Farm Policies
By Monica @ 8:13 AM   
Those of you who've read my short history of the USDA know that the agency expanded greatly under FDR's administration. I also make brief reference in the same document to FDR's bungled attempts to reduce crop and animal production, but here are some more details from Ari Armstrong's FreeColorado, in which Armstrong writes about Burton Folsom Jr.'s New Deal or Raw Deal?
Here's the basic story. Hoover with his Smoot-Hawley Tarriff destroyed American agricultural exports. Then, with the Agricultural Adjustment Act of 1933, Roosevelt paid farmers with tax dollars to stop growing crops on some of their land, artificially propped up the prices of various (politically selected) agricultural products, and unleashed thousands of bureaucrats to enforce the Byzantine controls. The bureaucrats were, of course, paid to reduce agricultural output and increase prices through taxes on food processors that were passed along to consumers.
And yet some people continue to praise FDR as an enlightened, "progressive" president, despite the profound harm of his stunningly stupid programs.
Folsom notes on page 67, "In 1933, the U.S. was plowing under 10 million acres of cotton and killing 6 million piglets; in 1935, the U.S. was importing 36 million (bales) of cotton and 2 million pounds of ham and bacon."
What is less well known is that we are still subsidizing agricultural overproduction, though in somewhat different ways now. This overproduction is ironically spurred (as it was in the decades preceding the FDR era) by the some of the USDA's own research, so that we are paying for both the creation of the problem and the "solution" to the problem. How do we pay for this overproduction? Through "commodity crop" subsidization and storage of surplus crops, which cost the taxpayer roughly $10 billion yearly from 2002-2006. Under various conservation incentives, Farm Bill money is also used to pay farmers to not plant crops periodically in order to enhance soil fertility because of past policies that encouraged the overproduction and encouraged unwise agricultural practices in the first place.
Farmers have let fields lie fallow for thousands of years as a wise agricultural practice to enhance soil fertility. Now we are paying farmers to do it because the government has, for decades, paid farmers to produce too much.
A prime example of how government intervention spurs unwise agricultural policies is the subsidization of corn for ethanol. Instead of planting corn on beans, farmers will for the first time ever plant corn on corn, which would be against their long term interest in a truly free market. Planting legumes such as beans results in higher soil nitrogen due to nitrogen fixation. Now that farmers will not be replenishing soil nitrogen through this ancient method, more inputs will be needed which will further raise the price of corn. This will almost undoubtedly lead to the need for more "conservation incentives" to "solve" the soil fertility problems caused by the ethanol subsidies in the first place.
Today, approximately 95%-96% of the USDA annual Farm Bill Budget goes toward programs not devised until the FDR era, approximately 70 years after the inception of the USDA. These are the School Lunch Program, Food Stamps, and the various "farm support" programs described above.Labels: Government Idiocy, Subsidies, Why the USDA is Not Your Friend
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2 Comments:
i feel sorry for anyone who doesnt recognize the flaws in your idea. First of all, the Agricultural Adgustment Act was for the farmers benifit. Farm forclosure due to the low prices of crops caused by overproduction, FDR and his brain trust recognized eliminating overproduction was the first step to saving America's farming industry.
Critisizing FDR and the New Deal is laughable considering how well it worked in both the short term and long term.
Don't like it? Tear up your social security card and enjoy you're freedom from "government idiocracy"
What caused the overproduction? Farm production *needed* to reduce post-war because it had only expanded to meet overseas demand, which was no longer necessary.
What FDR's policies did was to exacerbate farm overproduction by keeping unneeded farmers in business. It's the same principle as the recent bailouts/nationalization of various industries. And it's been a disaster. The market needs to change in response to changing demands. Markets don't remain static forever and the government shouldn't force them to do so.
Where did the money come to destroy pigs and crops? From other taxpayers. During a Depression, to boot.
For more information, see my much longer article on this issue, here: http://www.theobjectivestandard.com/issues/2009-summer/us-farm-policy.asp
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