Agriculture and the US economy An analysis of the role of agriculture in US economy

Introduction Favourable natural conditions government assistance since 1930’s early farming patterns set by British - large areas to private companies at independence all un-settled land became Federal property

Introduction - 2 Land sold at $2.50 per acre Homestead Act 1862 allowed large areas to be settled for free same year saw large areas of Federal land set aside for free farming Endowment of colleges and universities under Morrill Act boosted teaching of agriculture many freed slaves remained in south as sharecroppers at end of Civil War

Introduction - 3 Plentiful food, mills, factories and shops fuelled industrialisation new inventions e.g iron ploughshare boosted output by 1860 agriculture accounted for 82% of exports Agriculture drove development farmers start to target railroads, shipping and merchants seeking better deals co-operative banks formed 1896 backed Bryan for President - he lost

The twentieth century First two decades a golden era for farming extension services, army assistance and research all provided at Federal level prices fell following WW1 by 1930’s dustbowl term familiar 1933 Roosevelt proposed limiting production and raising prices guaranteed prices and bought excesses Electrification extended new roads

The twentieth century - 2 Technical advances financed by Federal funds 1954 Food for Peace programme introduced boosted exports domestic poor helped as well in Johnson’s war on poverty But as output rose so did cost of subsidies 1973 payments linked to removing some land from production some crops removed from subsidies grains, rice and cotton remain subsidised

The 1980’s and 90’s By 1980’s subsidies costing + $20,000 million p.a support prices dropped and large areas taken out of farming make US agriculture internationally competitive In 1996 another large part of subsidies removed encourage US framers to think global most subsidies should have been phased out by end of 2002, though Asia crisis delayed this

World Trade Interdependence encouraged need to regulate farming across trading countries should farmers be protected? Does this shrink international markets? Reduce prices and farming income? Increase surpluses in exporting countries? 1986 Uruguay Round started US wanted top 90 countries to gradually remove all subsidies

World Trade - 2 Main US targets were EU and Japan Proved difficult to get agreement Uruguay Round finally completed in 1995, and most member states agreed to cut farm subsidies and price controls Farming is big business but it continues to overproduce agribusiness through consolidation m farms averaging 190 hectares 1.2m employed

World Trade - 3 In 1900 half US workforce was on the land. 2000= 2% will urban dwellers pay increased prices for food? Will they support large Federal government subsidies? Will world market emerge free of barriers? Perhaps the day of family farm so popular with film makers is going to disappear?