Family Farms Pulled Us Out Of The Depression

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It seems to be a widely held myth that World War II was the main agent for moving the United States out of the Great Depression of the 1930s.

Cornell University Professor George F. Warren, an important adviser to Franklin D. Roosevelt on rural development policy, figured out that it is agriculture that leads countries into and out of depressions. The Roosevelt Administration is the only administration that tried to do something about supporting the family farm.

Our recovery started in 1942, the year the Steagall Amendment to the War Stabilization Act mandated farm parity, but the war got the credit. We then had ten years of economic stability until 1952 when the Steagall Amendment was allowed to expire.

In 1952 "export-oriented pricing" replaced the New Deal policy that had put farm prices in balance, or parity, with other prices. That New Deal policy worked effectively with farmer-approved "supply management" that cost far less than today's subsidies to Agri-business.

Farm parity laws that created a fair price floor for all raw materials was the main agent for moving the United States out of the Great Depression of the 1930s. This support of prices allowed farmers to afford to stay on the farm and rebuild the United States economy literally from the ground up.

Basically, parity is a measuring device that puts the value of raw commodities at a level that equals all the costs, including labor costs and capital costs.