Who can introduce American agricultural policy?

First, the historical evolution of American agricultural policy

The agricultural policy of the federal (central) government of the United States is the result of the interaction of three factors. First, natural factors such as land, population and climate, second, market factors and third, political factors. The development of American agricultural policy since the founding of the People's Republic of China can be roughly divided into two stages. Before the 1920s, the American government basically adopted a laissez-faire and non-intervention policy towards the agricultural products market, but promoted the development of agriculture by investing in the economic base. Since the 1930s, the US government has directly intervened in the agricultural products market through financial subsidies and other means.

1. laissez-faire and agricultural extension

Like all other countries, the economic development of the United States began with agriculture. In early colonial countries, the production and export of agricultural products and raw materials were their economic lifeblood. /kloc-At the beginning of the 20th century, agricultural products accounted for 75% of the total export value of the United States. In 1930s, more than 75% of tobacco and more than 80% of cotton were exported abroad. Until the civil war, cotton alone accounted for more than half of American exports.

/kloc-In the second half of the 20th century, with the development of western territories, the arable land in the United States tripled. Although the price of agricultural products fell sharply after the civil war, compared with non-agriculture, it still showed a spiral upward trend for more than half a century. There are three main reasons. First of all, the demand from Europe has greatly increased. Foreign markets absorbed one third of new agricultural products. Nearly half of the new wheat products are sold overseas. Second, the growth of American cities and immigrant population has stimulated the demand for agricultural products. Third, with the development of industrialization, the growth rate of agricultural productivity in the United States is much lower than that of manufacturing productivity.

From the civil war to the 1920s, the American government adopted a non-intervention policy on the fluctuation of agricultural product market prices. But it was not completely passive, but adopted a series of investment policies, which indirectly or directly promoted the development of American agriculture. First of all, the federal government and many state governments invested heavily in canals and railways, which greatly reduced the transportation cost of agricultural products. After the Civil War, the increase of American agricultural products export largely benefited from the reduction of transportation costs, which enhanced the competitiveness of American agricultural products in the European market.

From 65438 to 0862, the federal government began to implement a series of policies and measures specifically aimed at agricultural development. 1862, President Lincoln signed the land-grant universities Act and the Homestead Act. The former bill stipulates that the federal government will grant state-owned land to the States free of charge, and the States must use the obtained land and its income to build universities with agronomy and engineering as their main disciplines. The latter bill stipulates that all farmers who have cultivated state-owned land continuously for five years can obtain the ownership of 160 mu of state-owned land only by paying the required certificate fee. In the same year, the United States Department of Agriculture was established. 1987, the us congress passed a law to establish agricultural experimental stations funded by the federal government in various States. In the 30 years after 1862, USDA's expenditure grew at an average annual rate of 13.2%.

A series of policies and measures for supporting agriculture implemented by the federal government of the United States since the second half of the19th century are not only the result of socio-economic changes such as territorial expansion, population increase and accelerated industrialization in the United States, but also the product of changes in its political system and power. Here, take the passage of the land-grant universities Bill as an example. The bill was introduced by Representative Moreel from Vermont. According to the proposal, each state obtains state-owned land from the federal government free of charge according to the number of senators and representatives it owns (calculated on the basis of 300,000 acres of land per representative or senator). This proposal was strongly supported by the eastern state legislators with a small land and a large population. However, since almost all the "state-owned land" held by the federal government is located in the west, legislators in western States are worried that once this proposal becomes law, a large area of land in the west may be used for speculation by giant businessmen in the east. A congressman representing Wisconsin criticized the proposal for "turning the whole west into the territory of new york". Western lawmakers are also worried that the land-grant universities Bill may hinder the passage of the homestead law and the railway bill requiring the federal government to fund the construction of the transcontinental railway. These two bills are the key to the development of the western region and are fought for by western legislators.

Due to the opposition of western parliamentarians, the land-grant universities Bill was once stranded and failed to pass the special committee of the National Assembly. But it was finally passed by the National Assembly in 1862 and the Homestead Law. The reason is determined by the democratic electoral system in the United States. 1862 is the election year. If * * * and the party with a majority in Congress can't win the vote in the Midwest, they can't win the election. 1860 * * * and the party's national congress in Chicago made a resolution to support the Homestead Law and build a continental railway. With the approaching of 1862 general election, it is necessary for * * * and the party to promote the legislation of homestead law.

Therefore, * * * and the leadership of the Party promoted the adoption of the Homestead Law in the National Assembly in May 1862. Western lawmakers reciprocated and stopped opposing the land-grant universities Bill. Senator Pomeroy of Kansas said that the eastern states should be granted land by universities, because almost all eastern members voted for the Homestead Act and will never get the land again. The Homestead Law and land-grant universities Law were passed in the same year of 1862, which was the result of the interest game between the members representing the East and the West.

2. Financial subsidies and direct intervention

Although the government has taken the above-mentioned measures to support agriculture, the agricultural development in the United States has been in a state of ups and downs since the Civil War. Especially during the First World War and the Great Depression, American agriculture experienced unprecedented ups and downs. At the beginning of the war, the total net income of American agriculture was $3.6 billion. By 19 19, it will reach $9.3 billion. But after only two years, the income dropped sharply to $3.7 billion. Later, in the 1920s, agricultural income gradually rose to $6 1 billion, but it fell to $654,380+900 million again in the Great Depression of 1.932. 1932, agriculture still employs a quarter of the American labor force, but in the greatly reduced national income, agriculture only accounts for about 7%. Many farmers who are heavily in debt and trapped in poverty are desperate. They either block the transportation of grain into the city, or gather people to make trouble, violently resist the law, and threaten the personal safety of law enforcers.

The direct cause of the agricultural crisis is the sharp drop in the prices of agricultural products. With the same price, the wheat price of 1932 is only a quarter of that of 1925. 10 From 1929 to 1932, the average prices of agricultural products such as cotton, wheat and rice have more than doubled. 1929, a bushel of corn is worth 80 cents. 1932, only worth 32 cents.

Helping agriculture is one of the main tasks of Roosevelt's New Deal. The core of Roosevelt administration's agricultural policy is to control the price of agricultural products through government intervention and avoid hurting farmers. To achieve this goal, the government has taken a series of measures. The first is to encourage farmers to give up part of their cultivated land (fallow), and the government will give monetary compensation. This measure aims to reduce the supply of agricultural products in order to increase the prices of agricultural products. The second is the government loan price support system. Specifically, any farmer can seal the grain after harvesting. Then, with food as collateral, loans are made to commodity credit companies under the jurisdiction of the Federal Ministry of Agriculture. The government sets the loan price for each unit of grain. The loan amount of a commodity credit company is equal to the product of the sealed grain quantity and the loan price. If the grain price rises above the loan price, farmers can sell the grain and repay the loan in cash. If the price does not rise above the loan price, farmers can repay the loan with the mortgaged grain. Farmers voluntarily participate in the government loan price support system. Anyone who participates in this system must sign a fallow contract with the government. In other words, only those who sign fallow contracts with the government can enjoy the treatment supported by government loan prices.

From the 1930s to the mid-1960s, the agricultural product price support system implemented by commodity credit companies has been the pillar of American agricultural policy. In fact, the price of government loans has become the "pot bottom" price of agricultural products. It has played a role in supporting the prices of agricultural products. For example, from 1948 to the end of 1950s, except for 5 1 and 52 years, the market price of corn was higher than the government loan price, and other years were either flat or the latter was higher than the former. Because the government's protective price is often higher than the market price, farmers often give up their grain mortgaged to the government and do not return their loans in order to obtain the benefits of the protective price being higher than the market price. Therefore, the US government holds a large number of agricultural products. From 65438 to 0959, corn, cotton and wheat held by commodity credit companies accounted for a quarter, a third and more than half of the annual output respectively. In order to digest the grain held by commodity credit companies, the US government passed the Foreign Food Aid Act (PL-480) in 1954. By 1960, half of American wheat exports were carried out through this project. From 196 1, the United States began to implement the food roll project to provide free food for the poor. One of its main purposes is also to support the prices of agricultural products.

Since the 1970s, the US government has abandoned the policy of price support for agricultural products and paid cash subsidies directly to farmers. Generally speaking, the government sets the target price of agricultural products every year, and gives cash subsidies to farmers according to the difference between the market price and the target price. The biggest advantage for the United States is to increase the competitiveness of American agricultural products in the world market, while the old price support system is harmful to its international competitiveness. In fact, one of the main reasons for the United States to replace the price support policy with the cash subsidy policy is to cope with the pressure of European countries to expand their agricultural export capacity. The change of American policy had an immediate effect. 197 1 year, the trade surplus of American agricultural products was $65,438.09 billion, and it increased to $27 billion/year.

Since the 1970s, the world grain market price was once higher than the target price of the US government, except for the two oil crises (1974-1976, 1978- 198 1) in the mid-1990s. The difference between the two reached its peak in the mid-1980s. Therefore, from 1986 to 1989, the US government paid more than10 billion US dollars in cash to farmers. The payment of 1987 is close to17 billion dollars.

From 65438 to 0996, President Clinton signed the Federal Agricultural Improvement and Reform Act (also known as the Agricultural Freedom Act), which legally decoupled the government's support and subsidies for agriculture from the prices of agricultural products for the first time. The bill stipulates that during the period from 1996 to 2002, the cash subsidy paid by the government to farmers year by year is fixed, and it is no longer affected by the price changes of agricultural products. Its total amount will drop from $5.6 billion in 1996 to $4 billion in 2002. The bill predicts that after seven years, the total amount of government cash subsidies to farmers will be $36 billion. The amount of this plan is far below the actual cash subsidy of $55.2 billion from 1990 to 1995. This bill was then hailed as the most important market-oriented reform of the US government since the New Deal.

However, from 1996 to 2002, the actual agricultural cash subsidy paid by the US government was far greater than its agricultural law plan of $36 billion. Only in the five years from 1996 to 2000, the US federal government paid 61600 million dollars in cash to farmers. 1999 and 2000 both paid more than $20 billion. The direct cause of this situation is a series of emergency agricultural relief bills passed by the US Congress and signed by President Clinton. The Agricultural Security and Rural Investment Act of 2002, which was passed by Congress and signed by President Bush, plans to provide huge subsidies to agriculture in the decade from 2002 to 2005, with an annual average of $19 billion. The biggest difference between this bill and the 1996 agricultural bill is that it links the government's subsidies and support to agriculture with the price changes of agricultural products, and cancels the market-oriented reform law of 1996.

The American government's continuous support and subsidies for agriculture since the New Deal in the 1930s is one of the most important factors that determine the development of American agriculture after World War II. The government's agricultural policy ensures that farmers have a stable high income, thus giving them the confidence to invest in new agricultural technologies, such as hybrid varieties, large machinery, fertilizers and pesticides. Agricultural policies reward highly specialized and capital-intensive agricultural production methods. Because this way can greatly increase the output of agricultural products, and the more agricultural products farmers produce, the more government subsidies they get. For example, in 1997, large farms with cultivated land of more than 1000 mu only accounted for 9.2% of the total number of farms in the United States, but they accounted for 66. 1% of cultivated land and received 48.4% government subsidies. Although the United States has unique agricultural resources and a developed capitalist market, American agriculture can become a capital and technology-intensive industry with great international competitiveness without the active policy support of the US government.

Second, the analysis of the reasons for the formation of American agricultural policy

Why can the US government continuously provide support and subsidies to agriculture? According to neoclassicism, that is, western mainstream economics, government intervention in agricultural market is harmful to economic development. In neoclassical economics, the only theory that can be used to justify the intervention in the grain market is the imperfection of the grain market. Compared with most other commodities, the production and consumption of grain are less affected by price and income factors. In the words of economics, the price-income elasticity of grain is low. From the demand side, grain is probably the commodity with the lowest price and income elasticity. People will not reduce the food consumption necessary to maintain their lives because of rising food prices, nor will they greatly increase food consumption because of increasing income. From the perspective of supply, the low price elasticity of grain is due to the fact that a single farmer cannot predict the market demand for grain, and it is difficult for a single farmer to adjust the output of the year according to the changes in market conditions after sowing. Therefore, if there is no government regulation and intervention, the market price of grain will inevitably fluctuate greatly. Small changes in output often lead to large-scale fluctuations in food prices, and ultimately lead to fluctuations in the food market between supply and demand. The complete marketization of agricultural products market not only harms the interests of farmers, but also harms the interests of the whole society.

However, the imperfection of grain market is a normative concept. It can provide a theoretical defense for the U.S. government's agricultural policy, but it cannot explain why the U.S. government can continuously provide support and subsidies for agriculture. Only from a political point of view can this problem be explained. Specifically, the votes in the hands of American farmers determine that the US government can continuously provide policy support to agriculture. There is no doubt that farmers are the main beneficiaries of American agricultural policy. Since 1980s, the proportion of direct cash payment from the federal government to farmers in the total agricultural net income has been between 7% and 66%. At present, 25% of the market value of land owned by farmers comes from government financial subsidies. Therefore, it is in the interests of farmers to use the votes in their hands to put pressure on members of Congress and administrative departments to ensure the continuous support of agricultural policies.

However, if the agricultural policy of the United States is regarded as the result of farmers' political pressure, we must explain such a problem: at present, the labor force engaged in agriculture in the United States is only 2 million, less than 2% of the American population. According to the principle of one person, one vote, the political influence of American farmers should have been marginalized, but in fact, the political energy of American farmers is very large. Why?

The best theory to answer this question was put forward by stigler, a Nobel laureate in economics. Smith pointed out in 197 1 that the essence of government economic control legislation is to transfer wealth among social members in an authoritative way. The food price support policy implemented by the American government in the 1930s and 1960s can be regarded as the transfer of wealth from consumers to farmers, while the subsequent income support policy for farmers is the transfer of wealth from taxpayers to farmers. Secondly, legislators seek re-election, which means that their legislative actions focus on seeking political support from voters. Third, interest groups compete to provide support and pressure to legislators in order to obtain favorable legislation.

Under the political system of the United States, the country's economic policies are generally biased towards those interest groups that can effectively put pressure on Congress. Smith believes that the political energy of an interest group depends not only on its scale, but also on its organizational level. The degree of organization of an interest group depends on the extent to which it overcomes the phenomenon of "hitchhiking" in collective behavior. For example, as Mancur Olson pointed out in his masterpiece The Logic of Collective Behavior, compared with large-scale groups, interest groups with smaller population have deeper interest in collective behavior and lower supervision costs, so it is easier to overcome the problem of "hitchhiking" and have higher organizational level and greater political energy.

American farmers since the New Deal belong to this kind of interest group with small scale, high degree of organization and great political energy. First of all, due to the small population, the government's agricultural support policy is related to the vital interests of every farmer. For example, in 2000, the net agricultural income of the United States was $46.4 billion, of which nearly half ($22.9 billion) came from the direct cash payment of the federal government. In other words, the per capita income of two million farmers from government financial support is as high as 1 1450 USD. Most of these financial subsidies eventually come from federal taxes. The total number of taxpayers in the United States should be above 200 million. The per capita agricultural subsidy burden is about 100 USD. Of course, their interest in agricultural policy is far from this.

American farmers' high degree of organization, wide range and great political influence have always been recognized by American political economists. Truman, a political scientist, pointed out in the 1950s that "obviously, a group covering many agricultural states like the National Agricultural Association is more likely to influence the decision-making of Congress than urban interest groups." This situation has not changed substantially so far. Today, although the labor force engaged in agriculture is less than 2% of the population of the United States, there are still 10- 15% counties that take agriculture as the primary industry. Without the political support of farmers, both the Democratic Party and the Party may lose the election.

Finally, the political energy of American agricultural interest groups also benefits from the interest exchange convention of the US Congress. Since the1960s, members representing agricultural interests have often formed voting alliances with members representing the interests of the urban poor and members representing environmental protection. The free food stamp project is related to the ticket market of many city district councillors. Therefore, members representing agricultural interests and members representing the interests of the urban poor often support each other and benefit from each other in the legislative process.