The Problems with Farm Subsidies :: Economy

The Problems with Farm Subsidies Subsidies are payments, economic concessions, or privileges given by the government to favor businesses or consumers. In the 1930s, subsidies were designed to favor agriculture. John Steinbeck expressed his dislike of the farm subsidy system of the United States in his book, The Grapes of Wrath. In that book, the government gave money to farms so that they would grow and sell a certain amount of crops. As a result, Steinbeck argued, many people starved unnecessarily. Steinbeck examined farm subsidies from a personal level, showing how they hurt the common man. Subsidies have a variety of other problems, both on the micro and macro level, that should not be ignored. Despite their benefits, farm subsidies are an inefficient and dysfunctional part of our economic system. The problems of the American farmer arose in the 1920s, and various methods were introduced to help solve them. The United States still disagrees on how to solve the continuing problem of agricultural overproduction. In 1916, the number of people living on farms was at its maximum at 32,530,000. Most of these farms were relatively small (Reische 51). Technological advances in the 1920's brought a variety of effects. The use of machinery increased productivity while reducing the need for as many farm laborers. The industrial boom of the 1920s drew many workers off the farm and into the cities. Machinery, while increasing productivity, was very expensive. Demand for food, though, stayed relatively constant (Long 85). As a result of this, food prices went down. The small farmer was no longer able to compete, lacking the capital to buy productive machinery. Small farms lost their practicality, and many farmers were forced to consolidate to compete. Fewer, larger farms resulted (Reische 51). During the Depression, unemployment grew while income shrank. "An extended drought had aggravated the farm problem during the 1930s (Reische 52)." Congress, to counter this, passed price support legislation to assure a profit to the farmers. The Soil Conservation and Domestic Allotment Act of 1936 allowed the government to limit acreage use for certain soil-depleting crops. The Agricultural Marketing Agreement Act of 1937 allowed the government to set the minimum price and amount sold of a good at the market. The Agricultural Adjustment Act of 1938, farmers were given price supports for not growing crops. These allowed farmers to mechanize, which was necessary because of the scarcity of farm labor during World War II (Reische 52). During World War II, demand for food increased, and farmers enjoyed a period of general prosperity (Reische 52).