In a real sense, modern U.S. federal farm policy began with President Franklin Delano Roosevelt and his Agricultural Adjustment Administration. That act set the basic policy and has simply been modified by presidents since then. The policy differences can be closely tied to each succeeding president.
Harry S. Truman assumed the presidency in April 1945 when FDR died, but Truman was elected in his own right in 1948 largely on the strength of the farm vote. Farm prices were high, in large part because of the post-war economic boom and reconstruction programs in Europe and Asia. But Truman took credit for the good prices.
“In 1932, under the Republicans,” Truman boomed from the back of his train car during a whistle stop campaign across the Midwest, “we had 15-cent corn and 3-cent hogs! … Any farmer in these United States who votes against his own interests, that is who votes the Republican ticket, ought to have his head examined.” Truman was so far behind that the Chicago Daily Tribune mistakenly printed a huge headline “Dewey Defeats Truman” based on early returns. But the farm vote, among others, put Truman over the top.
Truman promised to give the farmer a “Fair Deal” based on continuing the New Deal programs of FDR. But Congress was feeling pressure from consumers who felt that price supports were driving the cost of retail food up. In 1949, Congress cut commodity price supports back to 60 to 90 percent of parity – but not right away. Congress continued the high 100 to 110 percent of parity payments for two more years, much to the delight of farmers.
Truman’s Secretary of Agriculture, Charles F. Brannan, wanted to get off the parity formula altogether. He proposed an income standard that would be determined by a ten-year moving average. He also wanted to limit the maximum that could be paid to any one farmer based on farm size. In essence, this was a guaranteed income for farmers. If for example, wheat brought $2.00 a bushel on the open market and the target price based on the rolling average income was $3.00 a bushel, then the farmer would get a check from the government for $1.00 for every bushel he sold.
The Brannan plan became a major national issue and divided the farm community. The Farmers’ Union supported it, but the Farm Bureau, the Grange and the National Council of Farmer Cooperatives – none of whom had been consulted as the plan was developed – mustered enough votes to defeat it.
Basically, Congress’ plan of fixed price supports at 90 percent of parity for staple crops was continued until 1950, and flexible price supports between 60 and 90 percent were extended until 1954.