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Benjamin Fick
The Farm Crisis: Americas Heartland in Jeopardy
The 1980s are generally thought of as an economically prosperous time, but
for the family farmer, it was anything but. The series of difficulties they faced in
the 1980s are known as the farm crisis. This was a faraway occurrence to
Americans of a non-rural background, but it was a daily nightmare for those who
lived through it. The crisis changed the rural landscape more than any other event
before or after. Whole families lost everything they had, and rural communities
were forever changed.
First, we will discuss the events in the years leading up to the crisis, and why
they made it so severe. Next, we will observe the actual crisis itself, including the
reactions of farmers suddenly finding themselves bankrupt. After that, we will
explore the steps taken, both by the federal government and by private citizens, to
provide some kind of aid to disadvantaged farmers across the country. Finally, we
will consider the long-term effects as well as the lessons learned by those who
lived through possibly the darkest period in our nations economic and cultural
history since the Great Depression.
To understand the severity of the crisis, it helps to begin many years before,
in the economically prosperous era following World War II. Thanks to

advancements in technology and productivity, the United States found itself with a
huge surplus of grain, and overseas demand was almost too high for the American
farmer to keep up. Under increasing pressure from market forces and government
agencies, farmers began to expand their operations. Secretary of Agriculture Earl
Butz had famously quipped in 1973 that farmers should get big or get out.
Throughout the latter part of the 1970s, the average farm size did increase from
about 350 to over 425 acres per farm, but the number of farms in the United States
dropped from 3 million to just over 2.5 million, as reported by the USDA in The
20th Century Transformation of U.S. Agriculture and Farm Policy. This was really
only part of a much larger trend, however; since 1940, average farm size had
increased from about 175 acres, and the number of farms had dropped from over 6
million.
According to the Iowa State University article The 1980s Farm Crisis:
Some Lessons Learned, despite land prices hitting record highs, banks and other
lending institutions would still give out loans using the value of the farmers
current landwhich was sometimes also on loanas collateral. Commodity prices
had been steadily increasing for the past several decades, and nobody had any
reason to believe theyd ever go down.
Now that we have seen the conditions leading up to the farm crisis, lets take
a look at what actually set it off. On October 6, 1979, the Federal Reserve changed

the way it calculated interest rates to stop runaway inflation. Additionally, as

retaliation for the Soviet Unions invasion of Afghanistan in December, President
Carter halted deliveries of US grain to the USSR, previously their biggest
customer. In the article Farm Bust of the 1980s by the Wessels Living History
Farm, it was reported that commodity prices sank, and farmers who had literally
bet the farm on next years crop found themselves unable to even pay off their
interest, never mind the loans themselves. Because their customers had no money
to pay off their loans, it wasnt long before many rural banks and the nationwide
Farm Credit System failed as well.
Once the banks failed, there was nothing to keep farmers financially stable.
Foreclosures and farm auctions became the norm. Because of the scope of the
crisis, it wasnt just the most recently-bought land that was up for sale; often the
farmers had to watch their friends or colleagues sell off the land they had owned
for generations. The only farmers who escaped the auction block were those few
that had refused to expand in the 1970s, and even then, it was just as difficult to
live from day to day.
The farm crisis affected much more than just the small family farmer.
Companies that made tractors, equipment, and other farm supplies closed up shop.
What had once been dozens of independent corporations were by the decades end
a handful of merged and bought-out properties. Even giants like International

Harvester and Allis-Chalmers found themselves merging with other entities, often
foreign-based, just to stay afloat. And in many small- to medium-sized Midwestern
cities, the factories and assembly lines were shut down for good, leaving thousands
without good-paying jobs and causing even more of an economic slump.
Now that we understand the weight of the crisis, we will learn how the
farmers, and the country as a whole, reacted. Most farmers suffered silently; it was
part of their stoic nature to accept hardships without complaint. But some lashed
out in much more drasticand deadlyways. On December 9, 1985, farmer Dale
Burr of Lone Tree, Iowa, shot his wife, a local bank president, another farmer, and
then himself, with a note saying that his debts of over half a million dollars had
become too much to bear. Other farmers met law enforcement with violence when
they came to foreclose on their property.
The response of the federal government to this disaster was
uncharacteristically neutral, even cold. The administration of President Reagan,
along with many others in Washington, opined that it was the fault of the farmers
themselves that they did not see what was coming.
In the IPTV-produced documentary The Farm Crisis, former Senator Tom
Daschle of South Dakota remarked on the frustration felt by many farmers who

found themselves without any kind of aid from the administration they had once
supported:
You had a philosophical chasm [] between those who believed the
governments role should be limited, [] and those who really felt that at
times like this, you needed the government to create the kind of stability []
necessary for survival. That clash occurred in public policy debates for
months [.]
With the view that the federal government would do nothing to help, the first
real stirrings of aid came from private citizens. Musicians Willie Nelson, Neil
Young, and John Mellencamp organized the first Farm Aid concert with over 50
bands and artists in Champaign, Illinois, on September 22, 1985, to raise money
and awareness for the ailing farmers across the country; the concert has been held
every year since in various locations and celebrated its 30th anniversary this year.
Several films were also released which told of the farmers plight in more dramatic
terms, and to a much larger audience.
In the face of such heightened awareness, officials in Washington could no
longer idly stand by. Congress introduced Chapter 12 of the US Bankruptcy Code
in 1986; according to the United States Courts database of court forms, Chapter 12
allowed family farmers (and later, fishermen) some lenience on their defaulted loan

interest payments, providing at least some measure of relief. The Food Security
Act, better known as the 1985 Farm Bill, created conservation programs and
supported lower-income farmers when commodity prices got low. Combining the
1985 Farm Bill, Chapter 12 bankruptcy, and an overhaul of the Farm Credit
System meant that many of the worst blows of the crisis to the US economy were
softened.
By the time of most of this legislation, however, much of the damage to the
family farmer and to rural America had already been done. The number of farms
didnt decrease by much, only by about 500,000 from 1980 to 1990, but the
average acreage of those farms increased dramatically because when the land went
up for auction, the only group with enough money to buy was larger corporate
farms with no connection to the surrounding community.
The crisis had a deeper psychological effect as well. Farmers were cautious
by nature, but the devastation caused by the crisis redoubled their fears and caused
renewed distrust in federal, state, and local authorities. Perhaps the most obvious
change, though, was that many young people in rural areas moved to the cities
looking for opportunity and never returned. Even today, the average age of small
towns and rural areas across the country is much older than in urban areas.

However, not all the aftereffects of the farm crisis were inherently negative.
A retrospective look in the article My Farm Roots: Lessons from the Farm Crisis
by one farmer who grew up during the crisis had this to say about the hard times:
They taught us about world trade, they taught us about exchange rates, they
taught us about interest rates, they taught us about inflation [] Things that
farmers before then may have been aware of, but they didnt realize that
what happens on the world stage could put [them] out of business.
The lessons learned from the farm crisis were harsh, but necessary. By
bearing those lessons in mind, both farmers and consumers alike can be more fully
prepared for business and life in an unpredictable world.

Works Cited
Chapter 12 - Bankruptcy Basics. (n.d.). Retrieved September 8, 2015.
Dimitri, Carolyn, Anne Effland, and Neilson Conklin. "The 20th Century
Transformation of U.S. Agriculture and Farm Policy." USD Economic
Research Service. United States Department of Agriculture, 1 June 2005.
Web. 10 Sept. 2015.
Ganzel, Bill. "Farm Bust of the 1980s." Wessels Living History Farm. 2009.
Accessed September 8, 2015.
Iowa Public Television (Producer). (2013.) The Farm Crisis [Motion Picture].
United States: IPTV.
Mayer, A. (2013, June 4). My Farm Roots: Lessons from the farm crisis. Retrieved
September 10, 2015.
Swanson, Donald L. "Guest Article: The 1980s Farm Crisis: Some Lessons
Learned." Iowa State University Center for Agricultural Law and Taxation.
Iowa State University, 12 Jan. 2015. Web. 8 Sept. 2015.