When farmers came to Washington during the farm crisis of the 1970s and ’80s, they felt like the government had set them up to fail. On the surface, farmers were thriving compared to most other Americans suffering through the “stagflation” years of high unemployment and runaway inflation that began in 1973. Global grain shortages and demand from foreign governments drove the price of American wheat to historic highs, promising to boost farm profits. Concerned that demand might actually outstrip supply, the Nixon administration told farmers to plant “fence post to fence post” and fashioned policies to spur further investment in agriculture. American farmers prepared to “feed the world” by expanding their operations, mostly with money borrowed from banks happy to lend to them amid such rosy grain price forecasts.
But by the late 1970s, thanks to fence-post-to-fence-post production and the encroachment of foreign competition, demand for grain slackened. Soon, prices did too. By the end of the decade, the average farm income declined by 25 percent. By the mid-1980s, family farm earnings had dropped by an astonishing 83 percent, from about $35,000 to $6,000 on average. On the other hand, as inflation caused land values to climb, farm wealth appeared on paper to grow substantially. But in reality, the grain price crisis meant that many farmers who relied on cash flow for production did not have what they needed to make ends meet.
At first, many farmers simply borrowed money to stay afloat — banks and lending agencies were happy to oblige. But when the Federal Reserve Bank moved to slow inflation by restricting the monetary supply and allowing interest rates to climb, land values — on which those loans were based — spiraled downward.
Many farmers were suddenly carrying more debt than they and their land were worth and had no way to make it up. Massive waves of foreclosures followed, and rural communities across the Midwest began to experience hard times reminiscent of the Great Depression. Farmers went from confused to angry. One captured the sentiment of thousands: “There’s a lot of people feeling abused by the system.” Despite their productivity, despite following government guidance, American farmers could not get a reasonable price for their products. Government policy, farmers charged, could be summed up as “cheap food policy,” which they saw as privileging consumers over producers.