Family Farms Pulled Us Out of the Great Depression

It seems to be a widely held myth that World War II was the main agent for
moving the United States out of the Great Depression of the 1930s.

Cornell University Professor George F. Warren, an important adviser to
Franklin D. Roosevelt on rural development policy, figured out that it is
agriculture that leads countries into and out of depressions. The
Roosevelt Administration is the only administration that tried to do
something about supporting the family farm.

Our recovery started in 1942, the year the Steagall Amendment to the War
Stabilization Act mandated farm parity, but the war got the credit. We
then had ten years of economic stability until 1952 when the Steagall
Amendment was allowed to expire.

In 1952 "export-oriented pricing" replaced the New Deal policy that had
put farm prices in balance, or parity, with other prices. That New Deal
policy worked effectively with farmer-approved "supply management" that
cost far less than today's subsidies to Agri-business.

Farm parity laws that created a fair price floor for all raw materials was
the main agent for moving the United States out of the Great Depression of
the 1930s. This support of prices allowed farmers to afford to stay on the
farm and rebuild the United States economy literally from the ground up.

Basically, parity is a measuring device that puts the value of raw
commodities at a level that equals all the costs, including labor costs
and capital costs.

Parity maintained a level for farm-product prices by governmental support
and intended to give farmers adequate purchasing power. Parity, official
value, or par value, maintained equality between the cost to farmers for
their production and the price they received for their products.

Parity laws guaranteed equality of price, rate of exchange, wages, and
buying power. Farm parity laws made sure that farm income was keeping up
with farm costs.

In 1933 farmers in Nebraska, for example, received almost 43 percent less
than the parity level. This is what crushed family farms, drove people off
the land and extended the Great Depression.

True democracy requires an agriculture of numerous family farms, owned by
farmers rooted in their communities, not by corporate landlords.
Agri-business is the work of corporate landlords.

Our exporting of grain at "globally competitive" prices injures Third
World farmers and results from our failure to keep commodity prices at
parity (balance) with other goods and services. The U.S. farm community
has seen a 50% fall in the number of farmers during a 30-year period of
"export-oriented" agriculture.

The present path is such a narrow, competitive approach to the world that
it misses the possibilities of cooperation and disregards the legitimate
need of other nations for their own markets and their own resources. The
present path is not the path to peace.

Care International, one of the world's major aid agencies, recently
refused $45,000,000.00 of United States aid money. The money the charity
refused is tied to buying the grain from American farmers and shipping it
in American carriers.

Which means that much of the aid 'money' goes back to the United States.

Some food goes to the needy, but the rest is sold cheaply in markets,
undercutting local farmers and giving little incentive for them to grow
more. The combination of wastage and the damage done to the local market
means the aid does more harm than good.

The current system injures family farmers globally.

Our nearly 50-year-old "export-oriented, globally competitive" farm
pricing policy is intended to gain markets by undercutting prices paid to
farmers abroad. This amounts to Welfare For Agri-business.

The theme of "growing the economy" through exports ignores the experience
of farmers. Non-farmers often confuse agriculture and agri-business.

To contend that agriculture has done well even while the number of farmers
has plummeted surely misses essential facts. Those who work in agriculture
speak with credibility about how our pricing policy undercuts both our
farmers and the farmers of hungry nations.

The United State's thirst for foreign markets and resources is due to
overlooking needs and resources of our own people, leading to growing
income dis-parities here. Fair farm parity laws will compensate for this

We can turn around our current situation and avoid a Greater Depression by
raising basic storable commodities back up to 90-100 percent of parity.
Supporting family farms can put the United States back on a secure
economic footing.

Jay Greathouse is Director of Willie Nelson Peace Research Institute founded by Willie Nelson April, 2007.

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