Unit 3: American Economy

American Agriculture

Early Agriculture

From the earliest days, the sight of farmers working the land has been at the heart of the American experience. If an observer had trudged through the forest of eastern North America on the eve of the arrival of European colonists, he would have found stump-strewn clearings in which Native American, or "Indian", communities were growing crops such as maize, beans and squash. Today, from a plane soaring high above the Great

Maize	Squash

Plains in the center of the North American continent, the observer can look down upon vast, rolling fields of wheat, corn, soybeans and other crops.

Outward forms have changed, but the vital importance of agriculture has not. Now, as then, agriculture provides the sustenance that meets people's most basic needs. Agriculture and its related industries serve as the foundation of American economic life, accounting for a larger portion of the United States' GNP (Gross National Product) than any other endeavor. Agriculture represents a bond of continuity between present and past, linking new generations with the rhythms and dreams of generations of long ago.

Monticello—Jefferson's Home

From the nation's infancy, American leaders have extolled the virtues of the hardy, self-sufficient farmer as those most worthy of emulation by the people as a whole. Thomas Jefferson, the third president of the United States, put it this way: "Cultivators of the earth are the most valuable citizens. They are the most vigorous, the most independent, the most virtuous, and they are tied to their country and wedded to its interests by the most lasting bonds".

Farmers have never truly been as self-sufficient as myth suggests, dependent as they are on the whims of weather and the marketplace and on the nature of government policy. Nonetheless, American farmers have shown a spirit of individualism and egalitarianism that the rest of society has widely admired. To a large extent, agricultural values have been adopted and celebrated by the society as a whole.

A Farm in Illinois

American agriculture assumes a richness and variety unmatched in most other parts of the world. In part, this is due to the vastness of the nation itself; in part, it is due to the generosity of nature. Only in a relatively small area of the West are rainfall and snowfall so limited that deserts exist. Elsewhere, rainfall ranges from modest to abundant, and rivers and underground water allow for irrigation where necessary. Large areas of level or gently rolling land—especially in the eastern Great Plains—provide ideal conditions for large-scale agriculture. Today the average American farm comprises 462 acres (187 hectares).

A Farm in the Midwest

The successes of American agriculture are easy to see—and many farmers are quick to boast of them. In parts of the Midwest, signs along major highways remind motorists that "one farmer feeds 75 people." Thanks to nature's bounty and to the effective use of machines, fertilizers and chemicals, American farmers are virtually unrivaled in producing crops cheaply and in quantity. The United States produces as much as half of the world's soybeans and corn for grain, and from 10 to 25 percent of its cotton, wheat, tobacco and vegetable oils.

A Turkey Farm

American agriculture is, by any standards, big business. Indeed, the term "agribusiness" has been coined to reflect the large-scale nature of agricultural enterprise in the modern U.S. economy. The term covers the entire complex of farm-related businesses, from the individual farmer to the multinational maker of farm chemicals. Agribusiness includes farmer cooperatives, rural banks, shippers of farm products, commodity dealers, firms that manufacture farm equipment, food-processing industries, grocery chains and many other businesses.

Both American and foreign consumers benefit from the American farmers, low-cost output. American consumers pay far less for their food than the people of many other industrial countries. Moreover, one-third of the cropland in the United States is planted in crops destined for export—to Europe, Asia, Africa and Latin America. Agricultural exports were 35.6 thousand million in 1989. Agricultural import lags far behind, leaving a surplus in the agricultural balance of trade.

The standard of living of American farmers is generally high. Incomes of farm families average about three-quarters of those of non-farm families, but because farm families' living expenses are lower, their standard of living is close to the national average. Although farm living once meant isolation from the comforts of modern life, this is no longer the case.

The readiness of many farmers to adopt new technology has been one of the strengths of American agriculture. Computers are but the latest in a long line of innovations that have helped American farmers to cut costs and improve productivity. Yet farmers have been traditionalists as well as innovators. They preserve a deep conservatism and respect for tradition that has helped to lend stability to rural communities in times of rapid change.

However, American agriculture has a dark side as well as a bright side. Farmers in the United States go through alternating periods of prosperity and recession and some farm practices have raised environmental and other concerns.

While the high productivity of American agriculture has kept food prices low for consumers, farmers have been perhaps too successful. Crop surpluses and low prices have made it hard for many farmers to make a profit. The cost of the products that farmers buy—tractors, fertilizers, pesticides—has risen faster than the prices they receive for their crops. High interest rates have added to the farmers' burden.

A period of economic difficulty began in the early 1980s. Agricultural exports declined, partly due to the high value of the United States dollar (which raised the cost of American products to foreign buyers). Crop prices fell and interest rates rose. Many farmers found themselves hard-pressed to keep up payments on loans and mortgages taken earlier when prices (and income) were higher. As in the 1930s, some farmers lost their farms and equipment, which were sold off to satisfy the farmers' debts. In dozens of farm communities, the crisis caused the closing of banks, farmer cooperatives and small businesses. A variety of governmental and private programs helped to ease the suffering, but many farmers wondered whether the good times had finally come to an end.

In 1987, there were slightly more than 2 million farms in the United States—down by about 7 percent from the number just five years earlier. Slightly more than 86 percent of the total number of farms are owned by individuals or families. Some 67000 farms, or 3.2 percent of the total, are owned by corporations, but most of those corporations are owned by families. Although family farms are not disappearing, as some people fear, smaller farms are disappearing. People who farm small pieces of land find they cannot invest in the modern equipment they need to make the farms pay. Often, they sell their land—sometimes to other farmers, sometimes to developers who build houses on it. According to the Department of Agriculture, the number of small farms—those with under $50000 in annual sales—dropped by 120000 between 1982 and 1987.

Many farm owners, especially owners of smaller farms, do not work on the farms full-time. Forty-five percent of the people we call farmers actually have other occupations. And not all farmers own their land. Some 240000 are tenant farmers—who either rent their land for cash or pay the owner a share of the crops they grow. On large farms, many of the workers are hired only for a specific chore, such as picking crops. Many of these seasonal workers travel from farm to farm, staying only until the crops are picked. They are known as migrant workers. Some are housed under poor conditions, have inadequate health care, and are paid low wages. In recent years, there has been an effort on the part of government and others to improve the lives of these workers.

Critics accuse both corporate and family farmers of damaging the environment. Since the 1940s, American farmers have multiplied their use of artificial fertilizers and chemicals designed to kill weeds and insect pests and to protect against crop diseases. Such farming aids have played an indispensable role in increasing crop output, but they have also caused problems. Rainfall that seeps through or runs off the soil has carried fertilizers into ground water, rivers and lakes, damaging water quality and promoting the growth of undesirable water plants. Toxic farm chemicals, some linked to cancer and other diseases, have at times found their way into the nation's water, food and air, although constant vigilance by government officials at the state and federal levels is taken to protect these resources. Some have caused harm to farmers and farm workers, although chemical companies insist that their products are safe when used according to directions. Over the years, many farm pests have developed a resistance to milder chemicals, so farmers have had to resort to stronger and costlier ones.

Cattle and Sheep in Virginia

Though responding to innovation and evolving with the passage of time, agriculture remains the foundation upon which American wellbeing and prosperity are based. This bond linking past, present and future is fundamental to the American way of life.

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