Two weeks ago in this column we looked at the earliest agricultural policies that were put in place by the European settlers and their descendants in what is now the US. For the most part, though not exclusively, the policies can best be described as developmental policies because they 1) increase the supply of inputs, 2) decrease the cost of inputs, or 3) improve the quality of inputs.
The result of these policies was the tendency for crop prices to fall as supply steadily expanded, often faster than demand. In this column, we take a look at the various ways that farmers tried to tackle the problem of chronic low prices.
In his book “The Farmers’ Movement 1620-1920,” Carl C. Taylor explains that farmers in the pre-Civil War days had begun to form agricultural clubs to wrestle with the questions of production, markets, and the low prices they received while they saw the railroad magnates getting wealthy off the transportation of their production. In 1858, Illinois farmers held a meeting at Centralia and developed the Farmers Platform of 1858, a Declaration of Principles, and a Plan of Operations.
In the platform—quoted from Taylor—they said, “We believe that good prices are as necessary to the prosperity of farmers as good crops.” They then went on in the Declaration of Principles to say that “labor and capital employed in agriculture should receive as much reward as labor and capital employed in other pursuit; [and] that as the exchanger is merely an agent between the producer and consumer, he should not have a chief voice in the establishment of prices.”
The second item in the Plan of Operations foreshadowed the development of the cooperative movement: “The formation of wholesale purchasing and selling agencies in the great centers of commerce so that producers may, in a great measure, have it in their power to save the profits of the retailers.”
The fourth item identified what would become part of the mission of the United States Department of Agriculture (USDA) when it was formed by Abraham Lincoln on May 15, 1862: “The organization of such a power as to insure the creation of a national agricultural bureau, the main object of which shall be an annual or semiannual census of all our national products, and the collection and dissemination of valuable seeds, plants, and facts.”
While things were tough for farmers in the Pre-Civil War era, they were worse in the years that followed. As Taylor writes, “The price of cotton, which had reached $1.01 per pound in the New York Market in 1864, fell almost steadily to 8.16 cents per pound in 1878; the price of corn fell from 78.1 cents in 1867 to 31.3 cents per bushel in 1878, and wheat fell from $2.06 per bushel in 1866 to 77.2 cents in 1878.”