Prosperity & Depression “What goes up, always comes down.” years of unbridled growth –farm prices rose –successfully reduced much of the drudgery of farm work –parity rate was favorable –ratio between farm price and non- farm goods

Formula for the Good Life — Good Life = f (hard work, thrift, saving, investment, and right thinking) — Golden Age of Agriculture base years for Parity comparisons — World War I increased demand farm prices doubled

— Doubling of farm prices –bid up land prices -- 70% increase — 1918 War ends--agriculture enters a recession and in 1920 there was a collapse –farm prices fell by 50% –wave of farm bankruptcies — nation enters an economic depression – durable good production fell 80% farm income declined 40% farm income declined 40%

The BIG Picture Prosperity Depression

The Beginning of Scientific Agriculture 3 Essential Components 1) The discovery of scientific relationships 2) The development of new technologies based upon these scientific relationships 3) The adoption of new technologies on farms

1865 Civil War ends WWI WWII Great Depression The Ups and Downs of the Farm Economy

Conservation of Natural Resources million acres of timberland set aside 1901 President Theodore Roosevelt elected 1901 Bureau of Forestry (US Forest Service) established million acres into National Forests 1907 Became accepted principle that it was the proper function of federal government to carry out public works programs to control stream and river flows

Foundation of Assistance for Agriculture 1862 Morrill Act Homestead Act USDA created

Chronic problems of farmers credit markets 4 both addressed by Country Life Commission Farm Loan Act Capper Volstead Act Farm Bloc -- major initiatives Packers & Stockyards Act Futures Trading Act Emergency Agricultural Credit Acts Farm Loan Act revisions

In response to economic hardship, farmers first sought to organize Grange Movement -- cooperatives Secondly they turned to Congress for assistance Farm Bloc Joint Commission of Agricultural Inquiry -- Henry C. Wallace Peek-Johnson -- Equality for Agriculture McNary-Haugen “hunkered down”-- The Great Depression New Deal WW II Technology

Journal Question: What conditions led to the “Golden Age of Agriculture”? Will we ever reach such a situation again? #4

Responses — Ignore/deny problem and minimize its impact — Blame is a collective character flaws — Blame the victim — Emphasize development –Community –Rural –Economic

Responses — Agriculture support programs and policies –Target prices –Deficiency payments –Income payments — Welfare programs –Food stamps –Unemployment benefits –ADC — Push for improved efficiency and productivity –Drive for industrialization

Poverty and Industrialization — In a response to declining or stagnate conditions agriculturalist turned to industrialism emphasizing productivity, efficiency, and outputs (Yields) — Implication of Industrialization –Increase use of purchased (off-farm) goods –Increase capital inputs –Decrease labor requirements –Increase use of Technology –Increase outputs (and therefore surpluses)

Consequences of Industrialization

1. Decline in labor –Technology –Capital intensification 2. Completive Losses –Some farmers are ill-equipped to handle change or new complexities –Unable to respond well enough to upturns in economy 3. Discriminating policies or the residual effects of past discrimination on groups common in rural areas –American Indians –Blacks