Department of Agriculture
Timeline of Growth
- 1789: The U.S. Constitution goes into effect. The federal government’s enumerated powers do not include the creation of farm and food subsidy programs.
- 1820: The House of Representatives creates an agriculture committee. The Senate follows suit in 1825.
- 1840: The first Census of Agriculture is completed.
- 1862: The U.S. Department of Agriculture is established. President Abraham Lincoln calls it the “people’s department.”
- 1862: The Morrill Act provides grants of federal land to the states. The states are to use the proceeds of land sales to create colleges focused on agricultural studies.
- 1867: A new Washington office building for the USDA is completed.
- 1881: Congress establishes a Division of Forestry in the USDA.
- 1887: The Hatch Act provides subsidies to the states for agriculture research.
- 1890: A second Morrill Act begins regular appropriations for the land-grant colleges.
- 1891: The Forest Reserve Act allows presidents to set aside forest reserves out of public lands. These reserves are managed by the Department of the Interior.
- 1900: There are 11 million Americans employed on farms and 2,900 employed by the USDA. A century later there are 3 million employed on farms and 105,000 employed by the USDA.
- 1905: The Federal Forest Transfer Act moves control of the forest reserves from the Department of the Interior to the USDA’s new Forest Service.
- 1905: Major scandal hits the USDA when an employee seeking personal gain leaks advance cotton market information to a speculator.
- 1911: The Weeks Act authorizes federal subsidies to the states for forest fire prevention and it allows the Forest Service to purchase private lands for national forests.
- 1914: The USDA opens state and regional offices across the country.
- 1914: The Smith-Lever Act begins subsidies to the land-grant colleges for agricultural research.
- 1916: The Federal Farm Loan Act creates cooperative “land banks” to provide loans to farmers. Legislation during the 1930s expands this Farm Credit System, and today the FCS is a 50-state network of financial cooperatives with assets of $90 billion.
- 1929: The Agricultural Marketing Act creates the Federal Farm Board to subsidize agricultural cooperatives. The cooperatives stockpile commodities to raise prices and disrupt markets in various other ways. After spending $500 million, President Hoover’s Farm Board boondoggle is abolished in 1933.
- 1929: The Federal Reserve System precipitates the Great Depression by allowing the U.S. money supply to shrink by one-third between 1929 and 1933. Agricultural commodity prices fall even more than general prices, which puts farmers in a squeeze. Two large cost items for farmers—mortgage interest and property taxes—remained relatively high compared to plunging receipts from farm sales.
- 1930: A rising protectionist sentiment is stimulated by President Hoover’s call to increase agricultural tariffs to help farmers. Congress responds with the Smoot-Hawley Act, which greatly increased tariffs on both farm and industrial products. Other countries retaliated and U.S. agricultural exports plunge 60 percent by 1933.
- 1933: The Agricultural Adjustment Act, and subsequent New Deal laws, creates the forerunners of today’s major farm subsidy programs. The main thrust of the AAA is to limit production in order to raise commodity prices. To the same end, the government plows under 10 million acres of crops, slaughters 6 million pigs, and allows fruit to rot in the orchards, even while millions of Americans are going hungry. Some elements of the AAA are struck down as unconstitutional in 1936, but most of the law’s central planning techniques survive in various forms in today’s farm programs.
- 1934: The Jones-Connally Act extends the AAA to cover additional farm products.
- 1934: The Jones-Costigan Act imposes controls on U.S. sugar production and sugar imports.
- 1934: The Tobacco Control Act imposes quotas on tobacco production.
- 1935: The Federal Surplus Commodities Corporation begins large-scale food welfare activities with the distribution of surplus farm products to schools.
- 1935: USDA employment more than triples between 1929 and 1935, reaching 85,000. USDA employment reaches 100,000 by 1958 and peaks at 138,000 in 1978. Today, the USDA employs 105,000 workers.
- 1936: The Rural Electrification Act initiates extensive rural subsidies that continue in various forms today.
- 1937: The Agriculture Marketing Agreement Act establishes federal “marketing orders” for dairy products, fruits, vegetables, and other products. Marketing orders are producer cartels designed to limit competition and raise prices. They are currently in effect for 30 commodities.
- 1938: A new Agriculture Adjustment Act establishes most of the policies of the 1933 Act on a permanent basis, including production controls and price supports for wheat, corn, cotton, rice, tobacco, and peanuts. The 1938 Act also creates the Federal Crop Insurance Corporation to provide subsidized insurance for adverse weather, insects, and other farming hazards.
- 1946: The National School Lunch Act creates a permanent subsidy program to provide food to schools, building on the surplus commodities program of 1935.
- 1946: The Farmers Home Administration is established to make loans for farms, rural housing, and other activities.
- 1949: A new Agriculture Adjustment Act extends crop price support and subsidy policies, adds subsidies for the dairy industry, and puts farm programs into permanent law. Since 1949, farm legislation has included expiration dates, which prompts Congress to pass renewed congressional authorizations every five or so years.
- 1954: The Agricultural Trade Development and Assistance Act creates various export subsidy programs designed to unload into foreign markets excess production caused by U.S. price supports. Unfortunately, many other countries with government-caused overproduction followed suit, and they also dispose of their surpluses on foreign markets.
- 1964: The Food Stamp Act creates what has become one of the largest welfare programs, a program that is known for major fraud and abuse. The program currently costs federal taxpayers more than $35 billion a year.
- 1973: With soaring prices for agricultural commodities, the mid-1970s would have been a good time to end farm programs, as some people proposed. Instead, the farm bills of 1973 and 1977 take a business-as-usual subsidy approach.
- 1985: Despite the Reagan administration’s proposals to cut farm subsidies, the poor shape of farm finances during the 1980s prompts Congress to pass the expensive Food Security Act of 1985. This law added new farm subsidy programs, including the Export Enhancement Program and the Conservation Reserve Program, which pays farmers not to farm.
- 1996: Congress changes course in farm policy with the passage of the Federal Agriculture Improvement and Reform Act—the “Freedom to Farm” law. The law is designed to allow farmers greater planting flexibility and better align producer decisions with market supply and demand. But Congress reneges on reform, and passes large supplemental farm subsidy bills four years in a row beginning in 1998. When the 1996 law was passed, subsidies were expected to cost $47 billion over 1996 to 2002, but they ended up costing $121 billion.
- 2002: The Farm Security and Rural Investment Act reverts to old-style subsidy increases and price supports as farm-state politicians reject the modest reform proposals of the Bush administration. An expensive “countercyclical” price support program is added, and existing programs are expanded to cover additional crops. The 2002 law increases projected subsidy payments by 74 percent over 10 years.
- 2008: The Food, Conservation, and Energy Act expands farm subsidies, and it is enacted over a presidential veto.
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