- In the wake of the Great Depression came the New Deal and the farm legislation that followed.
- With the adoption of the 1996 Farm Bill, agribusiness achieved their goal anyway—the elimination of set-asides.
- The federal crop insurance program may be as hard to defend as the Direct Payment program.
During World War I, the price of such essential agricultural products as corn and hogs rose as the conflict created havoc for European farmers. European agricultural production plummeted as soldiers plowed the ground with trenches from which they fought each other. At the same time that warfare reduced European agricultural production, it increased the demand for food as soldiers arrived from outside of Europe.
With the Yanks coming into the war on the side of Great Britain and France, the administration urged U.S. farmers to increase production of things like corn and hogs to help feed the boys overseas. No sooner had U.S. farmers fully ramped up production than the war was over and the European farmers wanted to feed their own people. As European agricultural production recovered, U.S. exports plummeted and soon U.S. agriculture was in a depression, a decade before the Great Depression.
With little or no money, farmers were not buying many plows or any other agricultural implements. But, because they had responded to the call to increase production as a part of the war effort, farmers felt they deserved some help from the federal government.
George Peek, President of Moline Plow Company, along with Hugh Johnson, the company’s general counsel, proposed a farm relief act that in essence created a two-price market, a higher price protected by higher tariffs and a lower export price subsidized by a fee paid by consumers of agricultural products. The legislation became known at the McNary Haugen Farm Relief Bill, named after its two Congressional sponsors.
Though supported by farm leaders and the major farm organizations, it was twice defeated in Congress and the two times it did pass, it was vetoed by President Calvin Coolidge.
With McNary Haugen, the benefits to farm implement manufacturers and dealers were indirect; if farmers were making money, they would purchase new equipment.