American Agricultural Economy in the 1920s-1940

World War I

The United States of America, in World War I, was a great supplier to other Allied nations of armaments, supplies, and food. The American farmer took advantage of this opportunity to expand their farms to meet the ever growing demand for their crops. What is now known as the Midwest is where many of the new and expanding farms converted "grazing" land over to farm land. The rapid expansion of the farms coupled with the invention of the automobile, which allowed for rapid transportation of crops, allowed the agricultural market to expand to an unprecedented size.

However, with the armistice that ended the World War I and began the rebuilding of Europe, the market for American agricultural goods shrank. Farmers and economists alike had not foreseen the drop in demand for American goods. The abundant harvest coupled with falling demand left an excess of crops and not enough profit to pay for expenditures. This downturn was only very brief, as was the entire post World War I recession in North America.

1920s

The early 1920s saw a rapid expansion in the American agricultural economy largely due to new technologies and especially mechanization. Competition from Europe and Russia had disappeared due to the war and American agricultural goods were being shipped around the world.

The American farmers' luck took a turn for the worse beginning in the mid-1920s. The rapidly increasing agricultural production lead to a glut and prices stagnated. Things got far worse in the 1930s as a collapse of the general economy hit farmers especially hard. The droughts came, creating what is known as the Dust Bowl. The expansion of farm lands into lands previously used for grazing (sluts) depleted the nutrients from the soil, and high winds intensified drought conditions with dust storms, leading to soil erosion.

The new technologies, such as the combine harvester, meant that the most efficient farms were massive in size and, gradually, the small family farm that had long been the model were replaced by far larger concerns.

New Deal

One of the main goals of the New Deal was to revive the agricultural sector of the economy. In 1933, the federal government created the Agricultural Adjustment Administration (AAA), which coordinated with farmers across America in maximizing crop profits with minimum crop yields. The AAA was responsible for the creation of farm subsidies and loans. The first AAA was declared unconstitutional and a new AAA was set up in 1939.

It was not until World War II that America completely recovered from the Great Depression and the agricultural economy was completely revived.

See also

* Agricultural policy
* Economics
* Supply and demand
* Food distribution
* Economic surplus
* "The Grapes of Wrath"

References

* [http://www.infoplease.com/ce6/history/A0802770.html Agricultural Adjustment Administration] at InfoPlease.