The Farm Crisis of the 1980S in Iowa: Its Roots and Its Inner Workings Sue Ann Atkinson Iowa State University

Iowa State University Capstones, Theses and Retrospective Theses and Dissertations Dissertations 1999 The farm crisis of the 1980s in Iowa: its roots and its inner workings Sue Ann Atkinson Iowa State University Follow this and additional works at: https://lib.dr.iastate.edu/rtd Part of the Agricultural and Resource Economics Commons, Agricultural Economics Commons, Economic History Commons, Income Distribution Commons, and the Land Use Law Commons Recommended Citation Atkinson, Sue Ann, "The farm crisis of the 1980s in Iowa: its roots and its inner workings" (1999). Retrospective Theses and Dissertations. 16849. https://lib.dr.iastate.edu/rtd/16849 This Thesis is brought to you for free and open access by the Iowa State University Capstones, Theses and Dissertations at Iowa State University Digital Repository. It has been accepted for inclusion in Retrospective Theses and Dissertations by an authorized administrator of Iowa State University Digital Repository. For more information, please contact [email protected]. The farm crisis of the 1980s in Iowa: Its roots and its inner workings by Sue Ann Atkinson A thesis submitted to the graduate faculty in partial fulfillment of the requirements for the degrees of MASTER OF COMMUNITY AND REGIONAL PLANNING and MASTER OF ARTS Co-majors: Community and Regional Planning; History Major Professors: Jerry Knox and R. Douglas Hurt Iowa State University Ames, Iowa 1999 ii Graduate College Iowa State University This is to certify that the Master's thesis of Sue Ann Atkinson Has met the thesis requirements ofIowa State University Signatures have been redacted for privacy iii TABLE OF CONTENTS LIST OF FIGURES IV LIST OF TABLES V ABSTRACT Vll CHAPTER ONE. INTRODUCTION 1 CHAPTER TWO. HOW DO LOAN FUNDS ENTER THE AGRICULTURE SECTOR 27 Were loan funds always necessary 27 Was agricultural credit available when and where it was needed 36 What was the settlement ofIowa like 46 Did creation of the Farm Credit System and FmHA improve the situation 53 What was the farm mortgage like in Iowa 57 CHAPTER THREE. FARM INCOME 66 What is farm income 66 The historical debate in the U.S. on how to help farm income 68 What did Iowa look like in the 1930s 85 CHAPTER FOUR. THE FARM CRISIS OF THE 1980s 94 Events in the 1970s 94 The 1980s 101 What was happening in Iowa 110 How the Farm Credit System put more income into the Loss Accounts 116 CHAPTER FIVE. THE IMP ACT TO IOWA 124 Farm restructuring caused a change in the demographics 124 Changes in land use planning l30 A study for the future of livestock in Iowa 135 A more encompassing plan for Iowa as a whole l39 Understanding the context of change 141 Conclusion 145 APPENDIX A. MAPS OF IOWA 147 APPENDIX B. LOAN ANALYSIS FORM AND TRIAL DOCUMENTS 155 REFERENCES 172 iv LIST OF FIGURES Figure 1: Iowa farm debt by lender 1960-1969 62 Figure 2: Iowa farm debt by lender 1970-1979 63 Figure 3: Iowa farm debt by lender 1980-1989 64 Figure 4: Iowa farm debt by lender 1990-1997 65 Figure 5: Average on-farm and off-farm income 68 Figure 6: Farm income as percentage of debt 1950-1990 89 Figure 7: Iowa farm expense as percentage of income 1949-1989 90 Figure 8: Iowa farm debt as percentage of income 1960-1997 91 Figure 9: Iowa non real estate debt as percentage of income 1960-1990 92 Figure 10: Average lending rates by farm lenders 1970-1990 99 v LIST OF TABLES Table 1: Starting dates of some early banks 39 Table 2: Iowa farm debt 1960-1990 60 Table 3: Breakdown offarm income 67 Table 4: 1970 U.S. real estate farm debt by lender 96 Table 5: 1970 Iowa real estate farm debt by lender 96 Table 6: 1980 U. S. real estate farm debt by lender 101 Table 7: 1980 Iowa real estate farm debt by lender 101 Table 8: 1985 U. S. real estate farm debt by lender 106 Table 9: 1985 Iowa real estate farm debt by lender 106 Table 10: Farm Credit System Provision for Loss Account 1984-1989 116 Table 11: Average value per acre for Iowa farms 1975-1986 118 Table 12: Iowa farm operators by age cohorts 1964-1987 125 Table 13: Number of farms and acres of farms 1964-1990 125 Table 14: Breakdown of Iowa farm ownership 1969-1987 126 Table 15: Iowa farm income breakdown by source 127 Table 16: Iowa population by age cohorts 1980 and 1990 128 Table 17: age cohorts for Greene County Iowa 1980 and 1990 129 Table 18: Age cohorts for Jasper "County Iowa 1980 and 1990 129 Table 19: Off-farm and on-farm earnings for U.S. farmers 1992-1997 136 1 CHAPTER ONE INTRODUCTION Was the farm crisis of the 1980s just another bad episode in agriculture that can be traced back to colonial days? Or, can it be demonstrated that an ideological battle over policy in this country (going back to its founding) has been taking place? As the political forces on each side of this ideological battle have struggled for control over policy and its resulting legislation, the periodic uprisings of farmers has provided testimony that many in the farm sector were not happy with some of the policies. The ideological battle influenced agriculture policy, land policy, banking, monetary policy, and trade policy, as well as the response to natural disasters that have plagued farmers. The political forces for one of these policies finally gained sufficient strength to carry out its planned restructuring of the agriculture sector in the 1980s, in the belief that this would ultimately be in the best interest of a "more efficient" market system. It was the imposition of this policy that caused the farm "crisis" of the 1980s. When reading accounts and interpretations of the crisis, the ideology of the writer should be known in order to understand the perspective of the narrative. Historians generally agree that thinkers of the Enlightenment influenced the founders of the United States. The list includes Montesquieu, Locke, Hume, Grotius, Bolingbroke, Plato, Rousseau, and others. The Enlightenment began approximately 100 years before the 2 American Revolution. The ideas, therefore, being discussed and developed by the thinkers in and around this movement were coming to fiuition at a time when the American colonists were discussing forms of government, the responsibilities of government, and how people and governments relate. One of the members of the European group of philosophes (as they called themselves), Benjamin Franklin, (acting as American representative) started a similar group of philosophes in the colonies that included Thomas Jefferson and James Madison. 1 With the relatively small number of intellectuals in the colonies, to say that they probably interacted would not be out of line. This is not to assert that they agreed on everything (anymore than the European philosophes agreed on everything), but merely to say that they exchanged ideas. While Alexander Hamilton, for example, is not mentioned as being a part of the Franklin circle ofphilosophes, it can be shown that he was familiar with their writings. In an editorial rebutting a Tory who had expounded on natural rights and the right of the Parliament to tax the colonies, Hamilton stated: "I would recommend to your perusal, Grotius, Puffendorf, Locke, Montesquieu, and Burlemaqui. ,,2 Ideas both act upon, and are acted upon by, people and events. The American colonies, therefore, presented a unique opportunity to be a laboratory in several ways. There were vast resources that were mostly untapped, although various countries (through royal courts) laid claim. These royal courts were composed of an aristocratic elite who (as historians have written) fought with each other over resources, and who parried for positions of wealth and influence within their own hierarchy. The developed parts of the world, up to 1 Thomas 1. Schlereth. The Cosmopolitan Ideal in Enlightenment Thought: Its Form and Function in the Ideas~of Franklin. Hume. and Voltaire. 1694-1790 (Notre Dame: University of Notre Dame Press, 1977). - Alexander Hamilton, Selected Writings and Speeches ofAlexander Hamilton. eel Morton 1. Frisch (Washington, D.C.: American Enterprise Institute for Public Policy Research, 1985), 19. 3 the discovery and settlement of the American colonies, were already divided among this group of elite aristocrats. This allowed them to maintain their power over the masses, who did not have access to these resources due to the political power, the economic power, and the social customs (one of which was that the elite were elite by divine providence -- that was the natural order of the world). The resources of the American colonies were sufficient to potentially cause shifts in this established balance of power, depending on who would actually gain control over them. If one assumes that the object of people in power is to maintain their positions of power, then it becomes more understandable why efforts would be expended to prevent the rise of a potentially rival power. During the time of the Enlightenment (generally the 100 years leading up to the American Revolution), the American colonists were increasingly asserting more independent control over their domain. Their independence from Britain would offer the opportunity to chose a fonn of government and decide which philosophy would provide the basis for their form of government. Whoever exercised political control through this new government would also exercise control economically over the distribution and/or the use of resources, thus causing a social impact. Independence from the royal court (and the aristocratic elite who maintained their positions through that court and had been benefiting from the colonies through the mercantile system) would create another source of power outside of the hierarchy already in place.

Load more