THE GREAT DEPRESSION AND RURAL AREAS
Unlike urban areas, many of which witnessed fantastic growth in the 1920s, rural areas in the United States experienced economic crisis long before the onset of the Great Depression. World War I created extremely beneficial conditions for farmers and, consequently, easier times for often struggling rural workers. Because of the war effort, agricultural production and prices were record high. The demand and resulting prosperity encouraged bigger farms to invest in the most recent technological advances. Farmers were not afraid to take loans to purchase newly introduced equipment (e.g. plows) that made production easier and more efficient. However, in the aftermath of WWI, the agricultural sector began collapsing under the weight of its own success. The production remained at the same level but the demand was no longer driven by the war effort. With abundant product on the market, prices plummeted. While these changes benefited urban residents (cheaper food), particularly smaller farmers struggled to make any profit. Limited or no profit contributed in turn to even more debt. Simultaneously, the extreme production of the war and post-war years had a devastating impact on the soil. With lower prices, farmers produced even more of whatever had the highest potential to generate profit. Crop rotation, fertilization, and conservation efforts were so modest at the times of intense production process that the soil was simply exhausted. In the early 1930s, drought, particularly devastating in the Great Plains, produced even more extreme challenges. Although by 1930, more than a half of Americans already lived in cities, nearly 44% still resided in rural areas. When Franklin Delano Roosevelt took over the office in March 1933, he and his administration recognized that the economy could not recover without efforts targeted at the agricultural sector. Never before did rural areas witness as comprehensive reform programs as during the New Deal.
AGRICULTURAL ADJUSTMENT ACTS (1933 and 1938)
One of the main goals of Roosevelt's administration was to control (lower) agricultural production and increase prices. The legislation that aimed to achieve this goal was the 1933 Agricultural Adjustment Act (AAA), one of the New Deal's flagship but also most controversial programs. AAA offered landowners "acreage reduction" contracts, in which farmers agreed not to grow certain crops on a portion of their land. In return, they received compensation for what they would have usually gotten from those acres. The money for the subsidies were to be generated from tax imposed on companies that processed farm products. However, in 1936, the Supreme Court declared the 1933 AAA unconstitutional (the tax levied on processors in order to pay subsidies and regulation of agriculture by the federal government were both deemed unconstitutional). In the aftermath of this decision, the Agricultural Adjustment Act of 1938 followed. It revived the provisions of its predecessor but the financing was about to come from the federal government and not from a tax imposed on food processors. The legislation helped the agricultural sector to recover but it produced disproportional benefits for big farms and food processors. Many small landowners and tenants, particularly sharecroppers, were forced to leave rural areas and seek employment in economically struggling cities.
RELIEF AND RECOVERY PROGRAMS THAT BENEFITED RURAL AREAS
- Civilian Conservation Corps (CCC, 1933): A public works program that provided jobs for young, unmarried, unemployed men. The program focused heavily on the conservation effort. Its main outcomes were: reforestation (nearly 3 billion trees planted), creation of more than 800 new parks nationwide and revitalization of most state parks, and building a network of service buildings and public roadways in remote areas. While initially the program was mocked by many politicians, it was one of the most effective and popular efforts of the New Deal.
- Tennessee Valley Authority (1933): A major public work project that aimed to modernize the poor farms in the Tennessee Valley region by providing navigation, flood control, electricity generation, fertilizer manufacturing, and economic development.
- Farm Security Administration (FSA, created originally as the Resettlement Administration in 1935): Aimed to combat poverty in the countryside. Some of the measures employed by FSA were: low interest rates loans for farmers, building cooperative farms where the poorest farmers were resettled in order to farm collectively (the government would also buy the submarginal land from those farmers), and educational aid to rural families.
- Soil Conservation and Domestic Allotment Act (1936): Allowed the government to pay farmers to reduce production in order to conserve soil and prevent erosion.
- Rural Electrification Administration (REA, 1936): Provided low-cost federal loans to cooperative electric power companies in order to bring electricity to isolated rural areas. It is estimated that REA increased the rate of farms with access to electricity from 10% to around 40%.
The vision and outline of New Deal's rural programs have greatly shaped the agricultural sector and later rural reform efforts in the United States.
Department of Agriculture, Forest Service, Civilian Conservation Corps (CCC) Planting Crew, author unknown, 1939.
Original caption: "CCC planting crew planting 2-0 red pine in furrows using Michigan planting bars."