It is ironic that new farm bill finally moved ahead in congress just as Bob Bergland passed away and as acute levels of acrimony prevailed in Washington. Bergland was a farmer from northwest Minnesota who served three full terms in congress when cooperation across the aisles was common and there were bipartisan consensuses on many issues. He also was the U.S. Secretary of Agriculture who showed greatest concern about the structure and future of farms and rural society.
As Ag Secretary for all of Jimmy Carter’s term, Bergland commissioned a deep review of agricultural policies and their effects on rural economies and rural society. “A Time To Choose,” the report stemming from this study was unusual in its depth and breadth. Ironically, or tragically depending on one’s point of view, the study had little discernable effect on U.S. farm policies or trends in farm structure. It was overwhelmed by the farm financial crisis that began to unfold only three years later.
That the 2018 Farm Bill is passing with the provisions it contains is testimony to the fact that while ag production and rural society have changed tremendously, federal farm policies continue in ruts cut decades ago.
Understanding how policies persist and how politicians and political institutions resist change might be a legacy of Bergland’s career. It certainly is manifest in his life, one that saw remarkable change in agricultural technology and the global food economy, with little change in government programs.
Born on a farm near Roseau, Minnesota in 1929, his father is listed as a garage mechanic. That combination of income sources was not uncommon then, and is nearly the rule now if one considers enterprises meeting the official USDA definition of “farm.”
These are ones that sell at least $1,000 in farm products a year. That threshold is not adjusted for inflation and has not changed for decades. This results in statistics about “farms” being deeply misunderstood by most people. An “average” often is a very dangerous indicator, particularly for variables that are highly skewed. Few are more skewed than agriculture.
When Bergland was born 90 years ago, farming and small towns that were dependent on agriculture were already in economic depression. The economy-wide collapse that unfolded between the stock-market crash at the end of 1929 and the bottom of the drop in mid-1933 would make things worse, but the good times that prevailed for farmers from 1910 through World War I ended abruptly in 1918. Prices of all ag products dropped. The 1920s boom was confined to cities.
Farming then still depended largely on animal power and human toil. Nearly all corn and cotton was picked by hand. Cows were milked by hand. Cream was separated from milk by hand-cranked machines. Wheat, oats and other grains were tied into bundles with machines and then threshed in machines driven by steam or early internal-combustion engines, but getting the bundles from field to machine involved backbreaking labor. Hay harvesting and silo filling involved similar toil. The first compact row-crop tractors were becoming common, but horses still were used for most crop operations.
The boom-bust cycle at Bergland’s birth and into his adulthood was not new. Prices had been high during the Civil War, both because of demand for military use and from general inflation. But as prices abruptly were cut in half by the return to the gold standard after that war, agriculture had suffered along with logging and mining. Things did improve in the new 20th century. Indeed, the 1910-14 period is often cited as the most favorable one ever for U.S. farmers.
In 1900, about half of all Americans lived on farms. When Bergland was born into a depressed farm economy, that was about 40 percent. But before he was in high school, the boom of another war had brought good times back.
Such oscillations had been accepted as the natural order until the 1920s, when two farm-state Republicans proposed the McNary-Haugen plan for the government to buy up ag products to raise farm prices and incomes. These purchased would be dumped into world markets with import tariffs to prevent world surpluses from feeding back into our country.
The plan was never adopted, but concern about farm problems also drove the disastrous Smoot-Hawley tariff, drafted by Republicans from Oregon and Utah. Introduced just as financial markets collapsed and the Federal Reserve allowed the money supply to shrink, higher tariffs did not help farmers. The ricocheting collapse of the global economy made things worse.
With Franklin Roosevelt in 1933, active government programs to raise farm prices and incomes were a central to his New Deal. At least a third of all people lived on farms, so higher ag prices aided a large slice of the population. The new approach was to limit production by restricting plantings and, initially, even killing baby pigs. Any increase in price was welcome, but restricting production was resented.
This Agricultural Adjustment Act had mixed results, but, like many other Depression problems, was swept away as the world returned to war with a vengeance in late 1939. Once again, U.S. agriculture was in an enviable position as demand rose and production in combat-torn areas fell. Output price controls held down profits somewhat, but it was a new boom, one that continued in the immediate post-war period as U.S. food continued to feed a shattered world.
But technology had continued apace. Mechanical corn and cotton picking rapidly became the norm and combines displaced binders and threshing machines. Rural electrification, which had begun in 1935 ,was completed and so milking machines, refrigerated bulk-tanks for sale of whole milk, silo unloaders, manure gutter cleaners and other devices reduced physical labor. Hybrid seed corn, artificial insemination of cows, synthetic fertilizers and chemical weedkillers all boosted output.
The problem was now excess production and falling prices. The term “the farm problem” became common. Rural-to-urban migration increased. Farms consolidated into larger units, but remained predominantly operated by family labor except in the south and in fruit and vegetable production. With the new Eisenhower administration, government action shifted to buying up “surplus,” commodities and dumping some into international markets as “Food for Peace.” But surplus stocks accumulated apace as they would for the European Union two decades later.
The new Kennedy administration returned to supply controls, but using the carrot of payments for not planting rather than mandatory limits. The grain bins built to store government grain were auctioned off to farmers.
During this time, Bergland had taken ag courses at the University of Minnesota and started farming, but had a bad outcome and had supported himself as a carpenter. Then he worked as an administrator within USDA and eventually returned to farming. But agricultural profitability was stagnant from the early 1950s to 1973.
Then, the Bretton Woods system of international payments that had kept the dollar overvalued and thus effectively taxed U.S. exports, collapsed at the same time that the USSR, anxious to quell popular unrest by increasing food supplies, started buying U.S. grain. Richard Nixon had appointed a new Fed Chair who unleashed the greatest peacetime inflation in U.S. history. Farm product prices soared as did sales of machinery and investment in new facilities. The boom was on. Farm programs lost relevance.
However, the boom changed to bust in less than a decade. Jimmy Carter appointed Bergland who did his deep study to fundamentally evaluate farm policy. But Carter also appointed a new Fed Chair who boosted interest rates to choke off inflation just as the new Reagan administration got a Democratic-controlled congress to go along with lower taxes and higher defense spending. This “borrow and spend” approach combined with tight money drove up interest rates and boosted the value of the dollar, choking off U.S. farm exports.
By now, farms were financially overextended and hundreds of thousands failed. So did thousands of banks and much of the federal farm credit coop system. The wring-out was deeply painful. Bergland’s study was forgotten and there were nearly two decades of price and profit stagnation
The fall in the value of the U.S. dollar after Sept. 11, 2001 and the apparently miraculous expansion of the Chinese economy turned that around. Farm product prices hit new highs and land prices tripled in many areas. But the “global commodity supercycle” petered out by 2012 and harsh adjustment is back again. The structure of agriculture is much more concentrated as is rural society. And technology continues to boost productivity. But we just passed a farm bill that is an incoherent mish-mash of essentially the same policies we have tried over the last 85 years. There is no clear sense of why we are spending or who should get how much. And there is little interest in examining all this.