2nd Summary Pages 295-314
Melissa Huston, Troy Rhodes, Chris Slack, Mike Quinton
Farm Fundamentalism – Past and Future
This article talks about how much better it is to be raised on a farm than any other
place. It denotes that the farmer is the key to all economic life in the sense that if there is
no food or production from the farm that all else will fail. Agricultural fundamentalists
insist that there is more to the way of life than just being the key to all economic way of
life. The article claims that individuals raised on a farm are more honest, self-reliant and
reliable. They also have a good work ethic and high moral character. The article talks
about how if we go back that most all men have either been farmers or pastoral people. In
1790 96% of people in the US lived in a rural setting. There were only five cities that had
a population of about 8000.It also tells us that many of the founding fathers of the states
came from a farm background or up bringing. It makes mention of Thomas Jefferson in
particular. It talks of his love for farming and the soil. He eventually came out to say that
manufacturing was right up with farming because of his political status. Back in the
1800’s most the government was made up of farmers. Thus keeping their own interests in
mind. As journalism developed many farm papers and magazines where published.
Before the Civil War it became apparent that farming paid low dividends and many
started to go to the cities to find something that paid more. Today the practice of most
children of farmers is to leave the farm in search for a better life or what the world has
classified as a better life. Many individuals seek money rather than staying to take over
the family farm.
Important Trends
Despite a loss of economic and social prestige before the Civil War, any
challenge to agricultural supremacy in America seemed unrealistic. In 1860 about 80% of
America’s population lived on farms or in villages of less than 2500 people. The value of
land and equipment was about $6 Billion in 1859 compared to less than $2 Billion for all
of the 140 000 manufacturing establishments. From 1860 to 1919, about 400 000 000
acres of land were added to the country’s agricultural domain. The number of farms
increased from 2 000 000 to about 6 000 000. This caused the production of wheat to
jump from 235 000 000 bushels in 1870 to 695 000 000 in 1910. Cotton production also
increased from about 4 000 000 bales to nearly 12 000 000 in this same period. However,
around 1890, agriculture dropped rapidly in economic, political, and social importance.
Historical Views
In the development of agricultural fundamentalism, there have been several opinions
in favour and also against the idea that farmers were apparently “better people” than
others. Abraham Lincoln was one of those against the idea. He felt that in proportion to
the numbers, they were neither better nor worse than other people. In his book called
“History of the Grange Movement,” author Edward W. Martin declared “we cannot
afford to oppress the farming class of this country…it is our chief element of strength and
stability, and a wrong inflicted upon it must react upon the whole nation. If the farmer
suffers, the country at large must suffer with him.” Mary Elizabeth Lease (one of Kansas’
most famous agrarians) believed “the West and South are bound and prostrate before the
manufacturing East.” She also figured that agriculture had its back to the wall.
One of the most American supported views of this topic came from William
Jennings Bryan in his Cross of Gold speech. He stated, “You come to us and tell us that
the great cities are in favour of the gold standard; we reply that the great cities rest upon
our broad and fertile prairies. Burn down your cities and leave our farms, and your cities
will spring up again as if by magic; but destroy our farms and the grass will grow in the
streets of every city in the country.”
Just how much truth there is that these ideas instilled something special into the
American character still remains unknown. However, most American people did accept
these ideas and helped propagate them. This implies that is isn’t necessarily important
what is true in history, but what people think is true.
The Period of World War II
By World War II, the agriculture industry was hit hard. Drought, along with the
deterioration of capital stock of Canadian agriculture put the agriculture industry in
turmoil. From the mid-thirties up until 1939, eastern Canadian prices continued to
improve. However, prices began to drop after 1939 as the state of the Prairie Provinces
began to worsen and influence the east. Reasons for this included the problem with the
levels of wheat. In the early thirties, there was a redundant amount of wheat due to the
fall of international trading. By 1937, there wasn’t enough wheat simply due to poor
crops. By 1938 and 1939, a just-below average crop along with an above-average crop
created a surplus of wheat in terms of the level of Canadian Wheat exports. The level of
exports was still greatly reduced. This surplus caused a devastating decrease in the price
of wheat which was similar to the price received earlier in the decade. In order for
agriculture to gain back its status, western Canadians had to take some sort of action.
Premier Bracken of Manitoba came up with three suggestions to the Prairie Provinces:
1. Regain export markets. (he was unsure about the speed of regaining)
2. Expand livestock and dairy output. (this would cause competition to eastern
provinces)
3. Abandon a large portion of cultivated land.
* The second point may not work by analyzing what occurred to the butter markets in the
early thirties. The Prairie Provinces increased butter production causing low butter prices
nationwide. This could reflect an outcome of increasing livestock in the Prairie
Provinces.
The Early Wartime Years
The first year and a half was uncertain for farmers. This was reflected in the
negative government policy for Canadian agriculture. Farmers had hoped that the
outbreak of war would cause a positive impact on prices, as this occurred in the First
World War. In World War I, the demand for wheat was extreme, thus acreage numbers,
wheat prices, and all prices based on agriculture in general increased. Wheat prices did
increase from the beginning of the war and up until 1940. For example, number 1
Northern averaged 55 cents per bushel all throughout August of 1939. In the first two
weeks of war, the price jumped to 80 cents per bushel. The price peaked at 90 cents per
bushel due to the closure of navigation on the Great Lakes. However, by May of 1940,
Germany invaded Norway, Denmark, Holland, Belgium and France. This lowered the
number of exports, thus causing a surplus in wheat, therefore, causing a drop in price to
30 cents per bushel on the Winnipeg Grain Exchange. Government intervention was the
only hope for stopping the rapid decrease in price. Although wheat prices were minimal,
there was a positive outlook for Canadian livestock and livestock products. This was due
to the events in continental Europe cutting off the UK’s traditional sources of these
livestock products. Therefore, the UK needed to import Canadian products. Up until
May, 1940, Canadian agriculture prices as a whole were not looking promising. The
surplus in wheat caused the production of hogs to increase. The 1939 hog contract with
Britain called for 291 millions pounds. However, Denmark was also exporting pork to
Britain. This drove the price of hogs down, as Britain could not handle the previously set
quota. Canada had to downsize their hog exports. This caused Canada to entice
domestic consumption of pork.
Dairy producers were somewhat disappointed with the price of their commodities.
However, prices did slightly increase with the higher demand from the UK. The low
production in the winter of 1939-1940 caused prices to rise from 11 to 19 cents/lb by
February, 1940. Storage stocks were also reduced around this time to 13 million pounds.
Apples, tobacco and poultry took a sharp cut in prices after the declaration of war.
Britain was the sole importer of these products. After the declaration of the war, the UK
chose to cut back on imports.
All of these problems in Canadian agriculture led to a surplus of almost all
products and even lower prices than prior to 1940. Seven months after Britain decreased
imports, they decided to increase all levels of imports. By the end of 1941, all
commodities, with the exception of wheat, had almost no surplus, and the price was
regained.
The Development of Government Wartime Policy
During the period of September, 1939 to December, 1940, the government was
not concerned about Canadian Agriculture. They regarded the industry on a “wait and
see” basis. They felt that agriculture would be needed sooner or later; it would just take a
matter of time. Farmers were not intrigued by this policy.
One reason why farmers were upset was because trade between agriculture and
the rest of the economy was unfair. The trade had not improved at all since the
depression. By combining low commodity prices and high cost of labour, farmers
became outraged at the government for approving a wage policy to sectors other than
agriculture. This policy stated that wages should be at or above the rates from 19261929. It also stated that these rates should increase with relation to the cost of living.
This issue was addressed at a conference in London, Ontario in January of 1941 between
reps. Of the Dominion Department of Agriculture, the Ontario Department of
Agriculture, the Canadian Federation of Agriculture and 20 other Ontario farmer’s
organizations. A number of positive policies were created for agriculture during this
conference thanks to Hannam – the representative for the Canadian Federation of
Agriculture. He spoke on the federal government’s unfair treatment of the agriculture
sector. He stated that action needed to be taken in order for farmers to be able to produce
required future levels of output. The government listened to this and thought about the
amount of exports needed for the remainder of the war.
Towards the end of 1941, the federal government used agriculture as a
mechanism of national policy in order for Canada to make such a large contribution to
the war. Several goals were set for the level of domestic and export requirements. At the
same time, price ceilings were set in order to prevent inflation. Throughout this period,
several government subsidies as well as marketing and price controls were implemented
in order to reach the goal for agriculture to meet the desired product mix and level of
output. This method was used mainly for wartime purposes and was different from that
of the policies during the depression which was intended to cope with domestic
agricultural problems.
Shifts in Production
Agriculture production greatly changed in Canada after the first year and a half of
war. This was due to the low demand for wheat exports along with the large amount of
surplus and the increased demand for livestock exports. The Prairie Provinces diversified
and began to produce feed grains and livestock, while Eastern Canada focussed on dairy
products and livestock as well. These changes were aided by government subsidies
which helped to lower input costs for livestock in Eastern Canada. In the Prairie
Provinces, these subsidies caused a larger attraction for livestock and feed grains, thus
causing the increase in production by 1938. Two actions were taken in 1941 towards
wheat production. The first action is still used today. Authorized acreages per farm were
developed on the basis for a quota system. This was implemented in July, 1941. Farmers
were allowed to deliver 65% of their declared wheat production from 1940. This initial
quota that was created in 1941 was five bushels per authorized acre.
The second method used was the Wheat Acreage Reduction Act of 1941. This
offered bonuses for farmers reducing their wheat acreage in 1941 to below their
production in 1940. These two measures caused the reduction of wheat acreage from
28.7 million in 1940 to 21.9 million in 1941. When this was achieved, the next goal
would be to increase feed grain production.
The livestock situation in Canada was opposite of the wheat situation. The
government hoped to increase numbers of Canadian livestock. To assist in this goal, the
government created a freight assistance program for feed grain. This assistance program
was only a small portion of the total assistance program the government created. They
also had feed-freight subsidies, fertilizer and lime subventions, feed wheat drawback
payments, cash subsidies (to encourage production of coarse grain during 1941 and
1943), and processing of livestock feeds assistance. These subsidies were created to
encourage livestock production under rising costs and product-price controls. Due to
these programs, farmers had little incentive left.
The purpose of the freight assistance policy in 1941 was primarily for the purpose
of equally sharing freight charges among the provinces that were transporting and being
transported to. This program was only utilized by Ontario, however. This is because
Eastern provinces had a feed grain shortage causing a decreased level of dairy and
livestock production. At this time, the government offered to pay one-third of the freight
charges on grains such as feed wheat, oats, barley, rye, corn, screenings and millfeeds
shipped east. This program was later revised when the government offered to pay almost
all freight charges from the Prairie Provinces to Eastern Canada and B.C. They also paid
a storage subsidy on those grains previously mentioned which were being stored in the
winter in order to be shipped early in the summer and fall when transportation was not so
difficult. Another storage subsidy was implemented to grain elevators Canada-wide to
store feed grains to be sent when there was an emergency in Eastern Canada.
Agriculture During World War II
The demand for wheat at the beginning of the war did not reach the heights that
were seen in World War I, and overproduction resulted.
The government stepped in and implemented changes to deal with this surplus of
wheat.
The first change was a quota system, in which farmers could deliver wheat on a
basis of 65% of their acreage.
The second change was the Wheat Acreage Reduction Act of 1941.
o
Offered bonuses for reduction of wheat acreage.
The combined effect of these changes was an overall reduction in wheat
production, which allowed the surplus to disappear.
In 1942 and 1943, the objective was to expand feed grain production.
In terms of livestock, the focus was on increased production.
The Freight Assistance policy of 1941 was implemented to ease the costs of
shipping and storing feed.
A fertilizer subsidy was introduced to encourage expansion of feed production, but
was soon replaced by a transportation assistance subsidy.
The transportation assistance subsidy extended to shipping of field crops, orchard,
and garden crops.
- In 1943 the Canadian Wheat Board took over the marketing of all wheat entering
commercial channels.
- Initial payments immediately increased.
- The federal government implemented a subsidy on farm gasoline and removed import
duties on farm machinery
- The purpose of these subsidy programs was to meet the domestic and overseas demands
of wartime conditions.
Price Control:
Up until 1940 there were many shortages and fluctuations due to confusion,
disorganization, and inconsistent markets.
Price controls were initially introduced on goods such as wool, sugar, and butter,
since the main concern for grain was surpluses.
By the end of 1941 these price controls were extended to include grain.
The main purpose was stabilization.
Along with the established ‘price ceiling’ were minimum prices, price supports, and
subsidies.
Effects of Wartime Policy:
-
Considerable increase in total output over a short period of time.
Livestock production increased.
Increase in wages for agricultural labor.
Increased stability, but a cost-price squeeze was created.
Administrative agencies had to be set up by the government to direct agricultural
policy during this time.
Farm organizations became concerned about the price ceiling, but the board refused
to raise it since it could upset the whole price stabilization program.
The Agricultural Prices Support Act was created in 1944 to alleviate concerns about
post-war agriculture, keeping in mind what happened following World War I.
o
Had the ability to prescribe prices, which provided farmers some security.
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Wheat was excluded from this act since it was already covered by the Canadian
wheat Board Act.
Tariffs on all agricultural goods were eliminated in order to encourage agricultural
growth.
The Farm Improvement Loans Act of 1944 was a guarantee that the government
would repay farm investment loans through the chartered banks.