Designed to address the deteriorating farm economy, the Agricultural Marketing Act of 1929 was the most important piece of farm legislation passed under the Hoover administration. Elected in 1928 as the third consecutive Republican president, Herbert Hoover set out to maintain the economic growth much of the nation had witnessed for the past decade. Despite this apparent prosperity, structural problems persisted in the American economy that ultimately contributed to its collapse. In particular, rural residents and farmers were left out of much of the economic prosperity of the twenties. World War I had created an expanded market for American agricultural goods; but with the cessation of hostilities in Europe, the market contracted as agricultural production on the continent resumed. With shifting market conditions of the postwar period, agricultural prices in the United States steadily declined. While lower prices for many durable consumer goods such as automobiles resulted in increased demand, most people did not purchase more bread as its price dropped.
Rural residents and farmers accordingly faced economic crisis well before the onset of the Great Depression in late 1929. Some 500,000 individuals lost their farms to bankruptcy during the 1920s. In response, farmers made persistent demands on the federal government for action during the course of the twenties. Hoover, who had served as the wartime food administrator, was aware of the poor economic conditions in rural America at the end of the decade. He had supported agricultural legislation such as the CAPPER-VOLSTEAD Act as secretary of commerce under Warren G. Harding. As president, Hoover pushed bills aimed at stabilizing the agricultural economy through a special session of Congress. For Hoover, glutted markets served as the primary factor undermining the health of agriculture in the United States, and he sought to address that problem.
One of the more favored responses advocated by farm organizations was federal support for cooperative arrangements. If farmers could buy, sell, and process through joint efforts, they could control their profits rather than surrender them to “middlemen” agricultural firms, long seen by farmers as one of the primary threats to their economic well-being. Farm cooperatives remained at a disadvantage in marketing their goods, and it was to this problem that the Hoover administration directed its attention.
The Agricultural Market Act created a revolving loan fund of $500 million to help farm cooperatives market their major commodities and purchase surpluses of these goods off the market to force prices up. While not a solution for all farmers, the act helped to support agricultural cooperatives for the producers of perishable products and items that sold on a national, rather than a world, market. Some of the more successful cooperative arrangements were made in the fruit and dairy sector of agriculture. While many cooperatives began as family farms, they came to include such large cooperatives as Sunkist oranges, Land O’Lakes milk, Diamond walnuts, and Ocean Spray cranberries. The Agricultural Marketing Act stood to benefit a key part of the agricultural economy, but it is unclear how much it would have benefited farm producers after 1929. The act went into effect at the same time that the American economy as a whole collapsed in October 1929, and farm prices slumped and then fell catastrophically.
See also agriculture; McNary Haugen Farm Bill.
Further reading: David E. Hamilton, From New Day to New Deal: American Farm Policy from Hoover to Roosevelt, 1928-1933 (Chapel Hill: University of North Carolina Press, 1991).
—David R. Smith