Jim Gray provides some very important history and insight on Rural America, what happened, and how we can and must bring it back to life.
Republished from Grass and Grain
Nov 5, 2023
The Way West
By “The Cowboy” Jim Gray
Transformation and Survival
As the great Civil War raged in the Shenandoah valley of Virginia, President Abraham Lincoln signed on May 20, 1862, the national Homestead Act into law. Settlement of the United States steadily marched westward since the founding of the country, pausing only for a moment as war split the nation into north and south.
The idea of free land for the development of the western territories began to grow with the 1848 organization of the Free Soil Party which combined an anti-slavery stance with a proposed “free land” endowment to industrious settlers willing to clear and improve that gift of property. Their slogan, “Free soil, free speech, free labor, and free men,” brought the idea of organized settlement to national attention.
By 1860 an early version of the homestead bill was vetoed by President Buchannan before ultimately succeeding under the Lincoln administration in 1862.
“The Homestead Act allowed landless people
to gain precious land, an ideal that had
previously seemed out of reach.”
The Homestead Act allowed landless people to gain precious land, an ideal that had previously seemed out of reach. Before them lay the chance to enjoy a life of self-preservation under the assumption of personal independence. However for most homesteaders independence was merely an illusion as they fell into debt by merely trying to keep a responsible hearth and home for family. Many homesteaders were unprepared for harsh pioneering conditions. Almost from the beginning 160 acre homesteads were abandoned or sold at ruinous prices.
The strong or downright lucky endured. Railroads spread web-like systems across the country bringing economic opportunity which, of course, necessitated additional debt. Towns sprung up every half-dozen to fifteen to twenty miles. By 1890 four out of every five (80%) of Americans lived in rural areas. Rural America seemed to be thriving, but the debt cycle subtly continued. By the turn of the century industrial innovation produced a population transition from farms to American’s urban centers.
While rural populations diminished, the growing urban American population provided a considerable resource to sustain those who remained on the farm. The industrial revolution offered innovations in farm machinery and practices. Agriculture shifted from the previous emphasis on self-sustaining subsistence production to “export” distribution of excess production to burgeoning cities. The surge of the industrial revolution inversely served to veil the underlying weaknesses built into an erratic agricultural economy.
The dawn of the 20th century brought the concept of “parity pricing” as a tool to stabilize prices for farm-raised commodities. Under parity pricing the financial exchange of agricultural production could equalize rapidly changing commodity values with the economic reality of the rest of the American economy. To achieve equality for rural families an adjustment up or down was proposed considering the costs of production. The intended result would be a working income equal to other sectors of the economy. Sounds fair. Farmers and ranchers were only feeding everyone else with that production. Just as the idea was taking hold farm prices stabilized and for the time being the idea of agricultural parity languished.
“Corn, for example, tumbled from $1.30 per
bushel in 1919 to 63 cents per bushel in 1920.”
During the years of 1909 to 1914 the rural economy operated on a par with urban income. Even so, the previous ten years of poor prices had extracted its toll. Americans living in rural areas fell from the 1890 figure of 80% to 65% by 1915. At the same time, European powers stumbled into the conflict that ultimately drew the United States into “the war to end all war. ” Prices skyrocketed throughout World War I, but just as the war failed to end all war, agricultural prices failed in the years following the war. Corn, for example, tumbled from $1.30 per bushel in 1919 to 63 cents per bushel in 1920.
The war years allowed the old cycle of debit vs. staying in business to become entrenched into America’s heartland. Farmers, who were encouraged to invest in new equipment and to produce more and more during the war found themselves deeply in debt, producing surpluses that were no longer needed. The “Roaring 20’s” passed them by with disintegrating prices and exorbitant debt barred them from the prosperity that their city cousins experienced.
Cattle producers fared a little better after the post war collapse began to rebound in the late 20’s. Meanwhile the 1920’s ground into the Great Depression of the 1930’s with very little letup as the farm sector was swept away. Farm prices dropped a staggering 67% from 1919 to 1933.
As early as 1929 the government had finally come to the realization that stable food production was a matter of national security. The Hoover administration introduced the Agricultural Marketing Act an attempt to buttress the failing farm economy, but the effort didn’t go far enough and the farm economy continued to decline.
“… the act didn’t go far enough to significantly enhance
the rural economy. It would take another war to
bring prosperity back to rural America …”
By 1933 economists revisited the concept of parity pricing for agricultural commodities. The “Golden Years” of 1910-1914 were identified as the target of profitable years for America’s farmers. The Franklin D. Roosevelt administration passed the Agricultural Adjustment Act that year. A “floor” price was included to support certain commodity prices giving at least some farmers purchasing power equal to that of the urban workforce. Even so, the act didn’t go far enough to significantly enhance the rural economy. It would take another war to bring prosperity back to rural America in the continuing saga of agricultural transformation and survival on The Way West.
Waiting For Next Year
At seventy-three years of age rural America has been in distress nearly my entire life. For most readers few can remember true good times other than an occasional year or two. Stringing three good years together has proven to be so rare that I truly don’t recall it happening. Stories are told of the farmer who bought an 80 or a quarter-section of land in the 1950’s and paid for it with his first wheat crop. Ah, those were the days!
Farmers struggled through the Great Depression of the 1930’s with limited support from the government’s Agricultural Adjustment Act (AAA) of 1933. In the words of Kevin Englebert in “A Brief History of Parity Pricing” … “Politicians and agricultural leaders realized that prices for farm products were not in themselves of primary significance. Of far greater importance was what farm products would buy in terms of clothing, energy, feed, machinery, fertilizer, services, and other items farmers needed for living and food production. The 1933 AAA authorized Congress to reestablish commodity prices that would give farmers the purchasing power, with respect to items they buy, equivalent to the purchasing power of agricultural commodities in a ‘base’ period.”
That base period identified 1910-1914 as the “Golden Years” of rural economic equality with that of the urban workforce giving farmers the purchasing power to sustain the business of feeding the country. The problem was that the floor for pricing was set too low to accomplish the desired result.
“Production soared as America was tasked with
not only feeding the country and its soldiers but
much of devastated Europe.”
In the atmosphere of unstable world-wide economic conditions war returned to Europe and in due time America was drawn into World War II. Americans geared up to support the war effort and as in WWI American farmers were asked to “win the war with wheat.” Production soared as America was tasked with not only feeding the country and its soldiers but much of devastated Europe. To encourage that production, minimum commodity price floors were raised in 1942. Support for basic crops was set at 90% of parity. Prices soared above parity giving rise to a new prosperity never before seen in rural America.
Unfortunately many critics of the parity system failed to realize the importance of maintaining economic equality across rural America. In response to political pressure a new 1948 AAA was enacted diminishing purchasing power from farm production with “adjusted base prices.” To soften the blow the previous floor of 90% was extended until 1950 with a varying range of 60-90% of parity after 1950. Prices continued at rates near parity into the mid-1950’s but the decisions made in 1948 reverberated through the coming decades with declining rates of profit for industry, losses of liquidity in banks, ongoing inflationary pressures, and fewer farmers on the land. The loss of farm parity would ultimately shatter rural America.
In 1972 I began farming on a small scale, as I had grown up, with my father and uncle. With a brand new wife and dreams as big as the night sky, all I really wanted to do was live a good life away from all the world’s troubles. I didn’t know it then, but I was stepping into a cauldron that was just beginning to heat up. I and all the rest of us who were trying to live the American dream of freedom and carrying on in family footsteps; all of us were nothing more than the proverbial frog that had been dropped into a pot of warm cozy water that was slowly, but oh so steadily growing warmer. My story is just one version that thousands of us in rural America were facing, each in our own way.
In 1972, U. S. Secretary of Agriculture Earl Butz with big grain companies negotiated a Russian grain deal leaving farmers in the dark while his buddies in the big grain companies squeezed as much grain out of the farmers as they could before the price of wheat rose to over $5/bushel. Very few farmers sold at $5. We couldn’t believe prices of over $4.00 and nervously sold thinking the bottom would drop out. Butz favored big agriculture and told farmers to “Get big or get out.” He followed that with the admonition to plant “fencerow to fencerow.” The race was on.
“If you are in the cattle business for the lifestyle you
had better get out, because only those who operate
on a business platform are going to survive.”
I remember a cow/calf conference in which a university “expert” told us, “If you are in the cattle business for the lifestyle you had better get out, because only those who operate on a business platform are going to survive.”
Inflation set in. Lenders encouraged us to invest, invest. Then the bottom fell out. Farmers organized a “Tractorcade” to Washington D. C. to draw attention to the economic disaster unfurling on the farms and ranches across the country. I stayed home determined to cling to my lifestyle.
The early 80’s played out as though we were living a nightmare that wouldn’t go away. Suicides were reported all too often. Farm sales were nearly an everyday affair as tens of thousands of farmers lost everything. The pot was boiling but we were so used to it we just kept paddling hoping for a respite that would help us endure one more year. Somehow we always made one more year.
At one time I recall going to my lender to ask for $100 to feed my family. Finally, the lender told me I had to sell out. He had the gall to ask, “How did you get yourself into this situation?” Sitting behind his brand new desk in the brand new building he had just built, the question was absurd. I knew I was worth more than they were figuring. Sold most of my cows and paid them off. Never again…
The water in that cauldron was boiling, but we just carried on waiting for next year. Seems like it has always been “next year” on The Way West.
Living the Dream
Once upon a time the founders of this country dreamed of a land that spread from sea to shining sea. They envisioned prosperous farms and ranches covering the land like a beautiful handmade quilt. Vibrant villages filled with shops, schools, and churches provided community and a sense of place making America the finest place on earth to live and raise a family no matter where you were placed on that beautiful quilt. What a beautiful dream!
“There are those that would say it was “only” a dream.
I’m not one of those.”
There are those that would say it was “only” a dream. I’m not one of those. Oh, yes, it is a certainty that the dream was shattered, but that doesn’t mean we should let it go. Back in those terrible days of runaway inflation and the economic chaos that followed in the early 1980’s I almost lost the dream. It had faded from consciousness but somewhere in the darkness a dim light still flickered.
“How did you get yourself into this situation?” the unconscious lender asked when he pulled the rug out from under my family in 1981. He thought I was just one more bit of chaff to be rendered from the harvest. The common line of the day was that agriculture was in fine shape. The inefficient farmers were just being weeded out to make room for the bigger, better operators.
I held out with ten cows and calves after liquidating my herd to pay the debt and regain some breathing room to build again. It was never easy, but you could say I have a stubborn streak, and I sure wasn’t inefficient. Those of us that are left today can tell the stories of good farmers and ranchers that were forced out.
Government policies have come and gone. Prices have moved upwards only to be dashed just as something like a livable wage began to emerge.
Presently, we have good cattle prices. The last time that happened imports were opened up and foreign beef flooded in to break the market. You wonder whose side are they on? Do the powers that be really want to break the heart of the very soul of America?
I don’t really think that the economists who shaped the farm programs wanted to break farmers. I just think that they didn’t know what they were doing. It’s the same for those who are trying to revive rural Kansas communities.
Rural Opportunity Zones were initiated in 2012 to reverse or at the very least slow rural depopulation. The abysmal result after ten years showed a continued outflow in population that far exceeded the 1,400 people the program had drawn into the state. There are other programs in the state and across the nation that are attempting to solve the problem of rural depopulation. A nationwide coalition of organizations called “Thrive America” has brought some of the best minds together to tackle intricate problems that wouldn’t need to be addressed if they only recognized the core failure of inadequate purchasing power on the farm. These well intentioned efforts frankly miss the mark. Under the Kansas Department of Commerce the Office of Rural Prosperity is charged with advocating for and promoting “efforts designed to aid rural improvements.” Perhaps they should advocate for a small farms friendly federal farm program.
Take a drive across the Great Plains. It doesn’t really matter what route that you take. Decay and ruin is all too common. Certainly there are stalwart folks who refuse to give up. They should be applauded for all that they do in the face of continued depopulation.
“So why haven’t we reinforced the weakest link of
agricultural production in the national economy?”
The weakest link is always the one that must be repaired first. Repair that link and the chain will continue to perform its function. One wouldn’t add reinforcement to a link that was strong and durable. So why haven’t we reinforced the weakest link of agricultural production in the national economy? If the nation desires to be strong, if we truly want to be that shining light on the hill, why aren’t we seeking to strengthen the nation by strengthening its very foundation?
I’ve always found it strange that the phantom world of stocks and bonds and paper trade has more perceived value than the production of the essential wealth of food and fiber. In our upside down world real wealth is subjugated to the whims of individuals who live in a fantasy world. One that has been created from the ashes of the very same vanquished producers of that real wealth. They have convinced themselves that they are the ones who live in the real, dog eat dog world, while producing nothing of real substance. It’s all slight of hand, mind boggling manipulation that produces the illusion of an incredibly misplaced perception of reality. For true wealth comes from the tangible production of the earth.
“Agricultural leaders tell us that nothing can be done to
return America to a small farm economy, an era long past.”
Agricultural leaders tell us that nothing can be done to return America to a small farm economy, an era long past. The honest truth is that their policies have failed us, one and all. That failure has produced a landscape of empty farmsteads and ghost towns that once supported us on The Way West.
Repair Rural America
Agricultural leaders tell us that nothing can be done to return America to a small farm economy, an era long past. But that is very short sighted and essentially dangerous. The honest truth is that their policies have produced a landscape of empty farmsteads and ghost towns all across America.
The bigger is better refrain has dominated thought to the exclusion of rational reflection upon the destructive course we have followed. Our leaders are locked in the grip of the bigger is better refrain mesmerized by the “Bigger & Better” Pied Piper luring them and us ever closer to the cliff.
Those “authorities” will tell you that the course of agriculture brings larger and larger scalable agricultural systems. They often advise that it is impossible, or nearly so, for a young, inexperienced person to get into farming. They don’t look for answers to the dilemma, because they keep hearing the same “Bigger is Better” refrain supported by the verse, “No room for new farmers.”
Well, let’s challenge that.
For well over the last century we have witnessed the complete devastation of rural America, not just the farms, but entire communities. The decline of farm families meant diminished support for the shops, schools, and churches of nearby towns bringing failing municipalities. Schools were depopulated resulting in consolidation. In turn consolidation decisions failed to consider the economic significance of schools to the community at large. The loss of the school further depopulated the town and on and on. No one was or is thinking holistically. Having a vital farm economy is key, the very foundation of the entire economy.
“Economists may not have intended to devastate
rural America, but that was the result of their action.”
Economists may not have intended to devastate rural America, but that was the result of their action. It’s time we faced the truth of the matter, instead of pretending that it’s not there. I for one am tired of playing the frog in the warming water and not recognizing that it has reached its boiling point!
The actions of agricultural economists over the past century amount to nothing less than social engineering. Yes, farmers and the youth of rural America have been engineered by economic persuasion to move to urban centers to survive. It’s time to reverse the course to socially engineer a revitalized rural America.
If the government can engineer its citizens to migrate to the cities it can engineer them to return to the farms and communities of America’s heartland. It is no less than a matter of national security to “Repair Rural America.”
The farm bill typically spans a period of five years. With a new program about to begin we have five years to turn this train around making a new farm bill due in 2028. A government program that hearkens back to the days of the historic Homestead Act is the missing piece of the puzzle to begin the “Repair” of rural America. Parity is how “Repair” gets done. It would have to be a long-term process. We lost it all over the last century and getting it back may well take another century.
Instead of 160 acres per homestead the size would need to be determined according to localized conditions, but each “homestead” would be something that would provide a good living considering production potential. Those who qualified would receive guaranteed 100% parity for their production. Larger farms would continue under ongoing production support although unable to reap the benefit of full parity. That would give the small farms a competitive position and ultimately would allow for a larger percentage of farmers on the land. Examples of prices paid in July of 2023 are corn $6.36/bushel compared to full parity of $15.30/ bushel, while wheat at $8.13/bushel compares to full parity at $20.40/bushel. Full parity for soybeans in July was $37.50 and cattle averaged $443.00/hundred weight. At those prices you don’t need to farm thousands of acres. Small farms could flourish and with them small towns and a revitalized heartland.
“It took 100 years to break the farm economy
and it probably will take 100 years to fix it.”
The land would come slowly, from present-day farm sales as the older generation continues to bow out. In some cases existing farm family members could qualify to stay on the land rather than leave for the city life. It took 100 years to break the farm economy and it probably will take 100 years to fix it. But that doesn’t mean that the rural economy has to continue on a decline or even stand still.
We could easily see larger operations downsize when they recognize that small farms are making very comfortable profits without having to manage mind-boggling mega-acreages. With potential downsizing several small farm operations could operate on the same footprint as the previous larger operation, all with very sustainable margins of profit. In turn, greater profits will support the process of rebuilding small town economies. More than just a “repair” program for farms, additional support programs should be made available to encourage commercial investment in rural towns.
An investment in American stability and affluence in the heartland is good for all, for it supports the production of true wealth from production that comes from the earth. The cost on the surface is a tremendous commitment that can not be denied, but the benefit is one that also can not be denied. INVESTMENT! That is the watchword. The current disastrous atmosphere in rural America is the result of social engineering, whether intentional or not. Farm programs have failed. It is time we INTENTIONALLY engineer a rural revitalization.
Don’t’ say that it can’t be done. Our farms, ranches, and hometowns deserve nothing less as we Repair Rural America on The Way West.
“The Cowboy,” Jim Gray can be reached at 220 21st RD Geneseo, KS Phone 785-531-2058 or email@example.com.