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Fourth International, June 1942


C. Charles

The Crisis in American Agriculture


From Fourth International, vol.3 No.6, June 1942, pp.179-180.
Transcribed, Edited & Formatted by Ted Crawford & David Walters in 2008 for the ETOL.


The world was shocked when The Grapes of Wrath appeared to describe the tragedy, in the form of a novel, of a group of Oklahoma farmers wrenched from the land by the tractor and the duststorm to hunt on the roads of California for a morsel of food. But what is often overlooked is that the Joads of Oklahoma were not the only group. The term “Arkie” is less known than “Okie,” but they describe victims of the same economic process; 25,660 farms disappeared in Arkansas in the decade ending 1940. Similarly 45,632 farm families, totalling about 400,000 individuals, were forced off the land in the Great Plains area of North and South Dakota, Nebraska and Kansas during 1930-40, to wander in the fruit and hops regions of the Pacific Northwest. Over 124,000 farms were consolidated into larger units in the Southern states of Alabama, Mississippi, Louisiana, South Carolina and Georgia during the same period.

The disappearance of small farms with the resultant proletarianization of the former independent farmer, tenant or sharecropper is national in scope. How does it come about?

The first thing that must be remembered is that the original ideal of a nearly self-contained producing and consuming unit long ago became a Utopian chimera. With the growth of industry centered in urban regions, the city masses had to be fed by the farm.

Likewise the industrial raw materials used in industry were found primarily on the farm: wool, cotton, flax, leather, tobacco. With irresistible force the farmer became drawn into the world market. He specialized in producing those cash crops for which his land was best suited. And as he specialized in producing cash crops he cast out one by one the home industries which formerly supplied the greatest part of his needs.

The end result was no longer the “ideal” farmer independent of the “casualties and caprices of the customer.” Instead the farmer sells his crops on the national and world market, and buys his bread, butter, eggs, milk, meat, fruits and vegetables from the store, let alone clothes and fuel.

Capital Required for Farming

With the closing of the frontier, the supply of land was cut off and land rose in price. With technological development, expensive machinery became a prime necessity to the farmer. To become a farmer the necessary ambition, the strong back, the plow, the mule and axe no longer suffice. Finances are needed. This is seen in the following table:









(includes buildings)


















The new farmer is therefore generally in debt from his first days on the land. This can be seen in the growth in the size of farm indebtedness. According to the House Committee on Public Lands: “Farm mortgages grew by leaps and bounds – from a total of slightly over three and one-quarter billion dollars in 1910 to nine and one-quarter billion dollars in 1930.” In 1940, this figure was $6,909,794,000, reduced mainly through foreclosure and other types of financial delinquency. Over 40 per cent of the farms in the country are mortgaged, with mortgages accounting for about 45 per cent of the total value of the farms.

Generally the later an area was opened for settlement the higher is the proportion of large-scale farms to small farms. Oklahoma and Texas were opened late in the history of the country; in both large-scale farming dominates. California’s Imperial Valley was opened in the first years of the present century and it is now a center of factory production on the land. The area called the Bootheel of Missouri was within ten years under the sway of large-scale and corporation farming. In the newly opened areas of Arizona, entire counties are under the control of a handful of growers.

To be able to start farming today requires on the average $8,000. The fledgling farmer has to borrow to go into farming. His tenuous hold on the farm is usually terminated by an economic crisis when his farm is foreclosed and the land taken by some large operator. In the newly opened regions .the stage of independent family-sized farms was telescoped into a very brief period or skipped entirely.

Interest on loans is an important item in the farmer’s budget. The figures are given in the table below:



Total Net
Cash Income




% of













Thus a substantial part of the farmer’s income goes to finance capital as interest.

A huge increase in farm indebtedness took place during the first World War, which was based on the high prices of farm produce. If a loan of $1,000 was taken by a farmer at the rate of 8 per cent per year when wheat was selling at $1 a bushel, 80 bushels paid the yearly interest. If prices sank to one-third of the former amount, 240 bushels of wheat would be needed to pay the interest. With the end of the war and with the decline in prices which became catastrophic during the economic depression that began in 1929, it became impossible to meet the interest and principal charges. Foreclosures spread throughout the farm areas. Banks became important landowners.

Rise and Decline of Tenancy

The process that increased farm indebtedness also resulted in the rapid development of farm tenancy, sharecropping and absentee landlordship. If a farmer could no longer begin as the owner of a farm, he hoped to be able to climb to independence starting as a tenant or sharecropper. We find therefore that sharecropping and tenancy, which in 1880 totalled 25 per cent of all farms, had by 1935 increased to 42 per cent of all farms. Each year between 1927 and 1937, according to the President’s Committee on Farm Problems, the number of new tenants totalled 40,000 as independent farmers were forced to take up farming, not in their former status, but as tenants.

Rents paid by farmers for the use of the land, which in 1910 was $561,000,000, in 1937 reached $829,000,000. Approximately 30 per cent of the farmer’s cash income was spent in that year in rent and interest.

In the Southern states, the sharecropping system has its roots in the old plantation. Emancipation proclaimed political and civic freedom for the former slaves but left the land, the basis of the power of the Southern ruling class, in the hands of the former owners. The Negro, having no land, was forced to go back to work on the old plantation, in the form. Of working on shares.

In Texas, a sparsely settled territory, the sharecropper system assured a constantly available labor supply. Thus Texas, while still in its pioneer stage, counted 37.6 per cent of its farmers as tenant-operated. In 1910 this figure had increased to 52.6 per cent and by 1930 to 60 per cent.

The introduction of machinery is now changing the entire pattern of agriculture. [1] Mechanization makes it more profitable to consolidate delinquent farms into larger holdings, to drive croppers and tenants off the land.

The industrial revolution arrived on the farm late, but it has come with a fury that compensates for its tardiness.

In industry the basis of the industrial revolution was water and steam power, neither of which was applicable to the farm, where the development of machinery long was limited to those operated by animal motive power. But the internal gasoline combustion engine wrought a transformation. Based on the truck and tractor, industrialization on the land has spurted forward. Those who cannot buy machinery fall in the competitive fight and their land is taken up by those who can secure the modern methods of production.

In the words of the Yearbook of Agriculture, “mechanization fits in with large scale operations. It involves larger outlays of capital. It makes farm ownership more difficult for the farmer of limited means. It crowds tenants and sharecroppers off plantations.”

In 1920 there were less than a quarter of a million tractors on American farms. Ten years later the number increased to 920,021 and by 1940 the figure was 1,567,430.

In Oklahoma the number of tractors was nearly 60,000 in 1940. The introduction of the tractor has been an irresistible force for the consolidation of operating units. Where formerly four families of various tenures worked, two or even one remains. Nearly 5,000 farm families numbering about 25,000 persons “disappeared” in the state each year between 1935 and 1940.

In Texas the last props are being knocked from under the tenant and cropper system, primarily as a result of the introduction of machinery. One writer estimates that between three and. five sharecroppers are displaced by each tractor. Since 1935 about 10,000 families have been displaced each year. The number of sharecroppers decreased in the year 1935 by 28,654, and during that year the number of farm laborers increased by 25,601.

In those regions where the sharecropper retains some, although a weakening, hold it is due only to the miserable conditions of the tenants and croppers which make it cheaper to use tenants than to introduce machinery. This is true of the Piedmont region of the South, but in Texas and Oklahoma the topographical conditions make it possible to secure, by the use of tractors and wage labor, greater profits. This is of course the decisive test: the amount of profits.

The driving of huge numbers of tenants and independent farmers from the land results in a progressive worsening of the conditions and terms of the remaining tenants and croppers, as competition by the dispossessed farmers for the available lands permits the landlords to increase rents. Landlords are now charging a cash rental for pasture land as well as for the shack which formerly had been supplied free. In Texas croppers . find it increasingly difficult to get land on the basis of “halves.” The term is itself descriptive. In the years before the first World War the almost universal system allotted only one-fourth of the cotton and one-third of the other crops to the landlord.

Other Effects of Mechanization

In the wheat fields of Kansas and surrounding areas, the dividing line between machine methods and hand labor is the year 1926, when the combine harvester was developed. Prior to that year, each harvest required 200,000 workers to reap the grain. In its first year, the combine harvester displaced 33,000 workers and by 1933 had eliminated 150,000 workers.

The abolition of the jobs of the workers was merely the prelude to the disappearance of the small farmer as the capitalists were quick to see the possibilities for profits in large factories producing wheat. Many independent farmers followed the harvest hands into oblivion.

Each mechanical corn picker displaces from five to six human corn pickers. Over 65,000 mechanical corn pickers are now in use in the Corn Belt of the Middle West. The result is fewer and larger farms.

There are other, indirect, effects of mechanization upon the independent farmer that weaken his economic position. With the displacement of farm draft animals the need for commercial fertilizer is intensified; with the need for evermore, modern machinery to keep from going under in competitive struggle the requirements for credit to buy machinery grow greater; with the need for credit, machinery and fuel grows the need for cash crops to purchase these items, and thus is made all the more impossible farming as a “way of life.” As the farmer sinks deeper into the vortex of industrialism and commercialization the stranglehold of finance capital becomes ever tighter.

The firms selling equipment, fuel, providing credit, etc. are monopolistic. Two farm machinery concerns stand in marked contrast to more than six million farmers. The monopoly manipulates the price of the commodity it sells with relatively great effectiveness; the prices of the farm products are set by the market gerrymandered to benefit the monopoly. Between the years 1929 and 1933 the prices of agricultural commodities declined 63 per cent, but the price of farm equipment was reduced only by 6 per cent.

In the decade between 1927 and 1936 International Harvester made an average profit of 10.61 per cent each year and Deere Company made 11.91 per cent. These two companies control farm equipment production to all intents and purposes. Farm machinery in its direct cost, depreciation and operation expenses amounts to 21 per cent of the cash income of the farmer in 1939 as compared with less than seven per cent in 1913.

The tobacco companies in the 21 years ending 1937 averaged an annual return of 16.44 per cent. The National Dairy Company made 20 per cent each year from 1927 to 1932. In its poorest year it netted 6.4 per cent, 1936 – 12.7; 1937 – 9.6; 1938 – 1O.2; 1939 – 11.6. Borden took in profits of 14.2 per cent in 1929; its low was 3.4 per cent in 1934 and it earned in 1936 – 7.9 per cent; 1937 – 6.3; 1938 – 6.6; 1939 – 8.2.

The TNEC monograph, Competition and Monopoly in American Industry, states:

“Agriculture is notoriously unprofitable. It is estimated that farming yielded a gross income, including revenue from the sale of farm products, the value of products consumed on farms and rental value of farm homes, of $21,288,000,000 in the year ending June 30, 1927; the subtraction of rent, wages, interest, and other payments, left a net income of $3,452,000,000; but interest on the farmer’s Investment, computed at 4.5 per cent, plus wages for the farmer’s labor, figured at $540 a year, amounted to $5,169,000,000; the industry therefore incurred a net deficit of $1,717,000,000 in that year.”

This was in the “prosperous” year of 1927, and yet the farmers after paying themselves wages of less than $10.50 a week still showed a net deficit. The farm equipment trust, the huge tobacco companies, the milk trust, the milling companies, the railroads, the packing houses, all showed substantial profits ... monopoly prices at the expense of the dirt farmer.

The inferior economic position of the small farmer in relation to the trusts that sell to him or buy his products is manifested in other phases of farm life. The large canning, sugar, ginning and shipping concerns buy the products of the independent farmers (besides often producing the agricultural products themselves). The buyers are few and easily come to an understanding with one another, while the farmers are many and atomized. The disadvantageous position of the independent farmer in relation to th large combinations of capital is manifested in the reduction of the small farmer to only nominát independence. The large company which buys the product, and fixes the price of it by contract at the beginning of the season often sets the wage rate for any wage labor hired by the farmer, establishes the time of planting and the method of cultivation. It instructs the farmer as to the kind and quality of crop to be planted and chooses the time and manner of picking the crop.

In these ways the large processing and shipping concerns secure a deathhold on farming. If besides securing their raw material from the independent farmers, the large capitalists also own their own farms, they can take a “loss” on the farming end of their operations and thus drive down the price of the produce bought from the farmers. They then can make up their “loss” on the processing end, while the farmer is left without recourse. Thus the ground is prepared for the further proletarianization and pauperization of the independent farmer. The farmer is driven lower and lower in his living standards as ever greater portions of his income go to monopolistic and large scale enterprises. Finally even the great sacrif ices in living standards do not avail and he is foreclosed.

The Role of Agricultural Exports

The developments taking place in agriculture can only be understood on the background of the decline in exports of agricultural products. In 1919 farmers received $4 billions from exports. By 1936 this had decreased to $709,000,000 and even this figure was lowered in 1939, when exports were $655,000,000.

Among the reasons for this decline are:

“We are now in that blessed state of being a creditor nation. The rest of the world must every year produce at least 1,000 million of goods and service over and above local needs to pay us our pound of flesh in interest charges. It must be axiomatic that our debtors neither will be able to pay nor, what Is more Important, be in a position to borrow further unless they are permitted to produce those commodities they are capable of most easily ... To keep South America and China open for American capital ... the world – and that includes the United States – must be permitted to buy Manchurian (and eventually Mongolian) wheat and soy beans, Uruguayan and Brazilian jerked beef, Argentinian wheat, corn, mutton and chilled beef ...”

If we add to this list Brazilian, Indian and Egyptian cotton, and Near East tobacco as well as other items, we can see how the world market – and even the home market – for American agriculture is receiving strong blows in vital products.

The present war boom in agricultural prices will not result in the continued sky-rocketing increase in prices that took place in the first World War. During that period the United States could sell to most of the world, outside of the actual limited war front, and the enemy powers. Now all the Far East and all the continent of Europe cannot buy American products as the theater of war extends. The clamoring markets available for American agricultural products in the last war are seriously reduced in this. In all probability there will be no boom in agriculture during the second World War such as took place in 1914-19.

The Role of New Deal “Reform”

The AAA program, ostensibly for the relief of the farmer, has acted to increase the tempo of centralization and accumulation of farm lands in ever fewer hands, as a strong incentive was given to landlords to evict sharecroppers and tenants and thereby secure the entire government payment which otherwise would have to be shared with those living on the land. Particularly acute in the cotton areas, this practice can be found elsewhere. The following report was given to the Tolan Committee, concerning a county in Kansas:

“This county in the past seven years has rapidly ceased to be in the small farmer class. Farm after farm has had the Improvements torn down and the acreage cultivated by the hired man. This procedure has reduced the landlord’s taxes and at the same time be has received the entire AAA or soil conservation allotment ...”

Among the “farmers” receiving AAA payments was the Metropolitan Life Insurance Company, which got over a quarter of a million dollars in 1939. In California 2 per cent of the farms received 43.6 per cent of all the payments, while nationally 32 per cent of the payments went into the pockets of 5 percent of those receiving payment.

The decline of the independent farmer drags down with him the country town professional and merchant, whose existence was based on the independent farmer as client and customer. Veritable ghost towns can be found in sections struck by the forces operating in agriculture.

What of the future of the small farmer? The economic forces now at work will continue. Some farmers will sink into subsistence farming on submarginal lands, and thereby struggle to eke out a meager animal existence surrounded by the traditional ignorance of the peasant. (Even now from one-third to one-half of the farmers contribute but a negligible proportion of the marketed farm products. They are subsistence farmers.) This, or proletarianization, is the best capitalism can offer.

The process of mechanization on the farm is far from completed. The development in farm machinery has been mainly in the preparation of the soil and sowing; outside of the combine harvester in wheat and the mechanical picker in corn, harvesting machinery has not developed as rapidly as machinery used in the spring of the year.

Cotton culture is on the eve of the greatest technological revolution since the invention of the cotton gin. If the introduction of the tractor and gang plow had the consequences in cotton that we have described, the effect of the mechanical cotton picker will be cataclysmic as hundreds of thousand’s of cotton pickers will be thrown out of work, the entire sharecropping and tenant system abolished and the independent farmers will lose their land. The mechanical cotton picker is receiving the last touches before being released to the market, according to reports.

Machines in other crops have been or are being perfected: In sugar beets, there are planters, toppers and lifters; a hop picker is in use in many places; a vacuum cleaner apparatus harvests clover seed in 12-foot swathes; a tractor-driven walnut picker is being developed. In May 1937, a mechanical asparagus cutter was exhibited.

Under capitalism these machines can mean only misery for the independent farmer and agricultural worker.

According to the fable, wherever Attila’s horse stamped there grass never again grew. The reputed exploits of this flesh and blood equine become prosaic when compared with the power of the iron horse. People decay and disappear where its hoof print digs into the soil!

(This is the second of three articles on the present state of American agriculture. The first appeared in the May 1942 issue.)


1. Among other ‘factors promoting the introduction of machinery is the one cited by the Implement Record of February 1938: “ … the fact that certain agricultural crops are extremely vulnerable to the strike encourages the farmer to be Interested in dependable methods over which he has control. He has found the machine a faithful and dependable ally.”

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