The agroclimatic conditions in which farmers in this state work are similar to Ukrainian ones: the climate is continental, temperatures in winter, spring and autumn are close to our conditions, summers are quite hot, and droughts are often observed. On average, there are 200 sunny days and 93 rainy days per year.
The main limiting factor for yield in Iowa, like here, is moisture. If we draw an analogy of precipitation between Ukraine and the state, then in Ukraine the amount of precipitation decreases from west to east and from north to south, and in Iowa it’s the other way around. On average, there is from 600 to 800 mm of precipitation per year, but, interestingly, 70% of this amount occurs from April to June. Just like in Ukraine, Iowa experiences a fairly long drought during July and August.
The territory of Iowa is five to six times smaller than Ukraine. The state's soils are black soils on moraines, which were formed many thousands of years ago as a result of glacial movement. Also in the southern part of the state are black soils on loess. The thickness of chernozem in some places can reach 1 m. The humus content in soils ranges from 2 to 6%.
One of the typical features of central Iowa is the presence of so-called saucers in the fields. These are usually poorly drained areas where flooding occurs quite often. And therefore in lately In such fields, at a depth of 0.5 m and at a distance of 20 m from each other, local farmers lay drainage systems. The mechanical composition of the soil in the state is diverse: it includes silty-alluvial loams, loams, and clay soils.
Soybeans and corn are the state's two main crops. Most of the area, which is 65%, is allocated for corn, the rest is sown with soybeans.
The crop fertilization system is very diverse. Farmers use different fertilizers, technologies for their use and application times, etc. Precision farming has become widespread, in which various sensor systems are used that help diagnose the surface of crop leaves and add the right amount of, say, nitrogen when feeding plants.
All nitrogen fertilizers for each crop are calculated at economically optimal rates. Such indicators as the amount of additional harvest obtained, its estimated price and the cost of fertilizer are taken into account. Also, fertilizer application rates for crops are adjusted taking into account the removal of nutrients from the soil during cultivation and as a result of soil erosion, evaporation, and the like. Quite a few in Iowa use nitrification inhibitors, which stop the urea decomposition process.
The most common nitrogen fertilizers are ammonium nitrate, UAN, liquefied ammonia and urea, part of which is supplied from Ukraine.
Quite a lot of discussion among farmers revolves around the question, which nitrogen fertilizers are the best for corn? In particular, applying UAN to the root zone or spreading urea?
Of course, you will argue that it is better to apply nitrogen to the root zone, however, as studies have shown, in some fields there was no difference in corn yield for both fertilizer options. Even though the urea caused minor burns to the leaves of the crop. Although when applying UAN, nitrogen losses will be less compared to surface application of fertilizer.
Another interesting fact: Iowa has a population of 3 million people and 15 million pigs. Therefore, there, manure is one of the main elements of fertilizer when growing soybeans and corn.
The average soybean yield in the state is about 4 tons/ha, and corn - 12 tons/ha. The use of transgenic varieties and hybrids allows local farmers to obtain larger yields compared to classic ones, due to better preservation of the crop. Often controversial questions arise among agronomists: what percentage of the harvest is provided by genetics, and what percentage by technology? Many scientific research confirmed that 60% of the harvest depends on crop genetics, the rest is provided by improved technology.
Selecting quality seeds is one of the most important decisions an American farmer makes when calculating yield potential. Crop breeding is aimed at increasing yields not by increasing the potential of a variety or hybrid, but by increasing sowing density. Therefore, every year the seeding rate per hectare of, say, corn increases by 830 plants while simultaneously reducing the row spacing. Therefore, now the average row spacing of corn there is 76 cm. Although the feasibility of such a decision in the state also conducts many field experiments, which quite often show that the effect of an increased seeding rate and reduced row spacing is not always present, because this or that hybrid is sufficiently -reacts differently to such changes.
One of the most difficult challenges for American farmers is finding the optimal crop technology to adapt to local weather conditions, which are different every year. After all, the only uncontrollable factor influencing modern agriculture today is the weather, so it is in accordance with it that it is necessary to develop technology for growing crops. It has also been experimentally established that weather conditions have a great influence, for example, on corn yield, which can be expressed additional receipt or, conversely, a shortage of grain at a level of 4 to 7 t/ha.
Quite a lot of attention in Iowa is paid to the sowing technology itself, because you need to clearly understand to what depth and what conditions it will fall into. Interestingly, many farmers in the state sow seeds in large amounts of crop residue. As for the timing of sowing, the state is conventionally divided into three agro-climatic zones. Thus, in the northeastern part, 95% of the window favorable for sowing falls on the period from April 12 to May 2; in the northwestern as well as central parts in the direction from west to east - from April 15 to May 18, and in the southern part (from west to east) - from April 11 to May 13. Still, they are approximate, since from year to year (just like in Ukraine) they are adjusted in accordance with current weather conditions and soil temperature.
High yields for the American farmer do not mean high profitability. In particular, in Iowa, low profitability of agribusiness is accompanied, as a rule, by low prices for grown products and high production costs. We were convinced of this after direct communication with farmer Lindsay Greiner from Iowa, USA, who is the chairman of the LIN-Shell Corp. family farm. and at the same time a member of the board of directors of the Soybean Producers Association.
We were interested, in particular, in the activities of this organization in an overseas state. What is the essence of its functioning? And this is what we learned from our interlocutor. The State of Iowa is divided into nine farming districts, each of which has two members of the association's board of directors. The latter is actually a private structure, financed by transferring funds from each farmer from the sale of soybeans 0.5% of the cost. Half of these funds remain in the local association, the other half goes to the national association. All funds from her fund have a targeted distribution: for example, for marketing, various research, and the like.
And now - about the farmer and his management
Family Farm LIN-Shell Corp. has about 700 hectares under cultivation. By US standards, this is a medium-sized farm. Of the total land, 400 hectares are in the private ownership of the Lindsay family, which are divided between the father and eldest son, the remaining 200 hectares are leased by the family contract. On the family farm, only two people are involved in the agricultural production process - Lindsay himself and his eldest son.
Lindsay Greiner's life developed in such a way that immediately after receiving secondary education he began farming. Total farming experience - 40 years. All this time he has been engaged in growing corn, soybeans and pig breeding. The farm has three pig farms, each containing 2.5 thousand fattening pigs. In running their business, they do not engage in livestock reproduction - young piglets (weighing approximately 10 kg) are purchased from another farm and then fattened. About 15 thousand pigs are sold annually.
From activities livestock farm Every year they receive 40 thousand liters of liquid manure, which is the main type of fertilizer to meet the needs of crop production. The qualitative composition of this fertilizer is as follows: the total amount of nitrogen in 1000 liters is about 24 kg, phosphorus - 11 and potassium - 24 kg. The rate of manure application on the farm is from 1200 to 2000 l/ha, depending on the type of soil, as well as the content of nutrients in it, which is determined using appropriate analysis. According to Lindsay, annual applications of organic fertilizer allow corn to be planted in a monoculture for many years. To reduce the loss of nutrients from manure, it is applied at a temperature not exceeding 10 ° C. One pig farm provides manure to an area of 50 hectares.
The cost of one pig farm is $650 thousand, and the total monthly income from it is $8765. From the last amount, according to the farmer, a certain part of the money goes to monthly deductions: in particular, $5600 - as loan payments and $1850 - operating expenses. Therefore, the net income from one pig farm is $1,300. Of course, this is not so much, but Lindsay is optimistic about his farming, because when he pays off his loan debts, the profitability of raising pigs will increase significantly.
To reduce costs when growing crops, American states are mainly introducing zero and minimum tillage technologies. If corn is grown after soybeans, then usually no additional fertilizer is used. As practice has shown, in particular, Lindsay, additional application of nitrogen in the form of liquid or granular mineral fertilizers does not provide the expected increase, but only increases costs. If you sow corn after corn, there is a need to add additional nitrogen (in the spring) - the norm is about 80 kg/ha in the form of anhydrous ammonia.
When the areas are saturated with corn, the state has a significant problem with pests on this crop, therefore, during sowing, to reduce the pesticide load on the environment, insecticides are applied to the soil in liquid and granular form.
seeds - $220, fertilizers - 280, plant protection products - 115, machinery use - 218, crop insurance - 64, land use tax - 635 (whether you are the owner or not), rent - 75, loan cost - $50.
As you can see, the most production costs come from seeds, fertilizers and land.
To cover production costs, Lindsay says corn yields need to be 12t/ha or more. When you get 11 t/ha, then in fact you have reached “zero”, and if it is less (depending on how much), then you will also be at a loss. With an average corn price of $150 over the past two years, most American farmers have had little or no profitability from growing corn.
During the corn growing season, pre- and post-emergence herbicides are used, so essentially there are no weed problems there.
If we draw an analogy with soybean cultivation, then the main components technological expenses there will also be seeds - $165 per hectare norm, fertilizers - $100, plant protection products - 114, use of equipment - 215, crop insurance - 45, land use tax - 365, loan cost - $30, respectively.
Farmers in the state primarily use genetically modified soybean seeds that are resistant to certain drugs (but not glyphosate, as they have recently noticed the emergence of more weed species that are resistant to Roundup).
Soybean yield varies according to different years from 4 to 6 t/ha. Soybean prices are more favorable than corn prices, so the trend toward more soybean acreage will only increase, according to Lindsay.
Soybeans are sown at the end of April - beginning of May with row spacing of 38 cm, or in a continuous way, where it is 15-17 cm. One of the problems encountered in its cultivation is American farmers- this is the ability to be affected by fungal diseases, the causative agent of which is contained in the soil.
One of them is especially harmful. Its danger lies in the fact that at the beginning of the development of soybean plants it does not appear visually, and already in the second half of the growing season of the crop, rapid plant death is observed in a soybean field affected by the pathogen (often locally). The disease is called sudden soybean death syndrome. Therefore, to avoid plant diseases, seed treatment with Cruiser Max control is mandatory. Therefore, depending on the weather conditions that develop during the soybean growing season, fungicidal and insecticidal protection is used. Thus, in wet weather there is a need to treat soybean plants with fungicides, and in dry and hot weather insecticides are most often applied, since aphids massively damage the crops.
Phosphorus and potassium fertilizers are applied mainly to the predecessor - corn, and, as a rule, they are sufficient for soybeans.
To reduce soil erosion by water, American farmers are planting additional protective strips in the middle of their fields. Soil testing shows that this actually helps reduce the loss of nutrients from the soil. This is especially true for fields located on steep slopes. Also great popularity Recently, cover crops have been acquired.
To effectively use mineral fertilizers, soil samples are taken every three years to determine the content of basic nutrients. Elements of precision farming are also used during sowing, fertilizing and applying pesticides. In this way, the family farm implements effective solutions at every stage.
As for the cultivation of other crops that are profitable in Ukraine (in particular, wheat and sunflower), it is worth noting that they are often not grown in Iowa because they are less profitable there. In addition, the humid climate makes them susceptible to diseases.
Conclusion
Therefore, in order to make small profits in agriculture, Iowa farmers have to make significant efforts and spend a lot on production needs. But despite this, Iowa farmers, through their dedicated work, continue to maintain their state's high reputation as a global grain producer. While quite a lot of Ukrainian agricultural producers do not undertake to grow a crop whose profitability is below 30%, they say, it is not very profitable... In fact, it should be understood that in Ukraine the current times of management are perhaps the best compared to what should be expect in the future: against the background of global competition, the profitability of crops will continue to decline.
G. Zholobetsky
magazine "Proposition", No. 4, 2017
From the earliest days of the country's existence, the picture of farmers working the land represented the essence of its existence. If any traveler were to make his way through the forest wilds of eastern North America on the eve of the appearance of European colonists there, he would see clearings strewn with unrooted stumps, where the indigenous inhabitants of the continent, the Indians, grew crops such as maize (Indian corn), beans and pumpkins. Today, from the window of an airplane soaring high above the Great Plains of central North America, a traveler will look out over endless fields of wheat, corn, soybeans and other crops.
The external forms have changed, but not the vital role of agriculture. Today, as before, agriculture provides the ability to meet people's basic needs. Agriculture and related industries account for more of the U.S. gross national product than any other industry. Agriculture also serves as a thread connecting new generations with the dreams and rhythms of life of their ancestors, ensuring continuity of the present with the past.
The leaders of the nation raised the virtues of the seasoned self-sufficient farmer as a role model for the entire nation from the earliest years of its existence. Thomas Jefferson, the third President of the United States, put it this way: Those who work the land are the most valuable citizens. The most energetic, the most independent, the most charitable, and they have the strongest ties to their country and its interests.
Of course, in real life, a farmer is never as independent as he imagines, for he is very dependent on the vagaries of the weather, the whims of the market, and government policy. Nevertheless, the American farmer demonstrated a spirit of individualism and egalitarianism that won the admiration of the rest of society. To a large extent, the values inherent in rural America were perceived and internalized by society at large.
American agriculture has a richness and diversity unsurpassed almost anywhere in the world. Partly thanks to the vastness of the country, partly thanks to the bounty of nature. Only in a relatively small part of the west of the country is precipitation so insignificant that deserts form. In the rest of the territory, precipitation is moderate to heavy, and rivers and groundwater allow irrigation work to be carried out if necessary. The vast expanses of flat or slightly rolling land, especially the Great Plains of the eastern states of the country, create ideal conditions for large-scale agriculture. Today, the size of the average American farm is about 180 hectares.
There has been a huge leap from the small subsistence farms of the past to today's structure, which combines small family farms with technologically advanced giant farms. To understand it, let's trace the development of farming in the United States and consider the strengths and weaknesses of American agriculture as it has developed today.
HISTORICAL SKETCH
The first American farmers, the continent's indigenous inhabitants, helped European settlers adapt European crops and farming methods to the soils and climate conditions of North America. This adaptation was relatively easy for the colonists. But to transfer something familiar to them to new soil European systems they found land ownership much more difficult. The English system, in which the English nobility owned gigantic holdings, where the farmer was only a tenant, was poorly suited to the conditions of the colonies, although planters and officials at times tried to copy it.
Ultimately, the system did not take root because there was too much land and too few workers. Farmers, other than slaves, could look for work in the city or buy their own land, which many did. As a result, small plots of freeholders and family farms became the basis of agriculture in America. Tenancy has become relatively widespread. With the exception of a few densely populated areas, American farms were generally fairly scattered and distant from each other, rather than clustered in the countryside. This contributed to the growing individualism and sense of self-reliance of the American farmer.
The abundance of land had not only positive, but also negative aspects. Since American farmers could always take another one after exhausting their allotment, they often plowed far more land than they could cultivate. They “mined” the land, destroying the fertile layer and not restoring it with the help of fertilizers. The arable land was cultivated carelessly, often along hillsides, and when the inevitable rains came, the water dug deep furrows in it. The careless farmer cared little about the consequences; he could always move west, south, or, in the worst case, somewhere else. More conscientious farmers, and there were many of them, worked under the burden of competition with their predator neighbors, who, of course, got the fruits of their labors on the land cheaper.
One of the ways to compete was to increase the efficiency of labor and the quantity of products produced, to which many farmers paid great attention. The owners of large farms, Thomas Jefferson, for example, who was not only the President, but also a southern planter, had sufficient leisure to master scientific methods of agriculture. Jefferson kept systematic records of weather observations and left detailed notes on many aspects of land use.
Soon after America gained independence, practices such as crop rotation and applying lime to fields (to reduce acidity) were adopted and widely spread. Their spread was facilitated by the growth of agricultural societies and the creation of farm magazines. At the local level, annual fairs provided an opportunity for farming families to share experiences and demonstrate achievements (prizes for best hay, best livestock, best cooking were contested). Farmers also got acquainted with the latest agricultural machinery. Technology played a key role in the rapid growth of agricultural production in the United States. Throughout the 19th century, new inventions and tools appeared one after another. At first, the sickle was replaced by a scythe during harvest, and then, from the early 40s of the 19th century, by mechanical mowers of Cyrus McCormick. The wooden plow was replaced by a cast iron and then (by 1845) a steel plow. By the time of the Civil War (1861-1865), machines were already used to harvest hay, thresh, harvest, plow and sow. The region known as the Midwest developed a strong agricultural machinery industry, centered in Chicago, Illinois.
In the second half of the 19th century, American agriculture developed with dizzying speed, which, among other factors, was facilitated by a powerful influx of colonists in the territories west of the Mississippi, “discovering” new lands there or replacing indigenous farmers (“Indians”) with newcomers. The federal government encouraged this westward push in a variety of ways. In particular, he concluded treaties with Indian tribes or resorted to force of arms, driving them into reservations (areas set aside exclusively for Indian residence). The federal government also provided free land grants to settlers and allocated land to railroad companies, encouraging expansion of the railroad network.
The law that established the free land use policy is known as the Homestead Act. Passed in 1862, at the height of the Civil War, it offered a homestead of 160 acres (85 hectares) to any settler family. Any head of household who had reached the age of 21 and was a United States citizen (or even about to become a citizen) could take ownership of a plot of public land by settling on it and living there for five years. If a family was eager to take ownership, they could purchase land for $1.25 an acre and live on it for six months. In subsequent years, the government provided settlers with opportunities to purchase even larger plots of land for free or for a nominal fee. This policy was made possible because the United States government considered itself to be the owner of almost all the lands west of the Mississippi, either by right of acquisition or right of conquest.
The Homestead Act strengthened the existing system of small family farms. It contributed to the outflow of surplus population from the eastern states and the creation of a layer of independent farmers. During the 19th century and early 20th century, the number of people owning or working on farms increased dramatically, peaking in 1916 at 13.6 million people, representing 14 percent of the population of the United States.
While the distribution of free or cheap land helped strengthen the family farm, it also had unintended consequences. By encouraging settlement of the prairies, where rainfall was poor and irregular (mainly the land west of what is now Oklahoma City), the Homestead Act doomed many families to half-starvation and uncertainty about the future. Many families from the eastern states, accustomed to considering 160 acres as more than a decent allotment, moved west and found that they could hardly support themselves on such a plot. The arid lands brought meager harvests, and there was not enough feed for livestock. Desperate, prairie farmers plowed and planted every last acre. With good rains, their harvests overstocked the market, thereby driving down prices and reducing revenues. During droughts, dust storms carried away the drying top layer of soil, depleting the fields.
After the end of the civil war, overproduction became one of the most important problems. The productivity of American farms increased not only because the planting wedge expanded, but also due to the development of agricultural machinery. Multi-share plows made it possible to lay several furrows on the field at once. Giant machines called combines performed a range of grain harvesting tasks. Since production significantly outstripped consumption, farmers' income for the products of their labor began to fall. The period from the 1870s to about 1900 was especially difficult for the American farmer.
The growing discontent among farmers gave rise to the explosive impetus for the creation of political organizations such as the Farmer's Defenders movement (1870s) and the Populist Party (1890s). Members of the Farmer's Defenders movement, more commonly known as the Grangers, opposed the monopolistic policies of railroad companies and their establishment of high tariffs. freight transport. Their efforts led to the passage of “Granger laws” in a number of states, which established government agencies to regulate issues such as freight rates. Grangers and cooperative societies were created to operate shops, warehouses and other infrastructure serving farming communities. Although many of the cooperatives founded by the Grangers fell apart due to the inexperience of their leadership, the rest survived, grew stronger, and to a certain extent serve as an example to this day. Farmers who sell California lemons under the Sunkist brand do so on a cooperative basis; In many communities, cooperative stores compete with private stores by selling farm produce.
The Populist Party united the Grangers and many other largely rural groups into a powerful political protest movement that brought attention to some of the injustices in the United States. Populists reached their peak of influence in the 1892 presidential election campaign, winning about eight percent of the popular vote. Populist goals such as free silver coinage (to attract more money into the economy) became the subject of national debate and became part of the Democratic Party platform for the 1896 elections. Although Democrats lost that time, farmers and their allies pushed their concerns to the top of the political agenda. Farmers proved to be a sufficiently powerful social force to win the respect of political leaders, who henceforth invariably paid close attention to their problems.
THE GROWING ROLE OF GOVERNMENT
Farmers campaigned for a wide variety of government programs, although they often disagreed about which programs to support. The first farmers to settle on the western frontier, for example, supported a federal program to build roads to make it easier to get goods to market. They also supported other domestic development programs, the construction of canals, river dredging and, subsequently, land subsidies to railway companies. Land policy reflected profound differences in the views of farmers living in the frontier regions and those who inhabited the settled old areas of the country. Borderland farmers wanted cheap or even free land so they could expand their land. Farmers in settled areas preferred the already established order of things; the expansion of agricultural land was fraught with oversaturation of the market, which threatened to fall prices and losses.
Until the 1960s, there were almost no federal programs that directly impacted farmers. Agricultural policy issues were in charge of the head of the patent bureau, which was engaged in collecting statistical data on agriculture and conducting a number of experiments in the field of farming. farm, which were of a limited nature. But in 1862, Congress created the Department of Agriculture, giving its secretary cabinet status in 1889 (that is, making him one of the “secretaries to the immediate advisers and staff of the President”). Since then, the federal government has been directly involved in the formation and implementation of agricultural policy.
Initially, the Ministry of Agriculture had almost no direct contact with farmers, being mostly involved in organizing research and collecting statistical data. After 1900, Congress gave the department other responsibilities, including protecting forests and enforcing food standards.
A few weeks after the establishment of the Department of Agriculture, Congress passed the historic Morrill Act, which allocated thousands of acres of federal land to each state government for the establishment of a system of agricultural and technical colleges. In subsequent years, state governments established 69 such educational institutions, called land grant colleges. These colleges played a key role in developing agricultural research and training generations of farmers.
Around 1900, agricultural leaders expressed concerns that the results of agricultural research conducted by government agencies were not being shared with farmers and were not being put into practice. Many farmers were skeptical about the recommendations of government consultants and continued to proudly follow the traditions of their fathers and grandfathers, rejecting newfangled ideas such as crop rotation and grain selection. To promote the merits of new farming methods, government departments have created several demonstration farms. They teamed up with local business and farmer groups and hired extension workers to travel from farm to farm explaining and demonstrating new techniques that could increase farmers' productivity and income. In 1914, Congress elevated these activities to the level of federal programs by establishing the Agricultural Service. This service, jointly funded by the federal government and the land colleges of each state, created a network of permanent representatives who opened offices in each district to provide advisory assistance to farmers and their families.
The Extension Service was born during a period of prosperity for American farming. Prices for agricultural products rose sharply between 1900 and 1914, and with the outbreak of the First World War, which created an acute demand for food, they increased even more. American farmers, located far from the battlefields and having relatively wide access to labor-saving equipment, had no difficulty in increasing production volumes. From 1914 to 1918, prices for agricultural products doubled and continued to rise through 1920.
However, this period of great prosperity ended, and American farmers entered a period of new crisis. In the 1920s, prices began to fall, and even worse times lay ahead. In 1932, the average price level for agricultural products fell to less than one-third of the 1920 level. Thousands of farmers found themselves unable to pay their mortgages, and their lands were taken over by banks or other lenders. Farmers were not alone in their misfortunes. The storms of the Great Depression of the 1930s rocked world economy, throwing thousands of workers and employees into the streets and posing urgent political and economic tasks to the country's leadership.
The government's response to the Great Depression ushered in a new era in American agriculture. Much of today's agricultural policy has its roots in that desperate decade of the 1930s, in the programs put forward by President Franklin Delano Roosevelt, who served in office from 1933 until his death in 1945. These programs were integral part the policy that Roosevelt called the New Deal for the American people.
AGRICULTURAL POLICY TODAY
The agricultural policy of the United States government is determined by a whole system of legislative acts. Every four years, Congress debates and passes a major Farm Bill. In addition, many aspects of agricultural policy are formed as a by-product of legislation regulating other areas of activity. Tax laws, for example, help attract funds from private investors in the development of certain areas of agriculture.
Limitation of land. Based on the theory that overproduction is the main reason for lower agricultural prices, the government is encouraging farmers to limit the amount of land they cultivate. This approach was introduced with the passage of the Agricultural Adjustment Act of 1933, one of the key pieces of legislation of the New Deal, which provided special subsidies to farmers who agreed to conserve part of their land.
Ensuring price levels. Certain essential goods are subject to the practice of ensuring stable prices through government subsidies. Here's an example of how such a system works: Congress sets a price of, say, $2.55 per bushel of corn (one bushel is 35.2 liters) to indicate the expected value of the crop. Corn growers who agree to limit planting can borrow $2.55 for each bushel of corn they turn over to the government. They practically pledge their harvest to the government for the loan they provide. If corn rises in price above $2.55, farmers can reclaim their crop, sell it on the open market, and pay off the loan. The proceeds above the loan amount go to the farmers. If corn prices remain below $2.55, farmers can default on their loan without penalty. The government merely takes ownership of the corn crop and either puts it in storage or sells it at a loss. There are no upper limits on the amount of subsidies paid to stabilize prices.
Compensation payments. Even more important than stabilizing loan prices are compensation payments, which are a form of direct contribution to increasing farmers' incomes. Congress sets target prices for various crops. Again, to receive benefits, farmers must withdraw part of their land from land use. If the market price farmers receive for their crops is lower than the target price, the government makes up the difference. Compensation amounts are limited to $50,000 per year.
The policy of ensuring price levels and compensation payments applies only to such basic goods as grains, meat and dairy products and cotton. The production of many other products is not subject to government subsidies. Despite the temptation of $20 billion in subsidies (approved in one recent year), many farmers chose not to turn to the government for help. Only one farm in five uses the subsidies provided.
Market quotas. A number of direct restrictions are imposed on trade in a number of crops, including oranges and lemons. So-called market quotas limit the amount of a given crop that can be supplied to the market from week to week. By limiting sales, these quotas are designed to increase purchasing prices for farmers. Quotas are introduced by decision of producer committees of a given state or region. Market rules are put into effect by voting on proposals made by those farmers who are directly affected by them, and gain legal force after they are approved by the Minister of Agriculture. A farmer who continues to ignore these regulations risks prosecution.
Farm lending. Farmers have always considered access to loans and credit to be the root problem of their activities. As early as 1916, the federal government began promoting private cooperative farm lending programs. New Deal legislation, particularly the Farm Credit Act of 1933, increased the government's role in this area. Today, the farmer has wide access to a developed network of credit from private, cooperative and public financial sources. One of the most important components of this network is the Federal Farm Lending System, consisting of three groups of banks, each of which is endowed with specific functions: lending for the purchase of real estate, lending for the purchase of agricultural implements and seed funds, and lending to cooperatives. The country is divided into twelve zones, in each of which there are three federal banks, one for lending to each of the above areas of activity. Banks finance their operations by issuing and selling securities to investors, just like business corporations. Since banks traditionally lend money at a high interest rate, they can borrow at a low rate, which reduces the cost of lending to farms. Another source of credit for farmers is the Local Farm Bureau, a sort of last resort for credit when they have nowhere else to go.
Soil conservation. A number of federal programs are designed exclusively to stimulate soil conservation. Under one such program, for example, the government bears part of the cost of planting used land with grasses or legumes to reduce the risk of soil erosion.
Irrigation and water supply. A federal system of dams and irrigation canals provides subsidized water supplies to farmers in 16 Western states. Subsidized irrigation supports the production of 18 percent of the country's total cotton crop, 14 percent of barley, 12 percent of rice and 3 percent of wheat.
Broad government agricultural programs have built a strong base of support for farmers over the years. Congressmen and senators representing agricultural states are constantly seeking Senate approval of program after program designed to meet the diverse interests of farmers. But these programs are also subject to considerable attacks. Partly because, as their opponents argue, different programs often contradict each other. For example, they say, the government pays some farmers to exclude some areas of land from production while giving them tax breaks for plowing and cultivating others.
A number of legislators and Presidents have called on Congress to weaken the government's role in agriculture, gradually reducing subsidies, ultimately eliminating government programs purchases of surplus crops and direct lending to farmers. It has been argued that such programs represent unacceptable government intervention in free market practices. However, many aspects of current agricultural policy are protected by powerful economic interests, and proposals to change the system are generating intense debate in Congress.
AGRICULTURE USA TODAY
As the 20th century draws to a close, Americans are reflecting on the successes and shortcomings of their agriculture. There is much to be proud of, but much also raises painful questions.
The successes are obvious and many farmers are not averse to boasting about them. Posters along highways in some parts of the Midwest remind travelers: “One farmer feeds 75 people. Thanks to nature's bounty and skillful use of machinery, fertilizers and chemicals, the American farmer is virtually unrivaled in producing abundant and cheap produce. The United States accounts for half of the world's production of soybeans and corn and 10 to 25 percent of cotton, wheat, tobacco and vegetable oils.
By all measures, United States agriculture is big business. There is even a special term “agribusiness” that reflects the gigantic weight of agricultural production in the American economy. This term refers to the entire agro-industrial complex, from the individual farmer to the multinational chemical manufacturing concern. Agribusiness includes farmer cooperatives, rural banks, agricultural transporters, consumer goods retailers, agricultural equipment manufacturers, food processing industries, grocery store chains, and many other businesses.
Both domestic and foreign consumers benefit from the low cost of production from the American farmer. For Americans, food costs much less than for residents of many other developed countries. Moreover, one third of the United States' acreage is sown specifically for export to Europe, Asia, Africa, and Latin America. In 1981, agricultural exports reached $43.3 million. Imports of agricultural products are much smaller, which creates a corresponding advantage in this area of \u200b\u200btrade.
The standard of living of American farmers is generally very high. The income of a farm family is on average three-quarters of that of an urban family, but since farmers have lower household expenses, their standard of living is close to the national average. Life on a farm once meant isolation from modern conveniences, but that is no longer the case.
One of the strengths of American agriculture has always been the farmer's receptiveness to new technology. Computers are just the latest link in a long chain of inventions that have helped farmers increase productivity and reduce production costs. However, farmers are as much traditionalists as they are innovators. They are characterized by deep conservatism and respect for tradition, thanks to which rural communities maintain stability in times of rapid change.
However, in addition to its bright sides, American agriculture also has its dark sides. American farmers have experienced periods of recession and prosperity, and some farming practices have raised concerns about the environment and other issues.
A surplus of agricultural products and low prices make it difficult for many farmers to earn an income. The cost of the equipment, fertilizers, and pesticides they purchase is growing faster than the revenue from the products. High bank interest rates on loans also add to their worries.
At the turn of the 1980s, a period of economic difficulties began. Agricultural exports declined in part because of the high value of the American dollar (which inflated the cost of American goods to foreign buyers). Grain prices fell and interest rates on loans rose. Many farmers found themselves unable to pay off mortgages and loans made earlier when prices (and incomes) were higher. As in the 1930s, a significant number of farms and equipment were auctioned off to pay off the debts of their former owners. In dozens of farming communities, the crisis has led to the closure of banks, farmer cooperatives, small enterprises. A number of government and private programs emerged to help farmers, but many wondered if the good times were coming to an end.
Some observers have suggested that the small family farm is no longer viable in the United States. Farm-incapable in the United States. Farms are becoming larger and larger, but the number of people working on them is decreasing. The outflow of population from rural areas contributed to the growth of unemployment and social problems in cities. Today, only 2.4 million people are farmers (out of a total US population of 230 million).
In fact, one third of them, or even more, are only partly farmers, since they combine farming with other, non-agricultural activities, trying to extract additional income. Meanwhile, more farms are being taken over by corporations, from small family-run farms to giant conglomerates. About one-fifth of all farm income comes from corporations.
Advocates for the family farm deplore the trend toward farm consolidation and corporate takeovers. In their opinion, corporations care only about the “bottom line” (that is, net income) and are more willing than family farms to resort to methods that are harmful to the environment. Owners of family farms, they believe, have a greater sense of respect for the land and responsibility for its conservation than corporations. But corporations also have their defenders, who point out that corporations tend to have more capital than family farms and are therefore able to implement environmental measures that pay dividends only in the distant future.
Both family farms and corporations have come under fire for environmental damage. Since the 1940s, the use of artificial fertilizers and chemicals to control weeds, pests and plant diseases has increased exponentially in American agriculture. While proving to be an indispensable aid in increasing yields, these funds also gave rise to many problems. Precipitation, spreading and seeping through the top layers of soil, carried fertilizers into groundwater, rivers and lakes, degrading water quality and stimulating the growth of undesirable aquatic plants. Toxic chemicals, including carcinogenic ones and those fraught with other diseases, have at times entered the country's air, water and food resources. They also caused direct harm to the health of farmers and their workers, although chemical manufacturers claim that their products are safe if used strictly according to instructions. Over the years, many species of agricultural pests have developed immunity to relatively mild chemicals, forcing farmers to resort to stronger, more expensive chemicals.
LOOKING TO THE FUTURE
When thinking about the future, the only thing the American farmer can be sure of is that even greater changes lie ahead. Exciting research and development programs currently underway in government, academic and private laboratories promise to continue the trends that have emerged in recent years.
Many innovations are being considered. For example, the “no-moldboard method”, in which the seeds of a new crop are planted directly into the stubble of the harvested crop, without turning over the layers of soil with a plow. The no-moldboard method is largely based on the use of chemical weed control agents and therefore causes criticism. Nevertheless, it makes it possible to reduce soil erosion and reduce labor and fuel costs, which is why many farmers willingly resort to it.
Some other innovations are born of biotechnology, that is, the practical application of the achievements of biological science. A number of companies are actively leading the use of genetic engineering methods, breeding new species of plants and animals with specified characteristics. In the future, will we see new, more resilient and productive plant varieties that require less fertilizer and have increased resistance to disease and pests? Biotechnologists hope so. Among other things, they predict, the fruits of their labors will allow farmers to reduce their dependence on toxic chemicals, thereby helping to maintain a healthier environment for everyone.
It is perhaps more difficult to predict possible social and demographic changes. Is the family farm doomed, as some fear? Or a new migration of townspeople to countryside will it bring with it a new boost of vitality to the agricultural sector? A likely clue is that the number of small farms has actually increased in recent years, while the long-standing trend of rural population decline has not only reversed but also reversed. (The number of small and large farms is growing, while the number of medium-sized ones is decreasing.)
While it has embraced innovation and evolved over time, agriculture remains the foundation of America's wealth and prosperity. This connection between past, present and future is fundamental to the American way of life.
What prevents American farmers from developing their farms? Everything is the same as ours - bureaucracy, zero support at the state level and among many compatriots, small profits. A girl volunteer from Lavka, who helped on a farm in the USA for a month, shares her experience.
For example, Shannon Farm, Virginia, gives an idea of how most American farmers live. Shannon Farm is a community of like-minded people that originated in the 70s of the last century. Hippie rebels bought 500 acres of land and built hostels on it.
Over time, the spirit of socialism has disappeared, separate families live in separate houses, but residents are still ready to defend their interests.
Today, the majority of Shannon Farm residents are farmers with their own vegetable gardens and orchards. And only Virginia, one of the first settlers, has its own herd of 18 cows. But almost everyone from the community earns money from local companies. You can’t live without this and you can’t sustain farming.
Farm
The farm uses a rotational pasture system to raise cows. This is not the most popular practice in the United States. But for organic meat it is good decision. The community has allocated several fields for grazing, on each of which the herd grazes for about 7 days. The climate allows grazing all year round; only in winter are supplements used in the form of hay and alfalfa.
Unlike cows raised on corn, the meat of such animals is dark, aromatic and rich.
Organic
In the United States, legislation defines the substances that are allowed when growing food, as well as the conditions for keeping and feeding livestock if a farmer wants his products to be labeled as “organic.”
But the laws are flexible and their provisions can be interpreted quite freely, which is what huge corporations take advantage of. Therefore, organic chickens, which “must have access to open space and pasture,” can live at 20,000. in ordinary hangars, but with a corny open door!
Ideological American farmers strive not only to comply with the laws, but also to grow everything in conditions as close as possible to natural ones.
Thus, cows do not become plump from harmful GMO feed, but graze on rotational fields, fertilizing the pastures. Vegetables grow without “chemicals”, the weight of the fertilizer is organic.
Life
Small farmers sell their produce to local people at small fairs and markets. Only a few manage to achieve high profits and large scale.
The book “Gaining Ground” was written about this experience – the entry of family farming into the “big game”. Author Forrest Pritchard talks about his life - honestly and without embellishment. It's worth reading to get an idea of the challenges (financial and administrative) under which American farmers survive.
It is almost impossible to compete with huge agricultural enterprises here. Farmers can make a profit only by constantly searching for a market, having their own narrow focus and engaging in organic production. Farmers practically cannot get into chain stores in big cities. But Pritchard shares his secret to profit - he is responsible for the business of his father and grandfather, so he has found a way to get into the hearts of the people of Washington, where he sells his products.
Economy
Virginia of Shannon Farm raises castrated bulls and cows with calves. 2-3 bulls are slaughtered per year, the animals are killed and butchered on a neighboring farm, and Virginia receives packaged parts, ready for sale. The butcher takes the skin, head and limbs for himself, the owner of the herd sells to regular customers one quarter of each type of meat (tenderloin, steak, minced meat, etc.)
Before processing, the bull weighs about 550 kg, after - 300 kg. Even less product gets sold, because... fat and bones are removed.
In stores, organic meat costs $6-30 per pound, regular meat costs $3-18.
But if a farmer sells meat at retail to “his own,” then the price ranges from $5 to $24 per half kilo, depending on the type of meat.
Profit per animal per year is $2000-2400.
About expenses
For grazing, electric shepherds are used - fences made of plastic posts around the field, through which a weak current is supplied. Around one pasture there are 100 pieces. pillars, costing $2 each. These columns are updated regularly.
Metal pens cost $1,000.
Additionally – costs for complementary feeding and veterinary services.
The costs of running their own farm (Virginia has been producing organic meat for 9 years) have still not paid off, despite regular customers and stable sales.
Volunteering
Often, farmers, after growing up in vegetable gardens, refuse to help their parents, leaving for. It would be very difficult on farms without the help of volunteers. And therefore, farmers have a philosophical attitude towards all “side-supporting” helpers.
Farmers are visited by those who are interested in the agricultural sector, want to learn new practices, and go about their business. There are a considerable number of Internet resources where farmers can find their helpers, both volunteers and temporary workers.
Approach to life
Virginia, like other residents of Shannon Farm, is very responsible in matters of nutrition and consumption. Residents buy used clothes, equipment, cars, sort waste, make compost, and try to eat only living, natural food, preferably home-produced.
Shannon Farm Community
The views of the community's early hippie settlers were romanticized. But Shannon Farm residents are confident that their community can be considered a success. Everyone has their own comfortable home, everyone is allocated a plot of land, everyone is free to do whatever they want. But in their opinion, this success will last another 2 decades, because... young people have almost completely abandoned Shannon Farm. There are only three young guys left who support the core of the founders.
In some ways this is a problem for the old-timers. As they age, they are increasingly concerned about the issue of safety in a variety of aspects, so the youthful energy, overflowing, scares them away and makes them wary. And this is felt by the children of settlers and those who come to the community from outside. Due to such pressure and lack of shared views, the farm will cease to exist.
In addition, farmers in communities remote from the city are finding it difficult to survive due to global changes - for example, a huge gas pipeline is being built in these parts, which poses an environmental threat, and which too few local activists oppose. Farmers often lack public support to preserve the ecology of their territory.
Since the country's earliest days, agriculture has occupied a key place in the American economy and culture. Of course, farmers play an important role in any society because they feed the people. But in the United States, agriculture was especially highly valued. At the very beginning of its existence, the country saw in farmers an example of economic virtues - hard work, initiative, independence. In addition, many Americans—especially immigrants who may never have owned land or the products of their labor—realized that owning a farm was their ticket to the American economic system. Even people who left agriculture often used land as a commodity that could be easily bought and sold, which opened a new path to enrichment.
The American farmer has generally been quite successful in producing food. Sometimes a farmer's success gave rise to his main problem: the agricultural sector periodically suffered from overproduction, which drove down prices. For a long time, the government mitigated the worst of these crises. But such assistance has declined in recent years as the government seeks to reduce its own spending and the agricultural sector's declining political influence.
American farmers are able to harvest large crops due to several factors. For example, they work in extremely favorable natural conditions. The soils of the American Midwest are among the most fertile in the world. Rainfall across most of the country is moderate to heavy; in the absence of precipitation, rivers and groundwater provide large-scale irrigation.
Large capital investments and the increasing use of skilled labor also contributed to the success of American agriculture. Today's farmer can be seen operating a tractor with an air-conditioned cab and very expensive high-speed plows, cultivators and headers. Biotechnology has made it possible to create seeds that are not afraid of diseases and drought. Fertilizers and pesticides are widely used (even too widely, according to some environmentalists). Farming activities are monitored by computers, and computers are used to determine the best places to plant crops and fertilize the soil. space technology. In addition, researchers periodically propose new food products and new methods of creating them - for example, artificial ponds for breeding fish.
However, farmers failed to overcome some basic laws of nature. They still have to deal with forces beyond their control - most notably weather conditions. Despite its generally favorable climate, North America also suffers from frequent floods and droughts. Weather changes give rise to their own economic cycles in agriculture, often unrelated to the general economy.
Calls for government assistance arise when certain factors hinder farmers' success; At times when a combination of factors brings farms to the brink of ruin, cries for help are especially loud. For example, in the 1930s, a combination of overproduction, bad weather, and the Great Depression created what many American farmers thought was an insurmountable crisis. The government responded with sweeping agricultural reforms, most notably the creation of a price support system. This unprecedented large-scale intervention continued until the late 1990s, when Congress eliminated many of the support programs.
The US agricultural economy continued to boom through the late 1990s, followed by a two-year decline in 1996 and 1997. But this was a completely different agricultural economy from the one that existed at the beginning of the century.
Agricultural policy at the initial stage
During the colonial period of American history, the British crown cut up land into large pieces that were donated to private companies and individuals. These recipients divided the land further and sold it to others. With independence from England in 1783, America's Founding Fathers felt the need to develop a new system for land distribution. They agreed that all unsettled land would be administered by the federal government, which could sell it for $2.50 per acre ($6.25 per hectare).
Many of the people who braved the dangers and hardships of settling these new lands were poor, and they often settled as squatters without clear rights to their farms. Throughout the country's first century, many Americans believed that land should be given free to settlers if they intended to stay and farm it. This was finally formalized by the Homestead Act of 1862, which opened vast tracts of Western lands to free settlement. Another law passed that same year set aside a portion of federal land to generate the revenue needed to build so-called "grant land colleges" in various states. The creation of public colleges and universities under the Morrill Act opened up new opportunities for education and training in so-called practical skills, including farming.
Mass Ownership individuals small farms were not a feature of the South as they were in the rest of the United States. Before the Civil War (1861-1865), large plantations covering hundreds if not thousands of hectares were established for large-scale production of tobacco, rice, and cotton. These farms were tightly controlled by a small number of wealthy families. Most farm workers were slaves. With the abolition of slavery after the Civil War, many former slaves remained on these lands as tenants (called sharecroppers) under an agreement with their former masters.
Providing sufficient food supplies for workers in mills, factories, and workshops was critical during America's early industrialization. The emerging system of waterways and railways made it possible to transport agricultural goods over long distances. New inventions such as the steel plow (essential for breaking up the hard soil of the Midwest), the reaper (a machine for harvesting grain), and the combine (a machine that cuts, threshes, and cleans grain) allowed farmers to increase their productivity. Many of the workers in the country's new mills and factories were the sons and daughters of farmers whose labor was no longer needed on the farms as a result of these inventions. By 1860, 2 million American farms provided an abundance of goods. Indeed, in 1860, agricultural products accounted for 82 percent of the country's total exports. Agriculture literally and figuratively nourished economic development America.
As the U.S. agricultural economy developed, farmers became more aware of the fact that government policies affected their incomes. The first group to defend the interests of farmers, the Grange, was formed in 1867. The movement spread quickly, and similar groups emerged - for example, the Farmers' Union and the Populist Party. These groups condemned railroad companies for the high cost of transportation, wholesalers for profiting from what farmers considered fraudulent intermediaries, and banks for stingy lending practices. Farmers' political activism has produced some results. Railways and the elevators were under state control, hundreds of cooperatives and banks were created. However, when farm groups wanted to shape the nation's politics and to that end supported the acclaimed orator and Democrat William Jennings Bryan, who ran for president in 1896, their candidate was defeated. Townspeople and business interests on the East Coast viewed farmers' demands with distrust, fearing that calls for easy credit would lead to crippling inflation.
Agricultural policy in the 20th century
Despite the instability of the political fortunes of farm groups in the late 19th century, the first two decades of the 20th century turned out to be a period of prosperity for American agriculture. Prices for agricultural products were high due to increased demand, and the cost of land rose. Technological progress continued to improve productivity. The USDA created demonstration farms to demonstrate how new technology could increase yields; In 1914, Congress established the Agricultural Extension Service, whose numerous representatives advised farmers and their families on everything from the use of fertilizers to setting up a home sewing industry. The Department of Agriculture conducted new research trying to develop pigs that required less grain to fatten faster, inventing fertilizers that increased grain yields, hybrid seeds that produced healthier plants, chemicals to prevent disease and treat plants and animals, and various methods extermination of agricultural pests.
The prosperous years of the early 20th century ended with falling prices after the First World War. Farmers again turned to the federal government for help. However, their complaints fell on deaf ears because the rest of the country - especially the urban areas - was enjoying a period of prosperity in the 1920s. This period was even more difficult for farmers than previous crises because farmers lost their self-sufficiency. They had to pay cash for machinery, grain, fertilizer, and consumer goods in the face of a sharp decline in income.
However, the farmers' misfortune was soon shared by the entire country, which, after the stock market crash in 1929, fell into a state of depression. For farmers, this economic crisis has exacerbated the problems caused by overproduction. The agricultural sector was then hit by unfavorable weather, which exposed poor farming practices. Constant winds during a long drought blew away topsoil from large areas of once fertile land. The term “dust storm zone” arose to describe this dangerous phenomenon.
Large-scale government intervention in agricultural economics began in 1929, when President Herbert Hoover (1929-1933) created the Federal Farm Administration. Although this office could not solve the growing problems created by the Depression, its establishment reflected the government's strong desire to provide stability for farmers and set a precedent for government regulation of agricultural markets.
After taking office in 1933, President Franklin D. Roosevelt expanded the nation's agricultural policies far beyond Hoover's initiative. Roosevelt proposed laws subsequently passed by Congress that were designed to raise the price of agricultural products by limiting production. The government also adopted a price support system that guaranteed farmers "fair" prices, approximately the same as those prevailing during favorable market periods. The state agreed to buy up excess production in years of overproduction, when crop prices fall below “fair” prices.
Other New Deal initiatives also helped farmers. Congress created the Rural Electrification Administration. The government helped build and maintain a network of roads between farms and markets, making cities more accessible. Soil conservation programs emphasized the need for efficient land use.
Towards the end of World War II, the agricultural economy again faced the problem of overproduction. Technological innovations, such as the introduction of gasoline and electrical equipment, as well as the widespread use of pesticides and chemical fertilizers, increased the yield per hectare to unprecedented levels. To absorb crop surpluses that were driving down prices and taxpayer income, Congress created the Food for Peace program in 1954 to export American agricultural products to countries in need. The strategy's planners believed that food supplies could contribute to the economic growth of developing countries. Humanitarians saw this program as a way for America to share its abundance.
In the 60s, the government decided to use surplus food to feed its poor. During President Lyndon Johnson's "War on Poverty," the government launched the federal Food Stamp program, providing food stamps to the poor that were accepted as currency at grocery stores. Other programs followed, using surplus goods to provide school meals for children in need, for example. These food programs helped provide a safety net for agricultural subsidies to cities for many years and remain an important form of social security for the poor and, in a sense, for the farmers themselves.
But as agricultural production increased in the 50s, 60s and 70s, the cost of government price support systems increased significantly. Politicians from non-farm states expressed doubts about the advisability of stimulating production more agricultural products than was needed - especially when surpluses caused prices to fall and, accordingly, increased the need for government assistance.
The state tried a new line of behavior. In 1973, American farmers began receiving assistance in the form of a federal “deficiency payment,” which was supposed to work as a fair price system. To receive these payments, farmers were required to refrain from using some of their land, thereby increasing market prices. A new compensation program introduced in the early 1980s to reduce costly government stocks of grain, rice and cotton and strengthen market prices put approximately 25 percent of arable land out of use.
Price supports and deficit payments were applied only to a few major products - for example, grains, rice and cotton. Many other producers did not receive subsidies. The marketing of some crops, such as lemons and oranges, was subject to explicit market restrictions. Under so-called market limits, the amount of crop that a producer could sell unprocessed was limited on a weekly basis. These restrictive sales limits were intended to increase farmers' prices and incomes.
80s and 90s
By the 1980s, the annual cost to the government (and by extension taxpayers) of these programs sometimes exceeded $20 billion. Outside of farming areas, many voters decried the spending and expressed concern that the government was effectively paying farmers to REFUSE farming. Congress felt the need for a new change of course.
In 1985, when President Ronald Reagan called for overall government reduction, Congress passed new law on Agriculture, designed to reduce farmers' dependence on government assistance and improve the international competitiveness of American agricultural products.
The law reduced price supports and took 16 to 18 million hectares of environmentally sensitive cropland out of use for 10 to 15 years. Although the 1985 law changed the structure of government aid to farmers in very modest ways, the improving economy contributed to the overall decline in subsidies.
However, since in the late 80s there was a shortage federal budget bloated, Congress continued to look for ways to reduce federal spending. In 1990, he passed legislation that encouraged the cultivation of crops not traditionally supported by deficit payments and also reduced the amount of land counted toward deficit payments to farmers. This new law maintained high and stable prices for some goods and extensive government regulation of some agricultural products.
This situation changed significantly in 1996. The new Republican Congress elected in 1994 sought to wean farmers away from reliance on government assistance. The Freedom to Farm Act eliminated the most expensive price and income support programs and allowed farmers to produce food for global markets without restrictions on how much they could plant. According to this law, farmers were to receive subsidies independent of market prices. This law also phased out price support for dairy products.
These changes—a dramatic departure from New Deal policies—were not easy. Congress sought to ease the transition by providing farmers with $36 billion in payments spread over seven years, even with high crop prices during that time. Price support for peanuts and sugar remained the same, and even increased for soybeans, cotton and rice. Market limits for oranges and some other crops changed little. Even after these political concessions, it was an open question how long this less controlled system would last. According to the new law, in 2002 it will be restored old system support unless Congress passes legislation to separate market prices and support payments.
New problems emerged by 1998, when demand for American agricultural products fell in important parts of Asia, which suffered financially; exports of agricultural products fell sharply, prices for crops and large cattle fell. Despite low prices, farmers continued to try to increase their incomes by increasing production. In 1998 and 1999, Congress passed bailout laws that temporarily increased farm subsidies that the 1996 law tried to eliminate. The 1999 grant of $22.5 billion was a new record.
Agricultural Policy and World Trade
During the 1980s and 1990s, the growing interdependence of world markets spurred attempts by world leaders to introduce a more systematic approach to regulating international trade in agricultural products.
Almost every country with an agricultural production provides some form of government support to farmers. In the late 1970s and early 1980s, as differences between global agricultural markets increased, most countries with significant agricultural sectors created new programs or strengthened old ones to protect their own farmers from what was often perceived as foreign disruption. These programs contributed to the narrowing international markets agricultural products, falling international prices and growing surpluses of agricultural products in exporting countries.
In a narrow context, it is understandable why a country might try to solve the problem of overproduction of agricultural products by freely exporting its surplus while limiting imports. However, in practice such a strategy turns out to be impossible; other countries are, of course, reluctant to allow imports from countries that do not themselves open their markets.
By the mid-1980s, governments began working to reduce subsidies and allow freer trade in agricultural products. In July 1986, the United States announced a new plan to reform international agricultural trade at the Uruguay Round of multilateral trade negotiations. The United States has called on more than 90 member countries of the world's largest trade body, the General Agreement on Tariffs and Trade (GATT), to negotiate the gradual elimination of all agricultural subsidies and other measures that distort agricultural prices, production and trade. The United States primarily wanted to negotiate the elimination of European agricultural subsidies and Japanese bans on rice imports.
Other countries or groups of countries made various proposals of their own, generally agreeing with the idea of eliminating trade-distorting subsidies and moving toward freer markets. But as with earlier attempts at international agreements to cut agricultural subsidies, it initially proved very difficult to achieve any agreement. Nevertheless, in 1991, the heads of large Western industrial countries returned to discussing an agreement to reduce subsidies and transition to a freer market. The Uruguay Round was completed in 1995, with participants committing to reduce their agricultural and export subsidies, as well as making some other changes to move towards freer trade (for example, converting import quotas into duties that can be more easily reduced). They also returned to this issue in a new round of negotiations (at a ministerial meeting held in late 1999 in Seattle by the Organization for International Trade). Although these negotiations were intended to eliminate export subsidies entirely, delegates did not agree to go that far. Meanwhile, the European Union cut export subsidies and trade tensions eased by the late 1990s.
However, disputes over trade in agricultural products continued. From the American point of view, the European Union has not kept its promises to reduce agricultural subsidies. The United States has won favorable rulings from the Organization for International Trade, which replaced the General Agreement on Tariffs and Trade (GATT) in 1995, on several of its complaints about ongoing European subsidies, but the EU has refused to recognize them. Meanwhile, European countries erected barriers to American food produced using artificial hormones or genetic modifications - a major problem for American agriculture.
In early 1999, US Vice President Al Gore again called for significant reductions in agricultural subsidies and tariffs worldwide. Resistance to these proposals was expected from European countries and Japan, as was the case during the Uruguay Round. However, efforts to move toward freer international trade in agricultural products faced additional obstacles as exports declined in the late 1990s.
Agriculture as big business
American farmers have come to XXI century partly with the same problems they faced in the 20th century. The most important of them remains overproduction. Since the country's inception, continuous improvements in agricultural machinery, seeds, fertilizers, irrigation, and pest control have increased farmers' efficiency (but not their income). And if farmers approved of the idea of reducing the total amount of agricultural products produced to support prices, then they refused to reduce their own production.
Just like industrial enterprise can achieve higher profits by increasing its size and production efficiency, many American farms have become larger and larger and have also consolidated their operations to increase efficiency. In fact, American agriculture has become an agribusiness, a term that reflects the large-scale, corporate nature of many agricultural enterprises in the modern US economy. The agribusiness industry includes a variety of farming companies and structures, from small family-owned companies to huge conglomerates or international companies that own large tracts of land or produce products and materials used by farmers.
The emergence of the agricultural industry at the end of the 20th century meant a simultaneous decrease in the number of farms and an increase in their size. These agricultural companies, sometimes owned by absentee shareholders, use more equipment and fewer workers. In 1940, there were 6 million farms with an average area of 67 hectares. By the end of the 1990s, there were only about 2.2 million farms with an average area of 190 hectares. Around the same period, agricultural employment fell sharply - from 12.5 million in 1930 to 1.2 million in the 1990s - even as the total population more than doubled. In 1900, farmers made up half of the workforce, but by the end of the century only 2 percent worked on farms. And about 60 percent of the remaining farmers at the end of the century worked on their farms only part of the time; they also had other non-farm jobs to supplement their farm income. The high cost of capital investment - in land and equipment - makes starting a full-time farm extremely difficult for most people.
As these numbers show, the American "family farm" - rooted in the nation's history and celebrated in the myth of the hardworking farmer - is facing serious economic challenges. City and suburban residents continue to admire the neat barns and carefully cultivated plots that are a familiar part of the rural landscape, but it remains unclear whether they will be willing to pay more to preserve family farms. high prices for food or government subsidies.
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