Agricultural Marketing Act of 1929
The Agricultural Marketing Act of 1929 was a significant legislative effort led by President Herbert Hoover to address the economic struggles of American farmers facing overproduction and falling prices. Recognizing the challenges posed by increased global competition and market saturation, the Act aimed to support farmers through cooperatives that could better manage production, storage, and marketing. Central to the Act was the establishment of the Federal Farm Board, which was tasked with promoting cooperative marketing and overseeing a $500 million revolving loan fund for these initiatives. The board also created several agencies to stabilize commodity prices, including the Cotton Stabilization Corporation and the Grain Stabilization Corporation.
Despite its ambitious goals, the Act struggled to achieve its intended impact. Many farmers were hesitant to reduce their production levels, which undermined the effectiveness of the board's voluntary plans. As the Great Depression intensified, the board's operations dwindled, resulting in the cessation of its commodity purchasing programs by 1931 and its eventual dissolution in 1933. Although it fell short of alleviating the farm crisis, the Agricultural Marketing Act laid the groundwork for future agricultural policies, notably influencing the Agricultural Adjustment Act of 1933. This overview highlights the complexities and challenges of agricultural policy during a tumultuous economic period in U.S. history.
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Agricultural Marketing Act of 1929
The Law: Federal legislation intended to help agricultural cooperatives by providing a revolving federal loan fund; also created the Federal Farm Board to investigate farm problems and recommend policy
Date: Enacted on June 15, 1929
The Agricultural Marketing Act was President Herbert Hoover’s major response to the problems facing American farmers, who were suffering from overproduction and declining prices. This legislation was intended to help farmers’ cooperatives, which, it was hoped, could then help farmers address overproduction, storage, and marketing concerns.
Well before the onset of the Great Depression, American farmers suffered economic hardship due to overproduction of key commodities, increased competition in the world market, and declining prices. In the 1928 presidential campaign, Republican candidate Herbert Hoover called the farm problem the major economic crisis facing the nation and promised that, if elected, he would call a special session of Congress to address the issue. This bill, passed by the special congressional session, was largely the work of Republican Representative Franklin W. Fort from New Jersey, a member of the House Committee on Agriculture.
The Agricultural Marketing Act created the Federal Farm Board, consisting of seven members appointed by the president and representing the major producers of various commodities. The secretary of agriculture was an ex officio member of the board. The board was given broad powers to study problems and urge better marketing practices, but its primary purpose was to assist in the development of cooperative marketing associations. Congress approved a $500 million revolving loan fund to be used to offer low-cost loans to these cooperatives. Attempting to take excess production off the market and ensure stable prices, the board created several agencies for purchasing various commodities. The Cotton Stabilization Corporation, the Grain Stabilization Corporation, and the Wool Marketing Corporation were all created in 1930. These efforts aimed at providing price supports generally failed because farmers were reluctant to reduce their overall production. As the Great Depression worsened in the early 1930s, these stabilization corporations were left with large inventories of commodities for which there was little market demand.
Impact
While widely hailed as a major new direction in federal farm policy, the Agricultural Marketing Act of 1929 did little to alleviate the farm crisis. Farmers generally failed to embrace the Federal Farm Board’s voluntary plans for limiting production. By 1931, the board had ended its commodity purchasing programs, and the board itself ceased operations in 1933, after spending about $180 million. While the 1929 legislation brought only limited results, some of its provisions anticipated the policies adopted in the Agricultural Adjustment Act of 1933.
Bibliography
Hamilton, David E. From New Day to New Deal: American Farm Policy from Hoover to Roosevelt, 1928–1933. Chapel Hill: University of North Carolina Press, 1991.
Hurt, R. Douglas. Problems of Plenty: The American Farmer in the Twentieth Century. Chicago: Ivan R. Dee, 2002.