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Agriculture and the Economy

Agriculture and the Economy

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From the nation's earliest days, farming has held a crucial place in the American economy and culture. Farmers play an important role in any society, of course, since they feed people. But farming has been particularly valued in the United States. Early in the nation's life, farmers were seen as exemplifying economic virtues such as hard work, initiative, and self-sufficiency. Moreover, many Americans -- particularly immigrants who may have never held any land and did not have ownership over their own labor or products -- found that owning a farm was a ticket into the American economic system. Even people who moved out of farming often used land as a commodity that could easily be bought and sold, opening another avenue for profit.

The American farmer has generally been quite successful at producing food. Indeed, sometimes his success has created his biggest problem: the agricultural sector has suffered periodic bouts of overproduction that have depressed prices. For long periods, government helped smooth out the worst of these episodes. But in recent years, such assistance has declined, reflecting government's desire to cut its own spending, as well as the farm sector's reduced political influence.

American farmers owe their ability to produce large yields to a number of factors. For one thing, they work under extremely favorable natural conditions. The American Midwest has some of the richest soil in the world. Rainfall is modest to abundant over most areas of the country; rivers and underground water permit extensive irrigation where it is not.

Large capital investments and increasing use of highly trained labor also have contributed to the success of American agriculture. It is not unusual to see today's farmers driving tractors with air-conditioned cabs hitched to very expensive, fast-moving plows, tillers, and harvesters. Biotechnology has led to the development of seeds that are disease- and drought-resistant. Fertilizers and pesticides are commonly used (too commonly, according to some environmentalists). Computers track farm operations, and even space technology is utilized to find the best places to plant and fertilize crops. What's more, researchers periodically introduce new food products and new methods for raising them, such as artificial ponds to raise fish.

Farmers have not repealed some of the fundamental laws of nature, however. They still must contend with forces beyond their control -- most notably the weather. Despite its generally benign weather, North America also experiences frequent floods and droughts. Changes in the weather give agriculture its own economic cycles, often unrelated to the general economy.

Calls for government assistance come when factors work against the farmers' success; at times, when different factors converge to push farms over the edge into failure, pleas for help are particularly intense. In the 1930s, for instance, overproduction, bad weather, and the Great Depression combined to present what seemed like insurmountable odds to many American farmers. The government responded with sweeping agricultural reforms -- most notably, a system of price supports. This large-scale intervention, which was unprecedented, continued until the late 1990s, when Congress dismantled many of the support programs.

By the late 1990s, the U.S. farm economy continued its own cycle of ups and downs, booming in 1996 and 1997, then entering another slump in the subsequent two years. But it was a different farm economy than had existed at the century's start.

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Next Article: Early Farm Policy in the United States

This article is adapted from the book "Outline of the U.S. Economy" by Conte and Carr and has been adapted with permission from the U.S. Department of State.

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