The evolution of agriculture under U.S. capitalism

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The evolution of agriculture under U.S. capitalism
Ledford, Elaine F
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Agriculture -- Economic aspects -- United States ( lcsh )
Agriculture -- History -- United States ( lcsh )
Capitalism -- United States ( lcsh )
Agriculture ( fast )
Agriculture -- Economic aspects ( fast )
Capitalism ( fast )
United States ( fast )
History. ( fast )
bibliography ( marcgt )
theses ( marcgt )
non-fiction ( marcgt )
History ( fast )


Includes bibliographical references (leaves 72-77).
General Note:
Submitted in partial fulfillment of the requirements for the degree of Master of Arts, Department of Political Science.
Statement of Responsibility:
by Elaine F. Ledford.

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|University of Colorado Denver
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Full Text
Elaine F. Ledford
B. A.,
University of Colorado at Denver,
A thesis submitted to the
Faculty of the Graduate School of the
University of Colorado in partial fulfillment
of the requirements for the degree of
Master of Arts
Department of Political Science

This thesis for the Master of Arts degree by
Elaine F. Ledford
has been approved for the
Department of
Political Science
Lawrence/J. Mosqu^da

Ledford, Elaine F. (M.A., Political Science)
The Evolution of Agriculture Under U.S. Capitalism
Thesis directed by Assistant Professor Lawrence J. Mosqueda
This study of the development of agriculture under U.S.
capitalism offers a reinterpretation of historical data, a look at
present-day agricultural roles, and the future of U.S. agriculture
from a Marxist perspective. Both liberal and conservative thinkers
have analyzed the current crisis in U.S. agriculture from a linear
perspective. When using a Marxist dialectical method in analyzing
the forces and relations of production, new insight is given into
the evolution of historical roles and power relationships as
components of the survival needs of a capitalist state. As
explained by Douglas Dowd, these needs include expansion, exploita-
tion, and rule by an oligarchy.
Throughout U.S. history, farmers have been an exploited
class due to their inability to control those economic and political
forces that have led to their subservience. Capitalists, including
land speculators, middlemen, bankers, and corporations, have reaped
the advantages of their superior power positions. The U.S. govern-
ment has directly and indirectly helped to set up and maintain these
lopsided relationships through legislative acts and subsidy pro-
Present-day agriculture reflects the enormous shift of land
into capitalist hands, a manifestation of the continued exodus of
people from the farms due to oligarchic Federal land policies. The
growth of corporate farming, the complexities of futures marketing,
the growth and secretive activities of agricultural middlemen, and

the expanding role of government supports are all part of the
complex picture of today's agriculture.
The immediate future of U.S. agriculture will probably mean
the relegation of farmers to the role of contract laborers or
corporate workers. An alternative future, in which rational
agriculture flourishes under an egalitarian, socialist state, is
possible if a radical occurrence happens in U.S. capitalism.

I. INTRODUCTION .............................................. 1
II. REVIEW OF THE LITERATURE .................................. 10
OF U.S. AGRICULTURE ........................... 19
IV. PRESENT STATE OF U.S. AGRICULTURE ......................42
V. FUTURE OF U.S. AGRICULTURE ................................ 59
BIBLIOGRAPHY .................................................... 72


Capitalism, as a dynamic, social, and political process in
the United States, has had resounding repercussions on all aspects
of American life. One of these aspects is in U.S. agriculture.
The transformation of U.S. agriculture has been caused by many
interrelated and complicated factors that are unique in the history
of humankind and world agriculture.
U.S. capitalism has been scrutinized carefully by many
analysts from many different world views. Some analysts have looked
at U.S. agriculture under capitalism. However, when analysts look
at certain aspects of U.S. capitalism, such as U.S. agriculture,
they usually analyze it as an entity in and of itself, separated
from the rest of U.S. society.
Such socio-political thought usually falls into two
categories; namely, conservative and liberal thought. The features
of each are distinctive within the context of conventional linear
thought and supply the basis for most articles written about U.S.
agriculture today. A look at these viewpoints as they pertain to
agriculture will point out their differences.
Most conservative and liberal analysts would agree that
there is currently a crisis in agriculture and that it "has become

one of the most visible economic tragedies of the decade.Fur-
thermore, most of these analysts would state that we cannot proceed
in agriculture as we have in the past if the system is to remain
intact. The differences in these analyses comes in identifying the
problems and what solutions should be undertaken.
Conservative economists and writers tend to downplay or fail
to acknowledge the extent of the problem. An recent article in the
Atlantic Monthly reads, "Farm families as a group are not poor...
farmers are not being driven from the land... farming is not a
disastrous investment."^ Also in November 1985, Fortune magazine
reported, "The overall condition of U.S. agriculture is not nearly
so bleak as the footage of foreclosure auctions on the Nebraska
Of those conservative thinkers that do acknowledge that
there is a problem, most point an accusatory finger at both the
farmer and the government. They state that farming is a business
just like any other and that there are failures in any form of
business. The article in the Atlantic Monthly notes:
From the impersonal standpoint of economics, the 19 percent
of farmers who, according to the Federal Reserve, are in credit
trouble might be viewed as representing agriculture's excess
production capacity. Last year 81 percent of the production
capacity of all U.S. industries were in use, leaving 19 percent
idle. Looked at this way, the share of borderline cases in
farming is not particularly different from that of other
This type of analysis condemns the government for stepping
in to "rescue" the farmers by use of subsidies and loans. Further-
more, this argument states that the government is shielding farmers
from the rigors of a free-market economy at taxpayer expense. The

solution to the problem, the argument proceeds, is for the govern-
ment to step out of agriculture and let the free market take its
On the other hand, liberal thinkers feel sympathy for the
farmers and feel that either the government is not doing enough to
resolve the crisis or is being too harsh by foreclosing on so many
farms that have government loans. They want the government to
intervene even further into agriculture to protect the family farm
from being taken over completely by big corporations. Many of the
liberals are the farmers themselves, who have turned away from their
conservative attitudes of the past. Some of them feel that the
Republican Party of their ancestors has abandoned them and has given
them empty promises.
These critics favor solutions that include higher governnent
support prices and a mandatory supply management enforced by the
government to limit production. Also, they have sought moratoriums
on farm foreclosures and have formed organizations to fight for
their causes at all levels of governnent. One such organization is
the National Save the Family Farm Coalition, whose president Helen
Walker has stated:
If family farmers are pushed off the land and this part of
the food chain is turned over to giant corporations, we will no
longer have a reliable food supply. Consumers in urban and
rural America have a lot at stake.-*
Chapter II of this thesis will examine in detail the various
types of literature that represent these world views on U.S.
agriculture to date. Superficially, these two views appear to
represent two distinct analyses of U.S. agriculture. In actuality,

the views are limited by the context in which they view U.S.
agriculture and because of this limited focus, these authors are
trapped in a world view where linear thought dominates. Linear
thought tends to focus on a singular aspect of larger issues with
the goal of finding absolute causes and effects. Another charac-
teristic of linear thinking is its focus on the outward appearances
of any particular aspect of society. In the case of U.S. agricul-
ture, for example, linear thinkers make theories based on agricul-
tural statistics, without analyzing the society's mode of production
that created those statistics. Also, by taking this linear view,
their analyses fail to recognize the inherent features of U.S.
capitalism that have made the historical process in U.S. agriculture
possible and probably inevitable.
The focus of this thesis is to depart from the aforemen-
tioned linear world views and to examine the development of U.S.
agriculture as a phenomenon of the nature and evolution of U.S.
capitalism using a Marxist analysis. Briefly, the Marxian
analytical method utilizes a perspective (the materialist conception
of history) that notes the importance which the productive and
reproductive activities of humankind (the "real" world of human
activity) have played in history. Marx felt that we must grasp
certain materialist concepts in order to evaluate the internal
relationships that occur in our everyday lives. For example, we
must look at the following material aspects of history in order to
understand their role in human activity:
(1) Mode of production how a society produces and
reproduces itself.

(a) Forces of production i.e., land, technology,
labor, industry, etc.
(b) Relations of production the relationships between
the people who produce and the people who appropriate.
In this analysis, when these different aspects interact,
historical change occurs, and class struggle, as Marx describes it,
is part of the historical change. This type of analysis uses
dialectical thought which differs from linear thought in that it
focuses on the essential features of the capitalist system (its
totality) rather than its outward appearances or manifestations.
Dialectical thought in a Marxist analysis also focuses on the
contradictions that are inherent in the capitalist system that will
ultimately mean its destruction.^
Once we understand the basis of Marxist analysis, the second
step in this examination is to understand how U.S. capitalism is
described from a Marxist perspective. In a historical context,
capitalism is a relatively new phenomenon, born from the passing of
feudalism in the sixteenth century.^ Therefore, capitalism can best
be understood as a unique historical development. Whereas all of
world history has had systems of production, Douglas Dowd has *
The special power of capitalism as a system of production
has been due to its abilityindeed, its needto subordinate
all social relationships to its dynamism.
Two authors who have looked at capitalist development in the
United States from a Marxist perspective will serve as a foundation
for looking at U.S. agriculture in this thesis. These two authors
are Douglas Dowd who wrote The Twisted Dream: Capitalist

Development in the United States since 1776 and Edward S. Greenberg,
author of Capitalism and the American Political Ideal.
Each author provides valuable insights into the prevailing
theories of U.S. society versus a Marxist explanation. Discussed
briefly, Douglas Dowd states that there are three prime needs of
capitalism: for expansion, for exploitation, and for rule by what
amounts to an oligarchy.^ He further states:
Expansion is a process; exploitation is a set of relation-
ships. Both are necessary for capitalist development and
neither functions effectively without the other.
The key institutions that are part of capitalism are private
ownership and the control of the means of production in the hands of
the very few. Dowd enumerates the characteristics of the "political
economy of expansion" as follows:
1. Production is for profit, not use; it is production for
sale, for the market.
2. Capitalism rests upon individualistic ownership, con-
trol, and direction of production, and upon capitalist
competition within and between industries and econanies,
even in the era of monopoly capitalism.
3. Technological innovation...requires market expansion if
the increased production and productivity that make
technological change profitable are to occur.
4. Capitalist exploitation and accumulation depend upon and
perpetuate a highly unequal distribution of incane and
5. Capitalism has always depended upon debt financing to
some degree for its production and investment activi-
ties .
6. From its beginnings, capitalist economic expansion has
depended upon intermittent and deepening waves of
geographic expansion (emphasis added).H
Edward Greenberg also gives valuable insight. Greenberg
explains that the distinctiveness of capitalism from previous modes

of production is that there is a wage relationship between the
capitalist and the worker (i.e., workers always produce more value
than they receive in wages, called surplus value). Also, under
capitalism, there exists the commodity form of production which
means that everything is for sale in the marketplace.^ This means
that human labor power, too, "becomes an object for sale."13
The capitalist mode of production, according to Greenberg,
have certain laws of motion that lead to the following consequences
1. There is an unprecedented and continuous development of
science and technology and hence of the ability to
produce material goods.
2. Capitalism exhibits an inescapable tendency toward the
centralization and concentration of economic power; it
produces organizationally and financially larger
production units (the modern corporation).
3. The size of the working class (both blue-collar and
white-collar) constantly increases, as independent
artisans, small business people, and family farmers
(emphasis added) are driven out of business, and as
skilled workers lose their special position with the
advance of automation.
4. The emergence of huge, technologically advanced,
incredibly productive enterprises, alongside a working
class unable to purchase all the commodities it
produces, contributes to an inexorable pressure for
expansion and to an exaggeration of the tendencies
toward economic crisis... that have always attended the
market system.^
By using a synthesis of these two authors' explanations of
capitalism, this thesis will look at how well their explanations
describe the evolution of U.S. agriculture under a capitalist
system. Specifically, the following areas will be covered:
1. When using a Marxist analysis, the forces and relations
of production are key to understanding how a society is
transformed and synthesized. Chapter III of this thesi

will look at the forces and relations of production in
the history of agriculture in order to provide insight
into the evolution of agriculture to its present state.
This chapter will point up the conflicts between the
various classes as agriculture becomes more complex over
time. By pointing up these conflicts, we can begin to
understand not only how these roles evolved due to the
modernizing of the various forces of production, but we
will also see how U.S. capitalism has perpetuated the
exploitation of the farmers in U.S. agriculture.
2. Chapter IV of this thesis will outline in detail the
complex roles and class relationships that are involved
in present-day agriculture. This chapter will point up
the lopsided power positions of these classes in favor
of the large corporations and at the expense of the
small family farmer. As we will see, the U.S. govern-
ment has been a key factor in maintaining these rela-
tionships. At the end of Chapter IV, an analysis is
made as to how well Greenberg's consequences of capita-
lism is reinforced by the example of U.S. agriculture.
3. Finally, Chapter V will analyze the future of U.S.
agriculture based on the premise that capitalism will
continue to evolve. We will look at how certain myths
about U.S. agriculture need to be exposed in order for a
new, more rational future for agriculture to emerge, one
based on a socialist ideology.

Chapter I
1. Aloysius Ehrbar, "Facts vs. Furor Over Farm Policy," Fortune,
November 11, 1985, p. 115.
2. Gregg Easterbrook, "Making Sense of Agriculture," Atlantic
Monthly, July 1985, pp. 63-64.
3. Ehrbar, "Facts vs. Riror Over Farm Policy," p. 115.
4. Easterbrook, "Making Sense of Agriculture," p. 64.
5. James Aucoin, "Missouri Farmers on the Front Lines,"
Progressive, July 1986, p. 33.
6. For more information on dialectical materialism, see Ira
Gollobin, Dialectical Materialism: Its Laws, Categories, and
Practice (New York: Petras Press, 1986).
7. Immanuel Maurice Wallerstein, The Modern World-System:
Capitalist Agriculture and the Origins of the European World-Economy
in the Sixteenth Century (New York: Academic Press, 1974), p. 67.
8. Douglas F. Dowd, The Twisted Dream: Capitalist Development in
the United States since 1776 (Cambridge: Winthrop Publishers, Inc.,
1977), p. 35.
9. Ibid.
10. Ibid., p. 36.
11. Ibid., pp. 37-38.
12. Edward S. Greenberg, Capitalism and the American Political
Ideal (Armonk, New York: M.E. Sharpe, Inc., 1985), pp. 36-37.
13. Ibid.
14. Ibid., p. 38.

As indicated in the introduction, there are a number of ways
to explain the manner in which U.S. agriculture has evolved.
Keeping this in mind, it is necessary to review the literature that
has attempted to describe and analyze U.S. agriculture. This
literature can be divided into the analytical techniques or
approaches used by the authors. These analyses can be grouped as
1. Statistical
2. Egocentric
3. Monotypic
4. Global implications
5. Historical
These categories are not inclusive of every analysis done of
U.S. agriculture but represent the majority of the literature.
Statistical analysis is the technique used in most U.S.
government publications of the U.S. Department of Agriculture (USDA)
and many newspapers and periodicals. USDA statistical analyses
entail the documentation of the raw data from the various USDA
agencies and other sources, and then provide summaries of the
ramifications of these data in very general terms that reflect the
attitudes of the administration in charge during that period of

time. For example, the 1986 Yearbook of Agriculture gives a summary
of the benefits of agricultural research programs, an area in which
the USDA has allotted significant money and personnel.*
Understandably, these government publications represent tons
of documents since the founding of the USDA. There are 28 bureaus
in the USDA that report to the Secretary of the Department. Each
bureau specializes in certain areas; such as, soil conservation or
commodity programs. These materials are targeted for farmers and
nonfarmers alike. In fact, U.S. government statistics are cited by
many authors as foundations for their own analyses. It is also
important to realize that U.S. agricultural statistics play a
significant role in the setting up of new farm programs and
ultimately affect the market price that farmers receive for their
Another important governmental source of statistical data
and other studies is the Congressional Record. There are hundreds
of volumes of Senate and House hearings on bills relating to
agriculture. For example, in 1957, a Senate hearing was held on the
United States activities with other countries under Public Law 480
(a topic to be discussed in detail later in this thesis).^ The
bibliography to this thesis provides a partial listing of government
publications relevant to this thesis which furnishes the reader with
a sampling of the number of materials available.
Regional newspapers, such as the Des Moines Register and the
Kansas City Times, and national newspapers, such as the Wall Street
Journal and the Christian Science Monitor, are also valuable sources
of statistical analyses and editorial commentaries about the daily

occurrences in agriculture. In addition to giving local statistical
data, regional newspaper analyses usually reflect a sympathetic
attitude to the farmers' plight and criticize the administration's
handling of agricultural programs. For example, many editorials in
the Des Moines Register and the Kansas City Times comment on the
agricultural situation.^ On the other hand, national newspapers
provide national statistics and offer analyses on national implica-
tions of the changing agricultural situation.^
Farm organization publications represent the second source
of analysis. These publications are egocentric in that they reflect
and justify the attitudes of their membership. Agricultural organi-
zations began to organize at the local level between 1830 and 1870.
In the late 1800's, because of agrarian unrest, these organizations
took on a more political nature. In 1867, a significant organiza-
tion, the National Order of Patrons of Husbandry, commonly called
the Grange, was established. Other organizations that were
established thereafter include the Farmers Alliance (the name was
used by several organizations) which began in 1873, the National
Farmers Union (1902), the Nonpartisan League (1915), and the
American Farm Bureau Federation (1918).
When first established, these organizations were intended to
act against the perceived oppression of farmers by the railroads,
banks, Wall Street monopolies, and the government. They worked
actively to change the system and moved into the area of politics
most notably in the late 1800's and early 1900's.
The tone of this literature became less inflammatory in the
early 1900's, but again in the 1920's, these organizations united to

back legislation that advocated government intervention to aid the
farmers. Certain militant organizations also existed in the 1930's,
such as the Farmers' Holiday Movement whose one objective was to
disrupt massive foreclosures, among other objectives.^ This
militancy disintegrated after the New Deal legislation to be
replaced by the fraternal activities associated with these groups
today. The development of these groups will be looked at in greater
detail in Chapter III of this thesis.
The publications of these groups reflect similarities in the
following areas:
1. All support the sanctity of the family farm.
2. They believe property rights are essential to the
preservation of individual freedom.
3. They share the belief that farmers need an equitable
return on farm resources through a "free enterprise"
economic system.
Most publications, even at the present time, attempt to
reinforce members' beliefs in these and other basic tenets, but
emphasize the use of influence only within certain appropriate
parameters (letter writing, support of certain candidates, etc.).
However, since the 1970's some farmer organizations are advocating a
more nonconventional approach to changing the current systan. These
groups include such organizations as the American Agriculture
Movement, the North American Farm Alliance, and the National Save
the Family Farm Coalition. Their publications reflect their
dissatisfaction with the current system and advocate activities to
unite farmers to fight that system. Some farmer organizations are

becoming involved with labor groups, as they are realizing their
"friends are working people, labor, and minorities, not the Chamber
of Commerce, the Cargills, or the Bunges." The alignments of the
past seem to be fading with this new form of advocacy.
Monotypic analyses has been used by writers with both
conservative and liberal world views. In describing this type of
analysis, the writers focus in on a particular aspect of U.S.
agriculture, such as agricultural economics or agribusiness
activities, and draw conclusions based on their world view of the
situation. Examples of these monotypic analyses follow and are
usually published in books and scholarly journals.
Agricultural economists, such as Luther Tweeten and Don
Paarlberg, have written microeconomic analyses of American agricul-
ture. This type of analysis is usually conservative in its
viewpoint and in describing these writers, Edward Greenberg states
that those who ascribe to the free-market conservatism explanation
believe that "the proper function of government is that of protector
of individual rights, enforcer of the rules of the free market and
guarantor of public order.Because they feel strongly about these
functions, these writers stress that the economic development of
U.S. agriculture is directly related to the Jeffersonian philosophy
of an atomistic, independent ownership pattern for agriculture
flourishing in a "free- market" society with a limited governmental
role. At the heart of this economic system lies the concept of
laissez faire which Luther Tweeten describes as follows:
Its origins (are) in the philosophy of John Locke, which
emphasized that the ideal world lies in the natural order of no
collective restraints on individual action, and in the

the utilitarian philosophy of Adam Smith, whereby economic man
because of his acquisitive instinct, is led to Utopia by the
invisible hand of the perfect market.
Because these writers themselves believe in these basic
ideas, their description of U.S. agriculture reflects their attitude
of how agriculture has been transformed from its "free market"
origins (the most favored position) to a government-sponsored
distortion of agriculture.
Recent articles and books have looked at the previously
undocumented activities of the various groups involved in agri-
business. The concept of "agribusiness" is a fairly recent one and
the agribusiness sector is composed of livestock and crop producers
(large-scale farmers); suppliers of agricultural services,
chemicals, fertilizers, petroleum, farm machinery and equipment, and
motor vehicles (agricultural supply businesses); and processors of
food, tobacco manufacturers, and manufacturers of fabrics and
apparel (agricultural processing). Agribusiness also includes the
boards of trade and stock exchanges that deal in commodity futures
plus those international firms that export grain to other coun-
tries. In other words, the concept of agribusiness includes a look
at the many integrated aspects of agriculture, not just the direct
production of food by large-scale operators. It is important to
note that small, largely family-owned farms are not usually included
in the concept of agribusiness.
Due to the enormous complexity of agriculture today and the
numerous actors involved, more and more writers are attempting to
describe the activities and interactions of these businesses. These
writers usually reflect a more liberal (reformist) viewpoint. Many

authors are highly critical of the systan but do not advocate
revolutionary change. Two books of particular importance in the
area of the multinational firms involved in agribusiness are
Merchants of Grain by Dan Morgan and A Poor Harvest by Richard
Gilmore. Jim Hightower, in his book Hard Tomatoes, Hard Times,
points out how USDA-sponsored research, particularly on agricultural
technology, contributes substantially to the growth of agribusiness
at the expense of the small farmer.
The fourth type of analysis, global implications, attempts
to step away from viewing agriculture in a microeconomic sense and
instead looks at U.S. agriculture from a macroeconomic or global
sense. These books view U.S. agriculture as part of a global crisis
of food distribution, environmental degradation, and other catas-
trophic problems associated with modern U.S. agricultural policies
and methods. These books include titles such as Farming for Profit
in a Hungry World: Capital and Crisis in Agriculture by Michael
Perelman and How the Other Half Dies: The Real Reason for World
Hunger by Susan George.
The authors of these books tend to be highly cricital of the
ramifications of profit-oriented rather than socially oriented
farming activities in the United States. They believe these activi-
ties have been detrimental to the health and welfare of people
around the world. These authors reflect a more radical (vs. liberal
reformist) attitude towards solutions to the problems of world
hunger. They feel that we must completely change the method of
distribution of food to the world.

The final form of analysis, historical analysis, is of most
relevance to the approach of this thesis. Certain conservative
authors have undertaken a form of historical analysis within the
limited framework of the linear thought described in Chapter I.
These authors include Willard W. Cochrane of the Department of
Agriculture and Applied Economics of the University of Minnesota;
Don Hadwiger and Ross Talbot, Professors of Political Science, Iowa
State University; and Paul W. Gates and Fred A. Shannon, economic
historians. This type of analysis has a wealth of chronological
data on American agriculture and tries to identify and investigate
the "driving forces behind the agricultural development" in U.S.
history.^ Besides giving an enormous amount of historical data,
these analyses do have the merit of providing the foundations for
constructing and testing other economic/political models. This
thesis makes reference, especially in Chapter III, to the historical
information provided in these works.
As this chapter points out, the evolution of U.S. agricul-
ture can be investigated and analyzed by many different techniques
and viewpoints. This thesis, after reviewing and incorporating much
of the data from these sources, will use the Marxist historical
analysis described in Chapter I which has been lacking in the study
of U.S. agriculture. The validity of this analysis will be tested
in each subsequent chapter with the intention of providing the
reader with an alternative interpretation of the evolution of U.S.

Chapter II
1. U.S. Department of Agriculture, 1986 Yearbook of Agriculture:
Research for Tomorrow (Washington, D.C.: Government Printing Office,
2. U.S. Congress, Senate, Committee on Agriculture and Forestry,
Policies and Operations Under PL 480 Hearings, 85th Cong., 1st
Sess., 1957.
3. James Flansburg, "Advice to Angry Farmers: Don't Demonstrate,
Organize," Des Moines Register, February 5, 1978, p. 2B, and
"Caution on Corn," The Kansas City Times, February 16, 1978.
4. Wendy L. Wall, "Farm Economy May be Near End," Wall Street
Journal, June 6, 1986, p. 6.
5. Luther G. Tweeten, Foundations of Farm Policy, 2d ed., rev.
(Lincoln: University of Nebraska Press, 1979), p. 80.
6. Peter Downs, "Seeds of Discontent," Progressive, July 1986, p.
7. Edward S. Greenberg, Capitalism and the Americal Political Ideal
(Armonk, New York: M.E. Sharpe, Inc., 1985), p. IT!
8. Tweeten, Foundations of Farm Policy, p. 4.
9. Willard W. Cochrane, The Development of American Agriculture: A
Historical Analysis (Minneapolis: University of Minnesota Press,
1979), p. 429.

When one examines the historical progression of U.S.
agriculture, the following capitalist characteristics as described
by Dowd surface:
1. U.S. agriculture goes through tremendous expansion as
pioneers progressed from the east coast to the west
2. In the conflict between the classes, the farmer becomes
the exploited class.
3. The U.S. government favors the exploiting classes by
various legislative acts. However, the U.S. government
also steps in during the Depression of the 1930's to
help the exploited class, the farmers.
This chapter, by examining the forces and relations of production,
will substantiate Dowd's characteristics, as well as provide a new
interpretation of historical data.
From its beginnings in the U.S., farming has utilized one
vital characteristic of capitalism; that is, faming has depended on
expansion (both in an economic and geographic sense). When settlers
came to this country, the potential for expansion was virtually
limitless. One of the first issues to come up in the new Congress,
for example, was territorial expansion.

For the most part, the sale of public lands in the U.S. was
made in large units and for cash. Therefore, most land was sold to
land speculators who, in turn, sold parcels to the farmers at a
higher price and on credit. This distribution of the public domain
would remain a preeminent political issue during the late 1700's to
the raid-1800's.
One of the first relationships in agriculture, then, was
between the small subsistence farmer and the land speculator. The
land speculator tried to make profits by providing credit to farmers
to purchase land. The government's method of disposal of the public
domain favored these land speculators, as mentioned above, because
most of the land was sold in 640-acre units, which even at $1.00 an
acre was too expensive for most farmers at the time. If the farmer
defaulted, the land speculator would regain the land and sell it to
another farmer. This type of land speculating lasted until around
1820 when a new law made it easier for the small farmer to buy
directly from the government. This law set the minimum amount of
land purchasable at 80 acres and at a price of $1.25 per acre. This
new law helped those farmers who did not already own land, but by
then large tracts of land had been sold to land speculators, who in
turn, had sold the land to farmers on contract. As we shall see,
these land speculators' roles would increase in the 1800's.
While this westward expansion was occurring, another set of
relationships was being established among groups because of the new
Constitution. Because people involved in agriculture composed the
majority of the population, they became part of this alignment of

political forces. The division began shortly after the American
Revolution. Groups began to see how they were affected by the new
laws of the land and whose interests were favored under the Articles
of Confederation.
Under the Articles of Confederation, Congress had no control
over currency or banking. Each state was individually responsible
for its banking and currency and dealt differently with the issues
of tariffs and taxes. This fact worried the large-scale property
owners and large merchants who were trying to protect their economic
interests and who felt at the whim of what they believed were too
egalitarian efforts by the States to treat everyone fairly. The
alignments that grew, then, fell into two distinct camps: the camp
of the large-scale (often absentee) property owners and merchants
involved in trade, land promotion, and banking and the camp of the
debt-ridden small property owners (farmers, artisans, and shop-
keepers) .
Because of the high debts that small property owners
incurred following the Revolution, many could not repay their debts
and were imprisoned or foreclosed on. Debtors at first called for
settling by arbitration. Later, they called for State-induced
inflation by issuance of currency so that debts could be repaid more
easily. Finally, more drastic action was taken throughout New
England including destruction of produce, market strikes, legisla-
tive intervention and occasionally armed revolt and violence. The
height of the confrontations occurred in 1786 when approximately
5000 people, mostly farmers, were in open rebellion in Massachu-
setts. This rebellion was called Shay's Rebellion after a

contingent lead by Daniel Shay. Carl Taylor wrote the following
regarding the rebellion: "Although debtors of all kinds were among
Shays' troops, it was primarily a farmers' revolt against debts,
taxes and low prices.
The Constitutional Convention of 1787, however, bowing to
the large property holders, adopted articles that would, as pointed
out by Greenberg, call for a strong central government, create the
political preconditions for a stable business system, and place
restraints on the political power of majorities.^ Thus the ground-
work was laid that disadvantaged the small farmer, because at this
early stage in the political development of the U.S., policies were
enacted that would handicap the efforts of farmers to be truly
independent decision-makers. Also, as Dowd has summarized in his
points about capitalism, the U.S. government was beginning its
oligarchic tendencies by giving advantages to large property owners
while disadvantaging the farmers.
In the area of the forces of production during this period,
the farmer was operating only at a subsistence level. The virgin
land had to be cleared and cultivated, and it would take many years
before even 10 acres could produce any more than subsistence.
Bartering helped the farmers get the supplies they needed. The
mechanisms for marketing any surplus grain had not yet been put into
place. It was in these austere beginnings that the concept of the
"independent, industrious" farmer was born. This image would remain
and be romanticized even today.
The relations and forces of production began to evolve to a
more complicated level by the mid-1800's. More actors began to

enter the picture. Markets became established for the grain trade,
and shipment of grain was made possible by the steamboat and the
canal system that grew tremendously during the period 1820-60. More
importantly, the railroad system became a grain shipment system
during this time. Technological innovations, including the reaper,
plow, and thresher, helped revolutionize the farmer's method of
operation. All these mechanisms came into widespread use at about
the same time because advances in farming operations in one area
usually meant advances in other areas to reduce bottlenecks in the
production process.
One force of production that became prominent during this
era would be of particular significance in changing the relations of
production as they concerned not only agriculture but also the
nation. This innovation was the cotton gin, invented in 1793 by Eli
Whitney. The cotton gin revolutionized how cotton was processed,
but it also involved the labor-intensive work of slaves who picked
the cotton. Therefore, it helped solidify the South into a slave-
holding, plantation society. Before the invention of the cotton
gin, slavery was actually on the decline in the Upper South.^ This
invention, coupled with an expanding market for cotton in Europe,
reversed the trend. Exports of cotton stood at 21 million pounds in
1801, increased to 128 million pounds in 1820, and then shot up to
almost 1.8 billion pounds in 1860.^
In terms of agriculture, this invention helped create a rift
between the farming practices of the North and West and those of the
South. The cotton plantation's operations were labor intensive

while farming practices elsewhere were becoming more and more mecha-
nized. Inevitably, farmers' identities also became diversified.
The ownership of slaves helped to fuel the growing rift in these
Each region began to take on its own character. As
mentioned earlier, the South was slow to mechanize its farming
practices because of the social system that revolved around
slavery. In other parts of the country, mechanization created
surpluses or in some cases specialization in certain crops. For
example, during the period 1820-60, the region lying north of the
Ohio River and stretching from Ohio to Iowa became the leading
surplus-producing region for grains in the United States.^ With the
demands for dairy products, poultry products, vegetables, etc. in
the growing cities in New England and the Middle Atlantic, farmers
from those regions shifted from general to specialized farming to
cater to those demands. By the mid-1850's, then, each region of the
United States was broken into specialized areas of production.
This diversification of production is a significant event in
the history of American agriculture. Farmers could no longer be
seen as one cohesive group that handled their social and business
relationships all in the same manner. The forces of production that
were changing during this time were having their effect on the
social relations in agriculture. This difference in identities by
region would be of importance later when the farmers were trying to
unify for political action in the late 1800's. Thus we see that
regional factionalism was creating significant divisions in the
forces of production.

In the mid-1800's legislation was enacted that would fuel
the expansion of agriculture further west. This law was the
Homestead Act of 1862. Under the law, any person could file for 160
acres of unappropriated land if he or she was an American citizen,
or had filed his or her intention to become a citizen; was twenty-
one years old or was the head of a family; or had served fourteen
days in the army or navy of the United States; and had never fought
against the United States.^ This last provision was intended to
exclude Southerners who had served in the Confederate Army. A
special feature in the law allowed large landowners, especially
cattlemen and timbermen, an easy method of obtaining valuable land
at a very low price.
The consequences of the law proved dramatic for the expan-
sion of agriculture, but more importantly, the disposal of land
during the period of the Homestead Act proved to be a coup for the
land speculators, the states, and the railroads. According to
Willard Cochrane, 500 million acres of public domain were disposed
of between 1860 and 1900. Of that total only about 80 million acres
were distributed under the Homestead Act. Some 108 million acres
were sold by auction, usually to land speculators, and the remaining
approximately 300 million acres were given as grants to the States
and the railroads, who in turn sold much of the land to land specu-
lators ^
These facts are important when one realizes that most
farmers, in order to secure their land, had to go into debt to do
so. The owners of the land, the capitalist land speculators, were
reaping tremendous profits from the small landowners and businesses

who owed money to them for land purchases. As has been shown, the
U.S. government through its land disposal system and policies,
favored land speculators over the small farmers. Greenberg speaks
of the role of government as an instrument of the dominant class and
certainly in the case of the Homestead Act, this role seems to be
true ,8
When looking at this land disposal systen in the United
States, it becomes immediately apparent that the actors involved
were either exploiters or exploited, one of the key characteristics
of capitalism as mentioned in Chapter I. If one had enough capital
to buy huge chunks of land, enormous profits could be reaped by
subdividing the land and selling it to farmers. To conservative
thinkers, such as Willard Cochrane, this exploitative relationship
was not necessarily a bad one for economic growth. He writes:
In the judgment of the author the results of the land
disposal process in terms of the agricultural economy and the
national society were goodnot perfect, but good.9
In the eyes of the capitalist, indeed, the relationship was
a good one. Contrary to Cochrane's statement that the land disposal
policies of the United States resulted in farms that were owned and
operated by the family residing there, the majority of the farmers
were either in debt to the banks or speculators or they were tenant
farmers. The majority of the farmers did not own their property
outright. The 11th Census of the United States (1890) reports three
types of farm family proprietors. Tenant families comprised 34.08%
of the total, 18.60% were owners "under incumbrance", and 47.32%
owned "free of incumbrance."^ For m0st of the 19th century,
absentee owners, land speculators, and other creditors were the

majority owners of the most significant force of productionthe
Now that the land disposal system in the United States has
been outlined and analyzed, it is necessary to understand the
complexity of the marketing of agricultural products. As noted
earlier in this paper, since farmers were operating at a subsistence
level up to this point, farmers did not begin to create enough
surplus to sell until the middle 1800's. However, due to techno-
logical advancements limited to cotton and tobacco production, these
products were exported to Western Europe in the early 1800's.
Because of the increased volume of agricultural products on the
market and the size of the markets, specialized middlemen became an
integral part of the relationship between buyer and seller. In the
cattle industry, for example, the drovers were the middlemen,
whereas in the grain industry, merchants served as middlemen who, in
turn, sent the grain to millers for processing.
Commodity exchanges became part of the middlemen system, in
that these exchanges were institutions where commodities were bought
and sold for future deliveries. These exchanges acted as specu-
lators between the farmers and dealers, with the end result being
stabilized prices for grain. In 1848, the Board of Trade was
established in Chicago for the trading of grains in a formal central
market. Once these exchanges came into existence, a grain farmer
would take his wheat to the elevator, and receive the current price
quoted, for example, on the Chicago exchange, less the cost of
transportation to that market. As technology advanced, other

exchanges were started to handle other commodities, such as eggs,
dairy products, and vegetables.
Middlemen became more and more diversified as time and
technology advanced. Warehousemen, jobbers, and brokers all became
intermediaries between the farmers and the markets. By 1840, the
distribution of agricultural commodities involved 3000 firms in
domestic trade and 58,000 retail stores.^
The growth of the middlemen industry meant fanners' loss of
control over their product. Gilbert Fite writes about the farmers'
position at the end of the 19th century as follows:
Why did farmers find themselves in a condition of economic
disparity? The main reason for their unfavorable economic
position was that they had little or no control over the price
they received for their products or what they paid for nonfarm
goods. When they took their crops and livestock to market, they
had to take a price set by others. That price was determined by
general market conditions and had no relation to the need of
farmers for a price that would cover production costs and
profits. Indeed, those who established farm prices were
concerned with profits for the purchaser, not the producer.^
The overwhelming evidence, then, proves that in these
relationships of middlemen and land speculators (capitalists) with
the farmers (workers), the farmers were the oppressed and manipu-
lated class. Charles Boone outlined this manipulation about one
hundred years ago, in a meeting of fellow Illinois agriculturalists
by stating that the farmer "was an overproducer because he wanted to
get out of debt. But when he produced the extra quantities, they
depressed the prices and kept him in debt still."13
This limited power can be traced to the notion of the
"independent farmer" in U.S. agriculture. Fred Shannon describes
the characteristics of the independent farmer as follows:

If producing for the market, the fanner was utterly depen-
dent on many forces outside his single effort to control, yet he
remained an incurable individualist. He might band with his
neighbors in a log rolling, husking bee, or threshing crew, but
only when this form of cooperation had proved indispensable to
himself. He formed squatters' rights associations to curb the
grasping activities of land speculators. He engaged in rent
riots, Shaysite revolts for monetary reform, and vigilante
groups to suppress horse stealing. He joined local or national
parties for free land, greenbacks, free silver, railroad legis-
lation, restrictions on bankers, brokers, and middlemen, and for
myriad other minor objectives all calculated to bring back lost
prosperity or create it where it never before existed. But each
time an end was gained or definitely lost he slipped back into
his wonted habit of dependence on himself and nature.^
He further states:
There were varied reasons for this traditional individu-
alism, and none was more potent than the farmer's bafflement
when confronted by natural forces. He was in perpetual conflict
with a climate he could not conquer and soils that he seldom
Because of this independent decision-making, overproduction
is a marketing problem for farmers. In a good year, almost everyone
produces a good crop and commodities flood the market. Since the
market reacts by lowering the prices paid, the farmer is detri-
mentally affected by his high yield. The cycle continues with each
farmer trying independently to improve his lot by producing more to
sell because of this reduced price. Ultimately, these independent
farmers become trapped in a no-win situation because of their
limited power in the marketplace and in the political arena where
the farmer, as an individual, has no power to change existing
conditions. On the other hand, those capitalists who control the
marketplace benefit from this overproduction because they have the
power to manipulate the system to their advantage.
By the 1860's, the situation in agriculture had gotten so
bad for the farmers that they began to organize against their

perceived oppression. This attempt to organize was the first true
unity effort since the Shay's Rebellion of the late 1700's. Farmer
organizations up to this point in history were primarily local
social groups. The first group to be established with the stated
purpose of actively improving the farmer's lot was the Patrons of
Husbandry, also called the Grange, which was established in 1867.
The Grange had two objectives: (1) to enact legislation in
the states for the regulation of the railroads, and (2) to establish
marketing, processing, manufacturing, and purchasing cooperatives
for its members. Some authors maintain that the Grange failed in
both areas to gain better control of agriculture by farmers.
Others, such as Fred Shannon, believe that Grange efforts at rail-
road regulations had limited success in controlling freight costs.^
The reasons given for the revolt by farmers have been
varied, depending on the perception of the author, of where the
problems arose. Willard Cochrane maintains that the "basic farm
problem was overproduction" and the "farm prices and farm income
lagged and dragged because of it."^ Along with this economic
problem, he maintains, farmers were battling enormous physical
hardships that overburdened their capacity to recover from produc-
tion fluctuations. John Schlebecker claims that "farmers suffered
from their inability or unwillingness to adjust to changed circum-
stances."1 Douglas Dowd states that after the Civil War, farmers
"were faced with sharply falling prices, with monopolistic railroads
and commission merchants, and with monetary and tariff policies cut
to the needs not of the farmers but of industrialists and finan-
ciers .

From a class analysis standpoint, the revolt by the
farmers should be looked at as a response to the oppressiveness of
the capitalist class towards the workers (in this case, the
farmers). When the oppression became too great, the farmers united
to take action against their perceived oppression. However, an
important point is that the revolt worked within the system to try
to change the established relationships. The rebels never disputed
the system of marketing grain, but sought to gain a larger piece of
the profits from the sale of the grain. The best that the rebels
could hope for, then, was a more favorable return for themselves,
but the established relationships would prove difficult, if not
impervious, to change. Because the farmers were in a very weak
position, even when united, their solidarity, by itself, would not
change the entrenched system. As noted earlier in this paper, the
solidarity of the farmers was tenuous at best, and when arguments
would arise between the northern and southern farmers, their unity,
and with it the headway that the movement had gained, was seriously
The Grange represents only one of several farmer organiza-
tions that arose during the period. The Farmer Alliances, a name
used by a number of independent farm organizations, began in 1873.
At their strongest, the Farmers' Alliances had about 4 million mem-
ber farmers.Most of the farmer organizations had modest inten-
tions for change when they began. Farmer organizations started
cooperatives to try to gain better control over the selling of
grain. They attempted to manufacture their own farm supplies and
purchase farm necessities wholesale to cut their costs of

production. Some organizations created cut-rate insurance plans for
their members and provided limited credit. Increasingly, however,
the organizations grew impatient for economic reform and decided to
become more politically active (except for the Grange, whose consti-
tution prohibited political action). The Alliances' activities
ultimately culminated in the joint effort with the Knights of Labor
and other groups to support the Populist Party. The Populist Party
stood for a national currency issued and managed by the Federal
government, the free coinage of silver, a graduated income tax,
government ownership and control of the railroads and telegraph
lines, and the abolition of land monopolies.21
By joining with other interest groups and with the Populist
Party, farmer direct interests became secondary to larger issues of
concern to more groups. Farmer concerns were further buried vhen
the Populists merged with the Democratic Party to support William
Jennings Bryan for President in 1896. By compromising their ideals
with the lofty ideal of gaining political power, farmer organiza-
tions ultimately surrendered any political leverage they may have
Another significant historical occurrence contributed to the
disintegration of the agrarian revolt and the Populist Party
ideals. After the elections of 1896, general prosperity began to
return with more credit available to farmers. The prices of farm
products began to rise and hopes for better returns were renewed.
Fred Shannon writes the following summation of the break-up of the
Populist Party:
In fact, the underlying principle of Populism wa9 that the
people, not the corporations and men of wealth alone, should

control the government, and that the government should suppress
the tendencies of the plutocrats to exploit the poor.... But the
mass of the Populist voters brooded over these matters only when
their expenses exceeded their incomes. They sought no funda-
mental social and economic reorganization. They wanted higher
prices for their crops, and after 1900 they were getting them.
Now that their main grievances were allayed, they were content
once more to worship at the old altars.
The time of agrarian protest was followed by relative
prosperity for the farmers. Following those years, the period of
1910-14 was considered the Golden Age of American Agriculture.23
Farm product prices were high and credit became more easily attain-
able. Predictably, thoughts of reform by farmers fell by the
wayside as hopes for better times were renewed. Again, the farmers
began to buy land on credit because grain prices were relatively
high and they hoped to cash in on better times.
The general perception at this time was that capitalism was
working at its best for everyone. Editorials proclaimed the general
feeling of optimism and wrote that the "usually discontented farmers
were happy.The forces and relations of production seemed to be
working harmoniously, and World War I helped to keep farm product
prices high. In addition, the purchasing power of farm products was
at an all time high and many future agricultural programs would use
the years 1910-14 as parity years, those years vAien farmers received
a fair value on their products.
When World War I ended, farm prices began to fall beginning
with the summer of 1920. Within one year, the price per bushel of
wheat fell from over $2.00 to under $1.00 and the overall level of
farm prices fell by almost one-half.25 The value of agricultural
exports fell from a high of $4.1 billion in 1919 to $1.8 billion in

1922. A low point was reached in 1932 when agricultural exports
dropped further to $662 million.^
Since the relationships of production had not changed, the
first to suffer from a'change in economic conditions were the
farmers. Wildly fluctuating markets and the unavailability of
credit proved to be a double-edged sword for farmers. An effort was
made in the early 1920's for cooperative buying and selling of
agricultural products which was spearheaded by a California lawyer
named Aaron Sapiro. This nationwide effort had as its objective,
control over the market by the farmers themselves, through a unified
effort. The effort eventually failed, once more the victim of the
farmers inability to unite effectively to improve their common lot.
Other efforts were made during this period by farmer organi-
zations to improve their bargaining positions. These organizations
included the Farmers' Union, the Equity, and the Nonpartisan
League. The Nonpartisan League in particular focused on the govern-
ment as an instrument for farm relief.
Eventually, due to the desperate straits of the fanners
during the early 1920's, the government finally stepped in to aid
the farmers directly. Legislative efforts were begun in 1921 to
address the farm depression. The debate in the Legislature was
intense as to the course of action for the Government to take. Some
legislators were opposed to outright government assistance, in-
sisting that cooperative marketing mechanisms be used to help the
farmers. The best-known legislative bills were the McNary-Haugen
bills that came before the Congress almost constantly between 1924
and 1928. Herbert Hoover was staunchly opposed to direct government

intervention into agriculture, and only after a change in adminis-
tration to Franklin D. Roosevelt was progress made to enact a farm
bill to cope with the enduring farm depression. This farm bill wa9
the Agricultural Adjustment Act of 1933.^7
The Agricultural Adjustment Act authorized the federal
government to enter into agreements with farmers to control produc-
tion by reducing acreage devoted to key crops, to store crops on the
farm and make payment advances on them, to enter into marketing
agreements with producers and handlers in order to stabilize the
product prices, and to levy processing taxes as a means of financing
the crop reduction program. The purpose of all these measures was
to raise farm prices to parity, as mentioned earlier in this paper.
This farm bill, especially in its modified form as the Agricultural
Adjustment Act of 1938, has endured as a basis for successive
federal agricultural farm bills.
The stepping in of the Federal government in the 1930's to
help the oppressed farmer class is an excellent example of
Greenberg's description of the function of government in capi-
talism. He states:
Government is, then, both the expression of the basic
tension in the social relations of production derived from class
division, and the instrument necessary to ease that tension and
to prevent the full expression of the class struggle. Govern-
ment becomes a principal instrument in perpetuating the overall
system, the provider of the conditions for continued produc-
tion. Though it is at all times either the direct instrument of
the economically dominant class or the protector of class
society in general, government masks this domination by speaking
in universal and general termsby speaking for and acting in
the name of the "general interest" of the whole society and all
of its classes.
Using this agrument as a basis, you can say that the
Agricultural Adjustment Act was enacted to help the farmers to cope

with their oppressed class position by giving them direct financial
aid, disguised as production reduction. By doing so, the farmers
were appeased and became less likely to try to disrupt the power
relationships that had become entrenched in the system. As noted
earlier, when the farmers protested in the 1800's, the system never
was challenged, only the apportionment of the wealth. In this
respect when the government stepped in to help the farmers, the
government never tried to change the agricultural marketing system
or the basic power relationships. It sought only to deal with the
outward symptoms of the problem by aiding the oppressed class in the
relationship, the farmers.
The result of this new farm legislation, plus the revolu-
tionizing effect of the forces of production at the time, accen-
tuated the problem of overproduction. This overproduction, besides
being detrimental to farmers, also meant that too much agricultural
production had to be absorbed into the current systen of agricul-
tural export. The effect of this overproduction was a depression of
farm prices to the extent that the government had to set a floor or
"target" price to give the farmer some type of guarantee of a return
on his labor. The government, in turn, through its Commodity Credit
Corporation, became a warehousing agency for large surpluses of
agricultural products that had been turned in by farmers to repay
their loans.
With the outbreak of World War II, many farm youths entered
the armed forces, and millions more farm people went to work in
industrial plants, causing a rapid decline in farm population once
again. It has been estimated that between April 1940 and April

1944, nearly 5.2 million farm people of labor force age left their
farms (approximately a 22.4% drop).29 Many never returned to the
farm. For those who remained on the farm, the 1940's proved to be a
golden age after the 1920-30*s depression. The weather improved
significantly and mechanization, fertilizers, and pesticides all
combined to produce a series of bumper crops despite the declining
farm population.
By 1949, however, the boom in farming began to ebb with a
surplus of grain. Predictably, prices received by farmers for their
commodities declined and increased support activity became neces-
sary. With that turning point, farm legislation has become
increasingly complex as the goverranent has ineffectively tried to
meet farmers' needs by fluctuating policies to respond to the
imperfect supply and demand of the market. Since the farm bills of
1933 and 1938, there have been numerous farm bills put into effect
by Congress to respond to changed farm conditions that were directly
or indirectly a result of the previous farm legislation. The cycle
continues to this day, with each farm bill becoming even more
complex than the one it succeeded.
In a summary of the history of agriculture, we have seen how
the relationships of production have been set up and imbedded in the
system of American capitalism. A class struggle has persisted in
this history, whereby the basic worker, the farmer, has tried to
improve his standing in the power relationships. The farmers,
unable to organize effectively to control their own class activi-
ties, have continually turned to the government for relief.

When the farmer was in the worst economic condition, he was
easily persuaded to follow mandatory programs in the hopes of
improvement. With the passage of the Agricultural Act of 1956 and
its Soil Bank features, the farmer was further induced, through the
substantial incentive payments, to retire land and to cut back pro-
duction voluntarily. However, the farmers have became less respon-
sive to government programs without monetary incentives because they
do not see their lot improving over the long run. They have rea-
lized that the government has been unable, just like the farmers, to
gain control over a market that does not respond to the old laws of
supply and demand. Since 1950, then, increasing numbers of them
have left farms in an unstoppable urban migration. As of 1978, the
farm population was less than 8 million, or only 3.7% of the total
U.S. population.30
Looking back, then, at the historical process of agriculture
in the United States, one can realize how agriculture has fit the
mold of American capitalism. In his book Farming for Profit in a
Hungry World: Capital and the Crisis in Agriculture, Michael
Perelman draws an excellent conclusion about the history of U.S.
agriculture. He writes:
This history of agriculture in the United States is not just
a sequence of larger and larger machines; it concerns the
complete restructuring of society according to the needs of
business. For more than a century, government, business, and
the university threw their combined weight behind this restruc-
turing. In place of families who grow their own food, we see
farmers under the control of processors and banks, wives
standing in supermarket lines, and workers risking their lives
in pesticide factories or fertilizer mines. Each has a
prescribed role.31

Mr. Perelman indicates that U.S. agricultural history fits
neatly into the capitalistic molding of fanners' roles to fit into
the prescribed model which the capitalists have formulated.
The transformation was not willingly endorsed by the
farmer. Rather he was part of a process over which he had less and
less control. From truly independent beginnings, the farmers in
today's capitalism have become subservient and dependent on a system
of regulations and controls. The agricultural mainstay, the fanner,
has become integrated and co-opted into U.S. capitalism. The next
chapter will summarize in detail the complex systan of today's U.S.

Chapter III
1. Luther G. Tweeten, Foundations of Farm Policy, 2d ed., rev.
(Lincoln: University of Nebraska Press, 1979), p. 62.
2. Edward S. Greenberg, Capitalism and the American Political Ideal
(Armouk, New York: M.E. Sharpe, Inc., 1985), p. 58.
3. Willard W. Cochrane, The Development of American Agriculture: A
Historical Analysis (Minneapolis: University of Minnesota Press,
1979), p. 69.
4. Ibid.
5. Ibid., p. 73.
6. Ibid ., p. 81.
7. Ibid., p. 83.
8. Greenberg, Capitalism and the American Political Ideal, p. 41.
9. Cochrane, The Development of American Agriculture, p. 188.
10. U.S. Department of Interior, Census Division, Report on Farms
and Homes: Proprietorship and Indebtedness in the United States at
the Eleventh Census, 1890 (Washington, D.C.: Government Printing
Office, 1896), p. 26.
11. John T. Schlebecker, Whereby We Thrive: A History of American
Farming (Ames: Iowa State University Press, 1975), p. 130.
12. Gilbert C. Fite, American Farmers: The New Minority
(Bloomington: Indiana University Press,1981), p. 31.
13. William Appleman Williams, The Roots of the Modern American
Empire (New York: Vintage Books, 1969), p. 162.
14. Fred A. Shannon, The Farmer's Last Frontier: Agriculture,
1860-1897, vol. V: The Economic History of the United States TNew
York: Holt, Rinehart and Winston, 1945), p. 3.
15. Ib id., p. 4.
16. Ibid., p. 311.
17. Cochrane, The Development of American Agriculture, p. 94.
Schlebecker, Whereby We Thrive, p. 161.

19. Douglas F. Dowd, The Twisted Dream: Capitalist Develpment in
the United States since 1776 (Cambridge: Winthrop Publishers, Inc.,
1977) , p. 170.
20. Tweeten, Foundations of Farm Policy, p. 69.
21. Shannon, The Farmer's Last Frontier, pp. 317-328.
22. Ibid., p. 327.
23. Cochrane, The Development of American Agriculture, p. 100.
24. Walter Lord, The Good Years: From 1900 to the First World War
(New York: Harper and Brothers, 1960), pp. 2-3.
25. Cochrane, The Development of American Agriculture, p. 100.
26. Ibid.
27. Ibid., p. 140.
28. Greenberg, Capitalism and the American Political Ideal, p. 41.
29. Diana Reische, ed., U.S, Agricultural Policy, vol. 38: The
Reference Shelf (New York: H.W. Wilson Co., 1966), p. 52.
30. U.S. Department of Agriculture, 1978 Handbook of Agricultural
Charts, No. 51 (Washington, D.C.: Governnent Printing Office,
1978) , p. 34.
31. Michael Perelman, Farming for Profit in a Hungry World:
Capital and the Crisis in Agriculture (Montclair, New Jersey:
Allanheld, Osmun & Co., 1977V, p. 101.

The history of U.S. agriculture has been one in vrtiich the
odds have always been against the family farm surviving. Ironi-
cally, there has been much debate in the 1980's about the disap-
pearance of the family farm, usually pointing out the tragedy of
it. Family farming as an occupation is unique in U.S. culture, in
that most people would defend it as an honorable profession and one
worth saving. Therefore, most people cling to the myths about
farming as a nostalgic remembrance of a simpler, somehow better
Accompanying this nostalgia is the fear of what will
replace, or what has already replaced, the family farm as many
people are against the idea of corporate or worse yet, foreign
takeover of U.S. agriculture. For all this fanfare and rhetoric
about the loss of the family farm, change has already occurred that
will prevent U.S. agriculture from ever returning to its pristine
state. These changes are part of the picture of present-day U.S.
agriculture and will be described in this chapter.
In looking at the character of today's agricultural
industry, we see that it ha6 many interlocking characteristics,
making it difficult to pinpoint causes and effects. Rather, it is
necessary to understand that U.S. agriculture is part of a highly

complex social, economic, and political systen that makes up U.S.
capitalism. Such things as the declining number of farms and the
corresponding shift in land ownership, the growth of corporate
farming, the complexities of futures marketing, the growth and
secretive activities of the agricultural middlemen, and the
expanding role of government supports have changed the old picture
of agriculture into the highly complex system that now exists. When
one looks at these characteristics in detail, one thing that is
immediately apparent is the lopsided power relationship of the
various actors. At the conclusion of this chapter, a correlation is
made of Edward Greenberg's characteristics of the capitalist mode of
production as they pertain to U.S. agriculture.
In recent years, small farms have been absorbed into large
units at an astounding rate. In the area of land ownership, in
1978, a USDA report showed that of the 1,316 million acres of
privately owned land in the United States, 75% was owned by 5% of
the nation's landowners, or 1% of the entire adult population.^
Since the early 1980's, there has been an enormous shift in
the ownership of farmland due to the high foreclosure rate on U.S.
farms. At the present time (1987), approximately 7 million acres of
prime U.S. farmland is in the process of changing hands.^ This land
is becoming the massive land inventory of Government agencies,
commercial banks, and insurance companies. In an article entitled
"Farms Without Farmers," Osha Davidson outlines the following
breakdown of the control of this land inventory
(1) The largest holder is the quasi-governmental Farm Credit
System (FCS), which early in 1987 held two million

acres. It has begun to sell this land and FCS officials
have stated that of the 1987 land sold in Iowa alone
(some 100,000 acres), 26% of the sales were to
nonproducers who bought the land as an investment
because of its bargain prices.
(2) The Farmers Home Administration (FmHA) is close behind
in its inventory of farmland with 1.5 million acres.
Although provisions in the 1985 Farm Bill intended this
land to be sold to small and middle-sized family farms,
a loophole in Federal regulations has made it possible
for a large proportion of this land to be declared as
"surplus" and therefore available to the general
public. In the first quarter of 1987, 71% of land sold
by the RnHA was labeled "surplus."
(3) Insurance companies are investing heavily in farmland.
For example, Prudential now owns 800,000 acres in
eighteen states, making it the largest landholder in the
insurance industry.
(4) Foreign investors, especially the Japanese, are buying
U.S. farmland. However, the exact amount is nearly
impossible to trace since most foreign investors buy
through partnerships with American companies.
In a survey conducted by the American Bankers Association,
it was reported that approximately 141,000 farms were lost in 1986,
which represented a 50% increase over 1985.^ Of that amount, only
58% of the farmland sold was bought by farmers.

Nothing has caused greater consternation to family farmers
than the growth of corporate farming in the United States. By the
late 1970's, corporate farms accounted for only about 7% of total
food production.^ However, that number is steadily increasing as it
becomes less and less profitable for individual fanners to stay in
business and as the foreclosure rate continues to increase. The
corporations that do exist in farming largely control production in
certain areas. For example, 20 large corporations now control
poultry production. A dozen oil companies have invested in cattle
feeding, helping shift the balance of production from small Mid-
western feedlots to 100,000-head lots in the high plains of Texas.
Just three corporationsUnited Brands, Purex, and Bud Antle, a
company partly owned by Dow Chemicaldominate California lettuce
This new breed of conglomerate farmer does not just grow
crops or raise cattle. The corporate executives think in terms of
"food supply systems" in which they own or control production,
processing, and marketing of food. "Tenneco's goal in agriculture
is integration from seedling to supermarket," the conglomerate
publication reported to the stockholders.^ Because of its integra-
tion into many areas, Tenneco could boast of having the necessary
resources to achieve such a goal; i.e., $4.3 billion in assets from
such areas as oil production, shipbuilding, and manufacturing. The
conglomerates also benefit from a variety of government subsidies on
water, crops, and income taxes. For example, they utilize a variety
of federal tax provisions that permit them to benefit from tax-loss

farming and then profit again by taking capital gains from land
Along with these corporate farms, a new phenomenon, the
farm-management company, is making its presence known in U.S. agri-
culture. These companies often hire bankrupt farmers for hourly
wages to work the land they once owned. Osha Davidson indicates
that these companies control 62.6 million acres. This trend is
reminiscent of the times of the tenant farmers, except that in the
current case, the farmer receives wages.
The social and environmental impact of corporate faming has
greatly affected agriculture. To name only a few areas, once-
populous areas that had been occupied by independent small land-
holders with small rural service communities have been transformed
into "feudalistic" corporate estates.^ The continuous cropping
patterns of corporate farming has increased the mineral salinity of
the soil and prevented the natural revitalization of the soil which
crop rotation affords. The depletion of nutrients from the soil has
necessitated the ever increasing use of chemical fertilizers.
Because chemical fertilizers tend to dissolve rapidly and plants can
only absorb a portion of these nutrients, the chemicals, especially
nitrogen, percolate into the groundwater. The harmful effects of
these nitrates includes increased infant mortality rates and other
illnesses.Additionally, the salinity of fertilizers pollutes the
surface water, which is hamful to waterfowl and fish. Such disrup-
tion of the environment by this and other practices has just
recently come to the forefront of enviromental issues.

This negative environmental impact was foreseen by Marx as a
component of the evolution of capitalism. He writes:
Capitalist production, by collecting the population in great
centres, and causing an ever increasing preponderance of town
population, on the one hand concentrates the historical motive-
power of society; on the other hand, it disturbs the circulation
of matter between man and the soil, i.e., prevents the return to
the soil of its elements consumed by man in the form of food and
clothing; it therefore violates the conditions necessary to
lasting fertility of the soil. By this action it destroys at
the same time the health of the town labourer and the intellec-
tual life of the rural labourers.^
Corporate farming maximizes, in the short run, the profits
of these corporations and is in keeping with the capitalistic needs
for corporate growth.
Another factor which has had profound consequences on the
prices farmers receive in today's market is the futures commodity
market, as mentioned in Chapter III. The practice of forward buying
and selling began more than one hundred years ago, as a means to
protect owners of large stocks of perishable commodities from rapid
price changes between the time of purchase from the farmer and sale
to the processor. Now futures marketing is so complex and intri-
cate, only an elite group of traders and hedgers understand the
market, but their dealings strongly affect the prices farmers
receive for their products. The commodities market is not a neutral
institution which simply reflects the classic impersonal workings of
supply and demand for commodities. Rather, given low margin
requirements, the vulnerability of the market to rumors, and profit
maximizing by hedgers, especially when economic conditions are
unstable, its erratic operations have a profound effect upon
pricing, marketing, and even the choice of which crops to plant the

following season. Also, the commodities market affords more
capitalists the opportunity to maximize profits for their private
corporations without ever seeing those commodities or being part of
the process of planting, cultivating, and harvesting. Rather, they
are a peripheral group who gain or lose capital for their owner
Between the fields and the consumers, there is an enormous
network of agricultural middlemen that compose the majority of the
cost of agricultural products. These middlemen include grain
cooperatives, the product marketing sector including agricultural
processing plants, and grain trading companies which have prescribed
roles in agribusiness. Much has been written about farmers and the
government involvement in agriculture, but comparatively little
analysis has been made of the enormous impact these middlemen have
had in U.S. agriculture. The roles that these agricultural
middlemen play are complex. Also, most are very secretive about
their operations. The following analysis attempts to demystify
these roles.
Once the farmer produces the grain, he trucks it to a grain
elevator. This local elevator is the first point in the delivery of
grain for domestic use or for export. The farmer may sell his grain
immediately upon delivery or he may store the grain for sale at a
future date (but he must pay a storage fee). The elevators may be
independently owned, held cooperatively by a number of farmers, or
are, less frequently, an affiliate of a grain trading company.
Farmer cooperatives were historically formed as an attsnpt
by local grain producers to compete collectively for a fair rate of

return, as previously discussed in Chapter III. These cooperatives
are numerous with a collective membership of 6 million, representing
around 75% of the grain producers. They have represented a total
net business volume of over $42 billion.^ The activity of these
farmer cooperatives is still largely in the domestic market. They
handle approximately 40% of all off-faun sales of grain at the
initial level and approximately 29% of export grain to final ports
in the United States.^ It is significant to note that cooperatives
handle less than 10% of the actual exportation of grain to other
countries. The grain seldom stays in these local elevators for
long, as it is usually sent to a subterminal where rail cars or
barges haul the load to port terminals.
The product marketing sector includes companies involved in
the processing and distribution of food. They represent the largest
sector in the food and fiber system and number approximately
600,000. They currently employ over five million workers.Big
corporations such as Beatrice and General Foods, are common names in
this area. These corporations are highly integrated and canbine
processing and distribution functions. Their processes involve
labor-intensive work which accounts for a significant part of the
cost of food items. The cost of labor in the producton of food has
gone up from $19.7 billion in 1960 to $59.8 billion in 1977 due, in
part, to the consumer labor- saving devices that have come into
existence.I Other costs include packaging materials, rail and
truck transportation, advertising, rent, depreciation, etc. In
total the marketing bill for farm products has gone up from $44.6
billion in 1960 to $128.6 billion in 1977.1?

The product marketing sector has not only profited from
their direct role in agribusiness but also have received govern-
mental support for some of their business dealings. Michael
Fumento, in his article entitled "Some Dare Call Them.. .Robber
Barons," explores the massive subsidies that Archer-Daniels-Midland
(ADM), the nation's largest agricultural processing concern, has
been receiving for their gasohol and high-fructose syrup opera-
tions. He states that in January, 1987, the USDA released figures
that showed ADM had received, free of charge, $29.3 million worth of
corn in the summer of 1986 from the government stockpiles to be con-
verted into gasohol.This amount, according to a USDA staff
economist, may be the largest one-time subsidy the USDA has ever
given to a single agricultural entity. In the area of high-fructose
corn syrup, ADM receives price supports from the goverrment. In
return, ADM has made substantial contributions to political leaders
and their campaigns which include such individuals as Ronald Reagan,
Robert Dole, Jesse Helms, and Tip O'Neill.^ The example of ADM is
only one of a number of areas in which the agricultural middlemen
have benefited, however directly or indirectly, from government
In the area of the exportation of American grain, grain
trading companies are the crucial link, and most profitable, in the
grain export business. They are important handlers in the shipping
of grain as it moves to port terminals. In fact, in the United
States, nearly 70% of all grains are in private, noncooperative
hands by the time they are unloaded at port terminals. 2 Grain
trading companies rarely involve themselves in the actual production

of grain nor do they purchase directly from the farmers on a con-
tractual basis. The objective of grain trading companies is to
purchase grain at the lowest possible price in a competitive market,
in order to sell in a oligopolistic market in which such big corpor-
ations as Cargill, Inc. and Continental Grain dominate.
As with other agricultural middlemen, integration is the
highly profitable way in which grain trading companies operate.
Grain trading companies own a majority of subterminal space in the
United States.This domination of subterminal space gives these
trading companies access to large stores of grain in order to fill
large export orders, as well as many domestic orders. They also act
as processors of grain, with some firms having large mills as
affiliates. Grain trading companies are heavily involved in the
operation and leasing of port terminals.
The real boost to the maximization of profits in the grain
market for grain trading companies is their use of affiliates in
foreign markets. These foreign affiliates purchase grain for
processing, thus providing a sure market for the related grain
exporter's stock. In return, the foreign affiliate gets preferen-
tial treatment in the form of better prices and flexible teems.
In his book Merchants of Grain, Dan Morgan explores the empires
of the giant grain trading companies (e.g., Continental Grain
Company, Cargill, Inc., Louis Dreyfuss Corporation, Bunge and Born
Corporation). A specific area he covers is the impact of Public Law
480, which was instituted as a means of disposing of surplus grain
through food assistance programs to eligible foreign countries, and
the way this policy was a bonanza for grain trading companies.^2

The United States enlisted the assistance of grain trading
companies to carry out the food assistance programs under Public Law
480. These companies handled the contracts between the U.S. govern-
ment and recipient countries. Although these contracts had with
them bureaucratic regulations, they not only helped the U.S. solve
some of its surplus problems, but also provided a profitable busi-
ness for grain trading companies because corporate risk was mini-
mized. Shippers were paid in dollars with a guarantee secured by an
American bank, which processed a foreign bank's letter of credit.
This practice, which ensured prompt reimbursement in dollars to the
grain trading companies, allowed an exporter to bypass the normal
currency hedge. Also, once converted to commercial buyers,
developing countries have been inclined to remain loyal to their
traditional suppliers because under Public Law 480, individual
companies became associated with sales to one country or another.
This government program, then, proved to be highly profi-
table for the grain trading companies in carving out and securing
long-term relationships with countries. The following chart shows
how much money was financed for the ten largest exporters of grain
under Public Law 480 from its inception through December 31, 1960:
Table 1
PL 480 Title 1: Ten Largest Exporters of Grain
From Inception Through Decanber 31, 1960
Continental Grain Co.
Cargill, Inc.
Louis Dreyfuss Corporation
Bunge Corporation
Garnac Grain Co.
Robin International, Inc.
Producers Export Co.
Pillsbury Mills
$ 597,792,683

Table 1 (continued)
Interoceanic Commodity Corp. 47,173,513
Balfour, Guthrie and Co. 45,578,271
Total $2,019,311,674
Adapted from Richard Gilmore, A Poor Harvest (New York:
Longman Inc., 1983): 251, table B.l.
Finally, the U.S. government role has been increasing
dramatically since it became directly involved in agriculture during
the Depression. The amount paid in direct subsidy payments has
grown especially fast during the Reagan administration. In 1972,
$4.0 billion was paid with the amount dipping to approximately $1.0
billion in 1974, 1975, and 1976. However, the amount rose to almost
$10.0 billion in 1983, and in 1986, $12.0 billion was paid out. The
projections are that in 1987, between $15 billion and $17 billion
will be paid to agricultural producers.^3 Farmer participation has
been high in government programs, as price guarantees have been
almost twice as much as the market price. Because of this increased
enrollment, as of March 1, 1987, the nation had 2.25 billion bushels
of wheat in storage, up from 2.13 billion a year earlier.
After taking apart and looking at all the various components
that make up U.S. agriculture today, it is easy to understand why
the general public clings to so many misconceptions about agricul-
ture. Misconceptions also abound when reading articles about the
current state of agriculture. By clinging to the old ideas of
supply and demand, the free market system, and how agriculture is
"supposed to be run," we, as a country, have become deadlocked on
solutions to the problems, because the workings of the system do not
fall into traditional economic thinking.

What has happened, therefore, is that many writers or
critics try to fix blame for the failing systan by finding scape-
goats for the problems. For example, the fanners blame the govern-
ment, large corporations, and particularly the workings of the
Chicago Board of Trade, who many believe are in a conspiracy against
the small family farm. Nonfarmers (consumers, economists, etc.)
believe the farmers have used illogical business practices (e.g.,
buying land at too-high interest rates) or are simply not good
enough at what they do. They believe that the current crisis in
agriculture is simply a winnowing process of clearing out the bad
farm operators. The common thread that one surmises when reading
these articles is that agricultural issues are so complicated that
no simple solution can be found.^5 The government response has been
to throw more money into programs that have not changed drastically
from the 1930's even though the relationships in agriculture have
evolved to a highly complex plane.
In this analysis, the current state of U.S. agriculture is
part of the systematic progression of a capitalist state in its
concentration of economic power in the hands of the few. If one
looks at the history of U.S. agriculture in this light, this
progression is not so much unorganized or surprising as it is a
predictable outcome based on the characteristics of capitalism. In
Chapter I, the characteristics of the capitalist mode of production
were listed. Taking each of the four points made by Greenberg
individually, U.S. agriculture is an excellent verification of these

(1) U.S. agriculture has gone through a revolution in
technology that has allowed for tremendous gains in
production output as outlined in Chapter III. This
increased agricultural output means that the U.S. now
consumes only 75% of domestic agricultural products.^6
The rest are available for export. This advanced
technology has encouraged the growth in size of farms as
more land could be tilled in less time.
(2) As shown in this chapter, there has been tremendous
economic concentration in U.S. agriculture as small
farmers have been driven out of business. These small
farms have become part of larger and larger farming
units, of which increasingly more are owned by corpora-
tions .
(3) Farmers, as they are driven away from the land, are ever
increasingly becoming part of the working class. This
rural exodus has been going on for years but has stepped
up significantly in pace in the 1980's. This exodus is
discussed in a recent article in Technology Review
entitled "Time to Retrain the American Farmer." Leslie
Thurow, the article's author, writes:
Despite the inevitable political repercussions,
the U.S. government should take the lead in easing
farmers out of agriculture. Those in farming and
related industries should be retrained and
relocated... to areas where jobs are available.^
(4) Because the American farmer has been able to produce a
huge surplus of food, the economic pressure is there to

find expanding foreign markets. As has been demon-
strated in this decade, foreign markets for American
grains have been shrinking, contributing to the current
economic crisis in agriculture. As has been discussed
earlier, the U.S. government has not been able to solve
the problem of this surplus production.
This chapter, then, has pointed up the contradictions that
are happening in U.S. agriculture currently. There have been clear
winners and losers in that struggle, and the historical relation-
ships are going through tumultuous changes. How these changes may
affect the future of U.S. agriculture is the topic of Chapter V.

Chapter IV
1. The Continuing Crisis in Rural America: Fact vs. Fiction (Des
Moines: Prairiefire Rural Action, Inc., 1987), p. 4.
2. Osha Davidson, "Farms Without Farmers," Progressive, August
1986, p. 26.
3. Ib id .
4. Terry Pugh, "Foreclosures Belie 'Rosy Picture'," Guardian, June
24, 1987, p. 6.
5. Richard Merrill, ed., Radical Agriculture (New York: New York
University Press, 1976), p. 43.
6. Ib id .
7. Ibid, p. 42.
8. Davidson, "Farms Without Farmers," p. 26.
9. Michael Perelman, Farming for Profit in a Hungry World: Capital
and the Crisis in Agriculture (Montclair, New Jersey: Allanheld,
Osmun & Co., 1977), pp. 95-101.
10. Ib id., p. 179.
11. Karl Marx, Capital, A Critique of Political Economy, vol. 1
(Chicago: Charles Kerr, 1906), p. 554.
12. For a further description of the commodity markets, see Richard
Gilmore, A Poor Harvest (New York: Longman Inc., 1982), pp. 17-19,
13. U.S. Department of Agriculture, Farmer Cooperative Service,
Statistics of Farmer Cooperatives, 1974-75, FCS Research Report 39
(April 1977), iv., pp. 2 and 9.
14. U.S. Department of Agriculture, Farmer Cooperative Service,
Improving the Export Capability of Grain Cooperatives, FCS Research
Report 34 (June 1976), iv.
15. Willard W. Cochrane, The Development of American Agriculture:
A Historical Analysis (Minneapolis: University of Minnesota Press,
1979), pp. 230-231.
16. Ibid., p. 232.
17. Ibid.

18. Michael Fumento, "Some Dare Call Thera...Robber Barons,"
National Review, March 13, 1987, p. 38.
19. Ibid., p. 36.
20. Gilmore, A Poor Harvest, p. 14.
21. Monte E. Juillerat and Paul L. Farris, "Grain Export Industry
Organization and Facilities in the United States," Research Progress
Report 390 (Lafayette: Purdue University, Agricultural Reporting
Station, August 1971), pp. 7 and 12.
22. Dan Morgan, Merchants of Grain (New York: Viking Press and
Penguin Books, 1980), pp. 146-148.
23. Steve Painter and Dirck Steimel, "A Dilemma Down on the Farm,"
Wichita Eagle, May 31, 1987, p. 1A.
24. Ibid., p. 9A.
25. Gregg Easterbrook, "Making Sense of Agriculture," Atlantic
Monthly, July 1985, pp. 63-78.
26. Aloysius Ehrbar, "Facts vs. Furor Over Farm Policy," Fortune,
November 11, 1985, p. 117.
27. Lester C. Thurow, "Time to Retrain the American Farmer,"
Technology Review, June 1987, p. 23.

It has been established that U.S. agriculture is an integral
part of the capitalist system in the United States. It is not
surprising, then, that the Vice President of Continental Bank, one
of the largest midwestern agricultural lenders, told the business
community at the Conference on Feeding the World's Hungry in 1974,
"The control of agriculture is moving to those who control
capital."^ Indeed, his prediction has come true and this trend will
probably continue in U.S. agriculture in the immediate future.
Let's examine how we must demystify U.S. agriculture in order for an
alternative future to become reality.
First, there are some preconditions to the immediate future
if the current trend continues in U.S. agriculture. We must assume
that capitalism will continue as the driving economic (and accom-
panying political) force in the United States. We must also assume
that this system will continue to be acceptable, however begrud-
gingly, to the farmers and other actors whose roles will change
under the system.
The first phase in this future, is the continued concentra-
tion of land ownership into the hands of those with large amounts of
capital. This trend has been predicted by the Congressional Office

of Technology Assessment. Its report states that by the year 2000,
nearly one million U.S. farms will disappear if the current farm
policy continues. This translates to a loss of 71,500 farms per
year from March 1986 to the year 2000. This loss of farms would be
accompanied by an increase in the number of "super farms," from the
estimated 10,000 in existence today to a projected 50,000 units,
each with annual sales of over $1 million. These 50,000 "super
farms" are predicted to account for 75% of U.S. agricultural
production by the year 2000.^
Hand in hand with this first phase is the growing corporate
invasion into agriculture. The role of corporations is ballooning
as they acquire more land. They have realized that the real profits
from farming come from marketing and distribution, not production.
Therefore, these corporations will continue to lease out their
acreage for production or will contract with farmers to grow
products on their land. Under these contractual arrangements, the
farmer agrees to grow crops only for that particular corporation.
In return, the corporation gives credit and other gratuities to the
farmer, thereby lowering risk to the farmer. However, in these
arrangements, the farmer is no longer an independent entity, but
merely a worker for the corporation.
In addition to corporations, more and more banks, proces-
sors, and distributors will continue manipulating the farmer through
their growing power positions in agriculture. In addition to being
subject to the dictates of contract firms or rental agreements,
farmers will be controlled increasingly by the institutions they
rely on for credit. This rise in farm debt has been accelerated by

technological innovations. In an attempt to keep up with other
larger producers, farmers have gone into greater and greater debt in
order to buy the latest hybrid seeds, fertilizers, and pesticides
which help to get the job done more efficiently and timely.
By increasing their debt, farmers who borrow from financial
institutions give up their independence bit by bit. Banks often
require extensive data from prospective borrowers. This information
is compared with the computerized histories of the other farmers who
have borrowed money. If the farmer does not intend to farm in
conformity with the "best commercial practices," the bank will not
extend credit.^ In effect, the banks tend to stifle agricultural
practices which diverge from the typical corporate chemical models.
Such control, as mentioned above, can lead to nightmarish
examples. Michael Perelman writes about the case of Peter Divizich
of California:
The early history of Mr. Divizich reads like a wonderful
American success story. Beginning as a farm worker, he
eventually gained ownership of 5,000 acres of land in the
fertile Central Valley of California. In 1966, a Bureau of
Reclamation survey of 2,600 acres of the property estimated its
value at $4.3 million. Since 1940, Mr. Divizich had borrowed
funds from the Bank of America, the largest agricultural lender
in the United States. After a relatively bad year, Mr. Divizich
decided to try his luck marketing grapes through the company
which is now the market arm for Tenneco. One year's experience
with Tenneco brought him to the brink of bankruptcy. The bank
threatened to foreclose unless Tenneco was allowed to manage his
farm as well as market his grapes. Under this plan, the farm
lost more than $2 million after a single year. At this point,
according to testimony before the U.S. Senate, the bank fore-
closed; ignoring higher bidders, it bought the farm for far less
than it was worth, only to resell at very favorable terms to
Contract farming has already become a reality for many agri-
cultural products. As early as 1964, the Department of Agriculture

reported that crops grown under contract with processors and distri-
butors had reached 100% for sugar beets, castor beans, safflower,
and hops. Today we would add to this list broiler chickens, fluid
milk, vegetable seeds, hydrid seed corn, and vegetables for canning
and freezing. All in all, about 20% of all farm output is grown
under contract.^ Contract farming will most probably grow in other
agricultural areas as well, in the immediate future, despite the
consequences of such arrangements for small farmers, who have given
up their independent status in return for a steady income. In these
areas, because corporations have control over the entire process,
the decision as to what price the consumer pays for such products is
in the hands of corporate officials.
The final phase of this future would be the ultimate control
of agriculture by private industry due to increasing use of contract
farming, leasing of land, or direct control. In this future, the
farmer is finally relegated totally to the role of the alienated
worker who has no control over production. Such a future as this
one was foretold by Karl Marx in Capital:
In the sphere of agriculture, modern industry has a more
revolutionary effect than elsewhere, for this reason, that it
annihilates the peasant, that bulwark of the old society, and
replaces him by the wage labourer. Thus the desire for social
changes, and the class antagonisms are brought to the same level
in the country as in the towns. The irrational, old fashioned
methods of agriculture are replaced by scientific ones.
Capitalist production completely tears asunder the old bond of
union tdiich held together agriculture and manufacture in their
infancy. But at the same time it creates the material condi-
tions for a higher synthesis in the future, vis., the union of
agriculture and industry on the basis of the more perfected
forms they have each acquired during their tenporary separa-
t ion.^
He also writes:

In agriculture as in manufacture, the transformation of
production under the sway of capital, means, at the same time,
the martyrdom of the producer; the instrument of labour becomes
the means of enslaving, exploiting, and impoverishing the
labourer; the social combination and organization of labour-
processes is turned into an organised mode of crushing out the
workman's individual vitality, freedom, and independence. The
dispersion of the rural labourers over larger areas breaks their
power of resistance while concentration increases that of the
town operatives. In modern agriculture, as in the urban
industries, the increased productiveness and quantity of the
labour set in motion are bought at the cost of laying waste and
consuming by disease labour-power itself.^
Under capitalism, then, agriculture is yet another area
where the capitalist will continually try to maximize profits
through whatever means possible by gaining greater control.
There is one ray of hope for the small farmer not to be
reduced to a wage-laborer under the current system. U.S. agricul-
ture at its most basic level involves a great deal of risk. Much of
the success of a crop depends on the weather and the timely deci-
sions to harvest, plant, etc. The modern corporation cannot control
the weather, nor can the slow process of the corporate bureaucratic
hierarchy make the timely (sometimes hourly) decisions necessary to
operate efficiently in the fields. A more likely scenario is for
the large landowners to rent out their land to small farmers to
operate or for the further expansion of contract fanning, as
discussed earlier. It is unlikely that corporations would take over
the day-to-day operations of faming vAien there are others who would
be willing to take the risks.
The role of Government in this future is unlikely to change
quickly from its present role of giver of price supports and loans.
Although the current farm bill will soon end, replacements will
probably not totally eliminate price supports, even though the

farmers for which this help is intended are quickly disappearing.
As is usually the case in many areas of governnent "welfare,"
government agricultural policy never corrects the underlying causes
of inequality, but only tries to resolve crises by appeasing special
interests. Notwithstanding the public outcry for reduced subsidies,
it is unlikely that the U.S. governnent can ever withdraw totally
from the U.S. agricultural picture under the current system. A more
likely occurrence will be rhetorical changes in legislation to make
it more palatable to the public and voters.
Since so much cropland is changing hands in the United
States, the U.S. government, while superficially maintaining that it
is the protector of the underdog small farmer, is in actuality
subsidizing ever larger landowners. If price supports continue, the
large landowner/proprietor will continue to receive the most sub-
sidies. As mentioned earlier, government policies work hand-in-hand
in favor of large agricultural entities. Thus the governnent,
indirectly or directly, will continue to perpetuate the lopsided
power relationships that are squeezing the small farmer entrepreneur
out of the U.S. agricultural picture.
The only true alternative to this type of future for U.S.
fanning would entail a revolution in how we look at agriculture as a
mode of production. The first step in that direction is to de-
mystify some of the concepts that others have used in describing
U.S. agriculture. Initially, we need to expose the myth of over-
production as it pertains to agriculture. Almost every article on
the agricultural crises points out that overproduction is at the

root of the problem. Gregg Easterbrook writes in his article,
"Making Sense of Agriculture":
One way or another, most of the confusion in American agri-
cultural policy today arises from our reluctance to accept the
idea that growing food is sometimes the wrong thing to do.
Conservative and liberal economists have done exhaustive
studies on "overproduction" and their arguments vary greatly on the
causes and effects of such overproduction. For example, Glenn
Johnson, in his book The Overproduction Trap in U.S. Agriculture,
outlines several theories why American agriculture cannot overcome
its tendency to expand production. He describes the Schultzian
Secular Modification Theory, D. Gale Johnson's Risk and Uncertainty
Modification Theory, as well as other neoclassical theories, and
then proceeds to describe his own theory.^
These authors and economists, using their linear viewpoints,
have created an overproduction issue because they are focusing on a
quantitative problem in vdiich U.S. capitalism cannot find enough
outlets for our agricultural surplus. Our U.S. capitalist require-
ment, as one remembers from Chapter I, is for expanding markets. In
the case of these agricultural surpluses, our existing capitalist
middlemen system cannot find outlets for all that is produced.
Because these outlets cannot be found, the burden to produce
less falls back on U.S. farmers, who must do so in order to receive
U.S. governmental subsidies and loans. They are, in effect, being
criticized for being too good at what they do, while in actuality,
there is a need in the world for this surplus. Hungry people world-
wide cannot get the food for a variety of reasons, with the common
denominator being that they cannot pay the price in the prevailing

system of distribution. Some countries do receive food relief from
the various governments and charities throughout the world. How-
ever, the total amount given under the auspices of charity is an
insignificant percentage of the total food produced. The problem of
world hunger will probably not be resolved under our current method
of food distribution.
Returning to a Marxist analysis of overproduction, Ernest
Mandel has stated that the prevailing attitude has created "agricul-
tural Malthusianism."^ Mandel states that while the world has been
worried about Malthus' predictions on overpopulation, many indus-
trialized countries have created a "permanent psychosis of agricul-
tural overproduction."H He further states:
More than ever is it obvious that the problem does not lie
in the absolute increase in population in the capitalist condi-
tion of production and distribution \diich creates a situation of
plenty and poverty side by side.^2
Finally, Richard Gilmore gives an excellent summary of the
overproduction issue in the following comments:
Ironically, we face a situation today especially in the
United States, in which the successful public policies of an
earlier era, policies so successful that global food surpluses
have become the norm within a decade of the close of World War
II, are themselves the source of new problems. Thus, the food
issues of the future promise to have less to do with food
production than with marketing, trade, and government policy.^
Another myth that needs exposing before we can proceed in a
new direction for U.S. agriculture is the use of food as a weapon by
the U.S. government. Because many countries rely heavily on the
United States for agricultural products, recent U.S. administrations
have been urged to use food as an effective diplomatic tool in
getting what the U.S. wants. Especially in the case of the soybean

embargo of 1973 and the more recent Soviet grain embargoes, the
effectiveness of such action is questionable at best because the
U.S. does not hold all the cards. An important factor in this
ineffectiveness, as noted in Chapter IV, is the international
dealings of grain trading companies and the United States' inability
to control those dealings.
An even greater illustration of the use of food as a weapon
is the U.S. allocations under Public Law 480 which has been dis-
guised as a humanitarian effort by the United States. However, the
United States has used this "Food for Peace" program to enhance its
own economic and political objectives. In exchange for food, the
U.S. has demanded changes in economics and politics from recipient
countries, albeit with limited success, and in the case of India and
Egypt in the 1960's, such demands completely backfired.^ Yet, even
with these setbacks, the United States continues to use food as a
diplomatic weapon.
Finally, the last step in revising our view of U.S. agricul-
ture involves exposing the U.S. agricultural system as a system that
has exploited one class (the farmer/entrepreneur) for the express
benefit of various members of the agricultural capitalist middlemen
class. This exploitative relationship has gone on for centuries, as
outlined in Chapters III and IV. For years, farmers have fought
this exploitation but were never successful in changing the rela-
tionships of production. The stepping in by the U.S. government
during the Depression helped appease the farmers, but now it has
become clear that the cumulative effects of an artificially

supported system have meant the collapse of the foundation, the
By demystifying agriculture, we begin to see how agriculture
is part of the intricacies of the U.S. capitalist systsn with its
need for expansion, exploitation, and a government to uphold the
interests of the ruling class. It follows, therefore, that it is
very unlikely that U.S. agriculture will change without the entire
system changing. If this revolutionary change should be socialist
or at least more egalitarian in nature, we may see a "rational"
agriculture as described by Ernest Mandel or a "radical" agriculture
as described by Murry Bookchin.
Mandel envisions "rational" agriculture as being one in
which "negotiations between landowners, capitalists, and producers
would be placed on a relatively equal footing" and "it is obvious
that in a society like this, there would neither exist a monopoly of
capital in the hands of the bourgeoisie nor a proletariat as a
class, so that it would not be a capitalist society.
Bookchin feels that we must return to "radical" agriculture
which he describes as follows:
Radical agriculture seeks to restore humanity's sense of
community: first, by giving full recognition to the soil as an
ecosystem, a biotic community; and second, by viewing agricul-
ture as the activity of a natural human community, a rural
society and culture.^
He further states what this "radical" agriculture would mean
for the world:
Radical agriculture, in short, implies not merely new
techniques in cultivation, but a new non-Promethean sensibility
toward land and society as a whole.^

Socialism means that the ownership and control of the means
of production is in the hands of the producers. Therefore, a
socialist vision for agriculture would mean that food production
would be oriented towards use, rather than sold for profit. The
transition to socialist agriculture would entail a total reversal of
the current trend towards larger and larger farms. This reversal
would mean that we must undertake a massive land reform to begin the
process of returning people to the land or to keep those already
there. Farming methods, including the use of chemicals and irriga-
tion, would need to change, to reflect a more ecological approach to
agriculture with a return to organic farming. With such changes in
the forces of production, likewise, existing agricultural roles
would need changing to reflect a more egalitarian society.
Ultimately, under socialism, farming would be a job shared by many
people from all walks of life so that many people could become
skilled in agricultural methods.
As we have seen in this thesis, farmers have historically
been one of the many classes exploited under a capitalist system.
It makes sense, therefore, that farmers can become part of those
seeking a new system of equality and democracy. As mentioned in
Chapter II, certain agricultural groups are already identifying
their commonality of goals with other labor organizations. This
type of driving force, rather than apathy, must continue if farmers
are to succeed in saving their historical roots and in becoming a
vital part of a new community.
In summary, revolutionary change usually comes about as a
result of a crisis in the system, and this thesis has looked at the

current crisis in agriculture as a part of the crisis in our U.S.
capitalist system. We have looked at the unique historical develop-
ment in agriculture that has led to this crisis and the system as it
currently exists. What direction agriculture will take in the
future is directly related to how long the overall systan can
withstand the crisis brought about by the class struggles in our
society. Hopefully, a "rational" agriculture is the future of U.S.

Chapter V
1. Michael Perelman, Fanning for Profit in a Hungry World: Capital
and the Crisis in Agriculture (Montclair, New Jersey: Allanheld,
Osmun & Co., 1977), p. 101.
2. The Continuing Crisis in Rural America: Fact vs. Fiction (Des
Moines:Prairiefire Rural Action,Inc., 1987), p. 4.
3. U.S. Department of Agriculture, Economic Research Service,
"Entrepreneurial Control in Farming," ERS No. 542 (1974), p. 10.
4. Perelman, Farming for Profit, pp. 89-90.
5. Leon Garoyan, "Is it Time for Contracts?," presented at the
Summer Institute, American Institute of Cooperation, Kansas State
University, Manhattan, Kansas (August 1974).
6. Karl Marx j Capital, A Critique of Political Economy, vol. I
(Chicago: Charles Kerr, 1906), p. 554.
7. Ibid., p. 555.
8. Gregg Easterbrook, "Making Sense of Agriculture," Atlantic
Monthly, July 1985, p. 63.
9. Glenn L. Johnson and C. Leroy Quance, eds., The Overproduction
Trap in U.S. Agriculture (Baltimore: John Hopkins University Press,
1972), pp. 22-40.
10. Ernest Mandel, Marxist Economic Theory, vol. I (New York:
Monthly Review Press 1968), p. 295.
11. Ibid.
12. Ibid., p. 298.
13. Richard Gilmore, A Poor Harvest (New York: Longman Inc., 1982),
p. 1.
14. Gilmore, A Poor Harvest, p. 155.
15. Mandel, Marxist Economic Theory, pp. 300-301.
16. Richard Merril, ed., Radical Agriculture (New York: New York
University Press, 1976), p. 8.
17. Ib id., p. 10.

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