Federation of Southern Cooperatives
Land Assistance Fund

U.S. Cotton Program & Black Cotton Farmers in the United States: Part One
Historical Overview

By Jerry Pennick* and Heather Gray**
Federation of Southern Cooperatives/Land Assistance Fund
Research conducted in 2006
Copyright 2006
(For a word copy of the study click here)

Black cotton farmers in Georgia, Alabama, Mississippi, Arkansas and Louisiana were the focus of a Federation of Southern Cooperatives/Land Assistance Fund (Federation/LAF) exploratory study in 2006.  In this first part of our study we provided an historical account of some agriculture policies since the New Deal in the 1930’s and their impact on Black cotton farmers. We realize, in fact, that it’s next to impossible to understand the current agriculture system without placing it in the context of agriculture history. In Part Two we will provide a more detailed account of our interviews with Black cotton farmers along with the analysis and recommendations.

Congress recently passed the 2008 Farm Bill as it does every 5 years.  However overtime Congress has diluted some of the excellent New Deal programs developed by Roosevelt’s Secretary of Agriculture, Henry Wallace, in the 1930’s. Many of those programs  protected family farmers against corporate abuse. We make the case in this paper  that the United States should reinvigorate those policies for the protection of family farmers as well as consumers. A totally privatized agricultural system benefits only the corporate giants and we let this happen at our peril!

The purpose of this study was  to explore the United States subsidy program, using cotton as a case study , and the attitudes of Black farmers toward the program. One expected outcome, should the current program end, would be to begin the development of an alternative policy that would help meet the unique needs of Black cotton farmers.

There has been much debate as to whether the U. S. cotton program is largely responsible for the over production of cotton and lower prices that dramatically effect cotton farmers in the developing world. Because of this assumption, there has been considerable pressure on the U.S. government to end its cotton program. The impact on Black cotton farmers in the United States from the possible loss of the program, however, has not been given equitable consideration. This brief exploratory study seeks to begin to remedy this serious omission.

Overview of the Federation of Southern Cooperatives/Land Assistance Fund

The Federation/LAF is now in it’s 41st year of serving the rural south. Its mission is to:

Strive toward the development of self-supporting communities with programs that increase income and enhance other opportunities; and to assist in land retention and development, especially for African Americans, but essentially for all family farmers. The Federation/LAF does this with an active and democratic involvement in poor areas across the South, through education and outreach strategies, which support low-income people in molding their communities to become more humane and livable. The organization assists in the development of cooperatives and credit unions as a collective strategy to create economic self-sufficiency.

The Federation/LAF has offices in four states: Alabama, Georgia, Mississippi and South Carolina. Each state has staff including at least one agriculture specialist. The staff assists its Black farming constituency with debt restructuring, farm management, marketing and a host of technical assistance with the goal being self-sufficiency and building and sustainable communities.

The organization is licensed to work in 16 southern states where it has staff, board members or volunteers who implement the mission.

Statistics On African American Farmers

According to the USDA 2002 Agriculture census there are presently 26,090 black owned farms in America with a total 2,196,264 acres. Since the peak of Black land ownership in 1915 of 15 million acres, the Black community has suffered an enormous loss of land and farms.

Most Black operated farms are relatively small ranging from 40 to 100 acres and many lease land. The 2002 census reveals that Black farmers lease 35%  (1,159,527) acres for farming purposes.

Overview of the History of the U.S. Cotton Program & Black Cotton Farmers

The Black farming community in America has always grown cotton. In fact, it was from the toil of African slaves that cotton became king, particularly after the creation of the cotton gin by Eli Whitney in 1793. The upland cotton that became excessively profitable in the South in the late 1790’s up to the 1860’s just prior to the Civil War, required intensive and extensive labor that was supplied by African slaves. Black cotton workers and farmers created enormous wealth for southern plantation owners and for the industrial mill owners in the northern United States and Great Britain.

After the Civil War when thousands of freed slaves purchased land and began to farm on their own, many of them ventured into cotton. They were skilled cotton farmers after all. And while many Black farmers needed to grow vegetable crops to sustain their families, cotton was generally the cash crop that a number of them relied upon. They worked as either  landowners outright  , tenant farmers or sharecroppers throughout the South. The roots of cotton farming in the Black community run deep.

Blacks in the United States – be they farmers, scientists or the general Black population - are probably among the most skilled and knowledgeable of the cotton crop anywhere on the planet.

The great Black scientist George Washington Carver is renowned for his research on cotton. He is credited with pioneering crop rotation in the United States between cotton and peanuts – the peanut as a legume replenished the soil with nutrients that the cotton plant depleted. Today soybeans (another legume) are also used as a rotation crop by cotton farmers.

Presently, the commodity crops that Black farmers in the south tend to grow are cotton, corn, peanuts, wheat, grain sorghum and soy.

It is important to recognize that while cotton is generally thought of as a “fiber” crop it is quite versatile. It is also incorporated into the “food” sector through cottonseed oil, a base for margarine, shortening, and the hull as meal for animals. So when we refer to cotton, it is not only as “fiber” but ”food’ as well.

To understand and to set the stage of the United States commodity program today, which of course includes cotton, requires going back, at least, to the 1930’s administration of Franklin D. Roosevelt. Under Roosevelt’s New Deal the government began to play a more concrete role in developing policies to protect independent family farmers. Many of the policies developed during this period are still considered some of the best, yet they have never been readily accessible to Black farmers. Included in this narrative are some of the problems with the 1933 programs and how they impacted Black cotton farmers and workers in the South. It might be added that some of the problems cited are relevant today and could be instructive recommendations for subsequent Farm Bills.

The 1933 Agriculture Adjustment Administration (AAA)

In 1933 Congress passed the Agriculture Adjustment Act and the Agriculture Adjustment Administration (AAA) was created. As part of the New Deal legislation, the AAA was passed in response to the fact that American agriculture had still not recovered from the loss of demand for its products in the aftermath of WWI. In his The Corporate Reapers: The Book of Agribusiness (1992) Al Krebs notes that “Between 1930 and 1935, mortgage foreclosures, bankruptcy, or delinquent tax sales of farms took as many as one sixth of all U.S. farms…” Farmers were suffering from low prices, overproduction, and little credit availability or protection. The New Deal policies were enacted to stabilize production, offer better commodity prices to farmers, and protect family farmers and their communities.

Major Contributions of the AAA: Basically, with the establishment of the AAA the federal government began to play a major role in production agriculture to protect farmers and American agricultural in general. Ultimately more was added to the original legislation. The following three major and important contributions of the New Deal AAA legislation still resonate today: (1) non-recourse loans in which a floor was set for the price of commodities to ensure farmers received a fair price – rather like a minimum wage system; (2) the creation of the Commodity Credit Corporation (CCC) stocks that were related to the non-recourse loans in which commodity crops would be stored in the event of over production and for the protection of farmers, grain buyers and consumers in times of shortage; and (3) acreage set-asides determined by the Secretary of Agriculture to prevent overproduction.

Non-recourse Loan and a Fair Price to Farmers: The non-recourse loan rate was in essence a price support program and a floor below which commodity prices could not go. This forced corporations to purchase commodities from farmers at a fair price. But if, for example, the price began to go below the loan rate perhaps because of over-production, then the farmers could store their crops with the assistance of the government until the price increased to an acceptable rate.

Commodity Credit Corporation: When the CCC was established by Executive order in 1933, Henry Wallace was Roosevelt’s Secretary of Agriculture. In 2004 lecture in Iowa “Agricultural Policy for the Twenty-First Century and the Legacy of the Wallaces” Agricultural economist Daryl Ray notes that the a government-operated CCC reserve naturally results from forfeited non-recourse loan provisions which is important to protect farmers and consumers in periods of less agricultural productivity. The CCC relates to the “’ever-normal granary’ concept of Henry A. Wallace which was based on the story of Joseph in the Bible – preparing for the seven years of crop shortfall during the seven years of plenty. As early as 1912, Wallace began to suggest in his editorials that in times of surplus production and low prices some farmers must play the part of Joseph by holding back part of their crop, to be sold later when supplies were less plentiful.” The reserve stocks of commodities essentially protect farmers from spikes in prices and production. The reserve stock also protects the public in the event of catastrophic events.

Acreage Set-Asides: The AAA was meant to be an independent family farmer oriented agency. “The rationale for all these New Deal farm programs was that past government policy had contributed to over expansion of agriculture, it was the responsibility of government to limit farm output and thereby achieve legitimate policy objectives of a fair price and equality for agriculture, placing it in parity with other sectors of the economy” (Krebs 1992).

The AAA called for acreage set-aside to better manage agriculture production. The policy helped to prevent over-production and ensure a better price for products produced by family farmers. Additionally, the acreage set-sides have benefited soil regeneration and are therefore environmentally beneficial.

Black Cotton Farmers and the AAA

It is important to note that the AAA farm programs were passed during the repressive Jim Crow era in which Black farmers in the South were rarely, if ever, receiving services from the USDA or from the AAA farm programs. In fact, with acreage being taken out of production many Black cotton workers lost income or their jobs altogether. Additionally, new technology limited the need for manual labor in many parts of the South.  Ultimately, the increase in cotton prices as a result of AAA policies also increased the value of land making it more difficult for all small farmers to purchase land and especially difficult for blacks to retain their land.

Abuse of the AAA program was rampant in the Mississippi Delta and elsewhere in the South where powerful cotton planters made sure the allotment payments were filtered through them, rather than directly to their tenant farmers or sharecroppers. The planters in turn made sure that as little as possible went to the tenants or sharecroppers.  James Cobb in his book The Most Southern Place on Earth: The Mississippi Delta and the Roots of Regional Identity (1992) has much to say about this issue. For example, Cobb writes that in Mississippi, “Fewer than half of Bolivar’s County’s farmers received any cash at all from the 1933 AAA cotton plow-up, and many whose names actually appeared on the AAA checks were unable to cash them because county agents delivered them directly to merchants or landlords, who simply applied them to the tenant’s debts.”  Many USDA officials knew of this abuse, yet there was virtually no accountability – it was acknowledged with a wink from those on the AAA county committees and elsewhere in the government.

Obviously, the AAA legislation was not perfect. There needed to be more accountability and equitable policies to empower Black farmers as well as farm workers. In his 1935 article on “Black Cotton Farmers and the AAA,” Howard University professor E.E. Lewis notes some needed adjustments:

If American agriculture were carried on entirely by small independent farmers, owning their land or renting on some equitable basis, and performing most of the labor, then a program such as we have would be truly "democratic." For if the farmer, or rather the same family, receives the entire farm income we should have no reason to worry about the division of benefits as between profits and wages. No doubt one can explain much of the inconsistencies between the apparently sincere expressions of "good will" emanating so frequently from members of the Agricultural Adjustment Administration and the actual concentration of benefits by the fact that Mr. Wallace and his aides have in mind just this type of farm organization. But, the program as formulated at present is truly democratic only if and where agriculture is so organized….

What happens when a program designed merely to increase the total income of each individual producing unit is applied to a section where the control over these producing units is concentrated in a relatively few hands? (This is) just what is happening in the South today…. If the government were really bent on a democratic type of rehabilitation for all cotton producers, it would be compelled by one means or another to put its power behind the Southern sharecropper to force a more favorable division of benefits.

The Importance of a Diverse Economy in Rural Communities

Just out of the depression, the late 1930’s and early 1940’s were a time when many in the US, like Professor Lee above, were looking at the impact of economic systems on communities. Lee essentially asks how communities can benefit and democracy can flourish when government programs benefit but a few wealthy individuals. It was precisely this problem that some in government wanted to explore. They wanted to consider the concentration of capital, along with extensive corporate land ownership, and its impact on the quality of life in rural communities.

In the 1940’s the Bureau of Agriculture Economics (BAE) within the USDA wanted to explore whether the 160-acre limitation should be applied to the growing California agricultural production sector. The young social anthropologist Walter Goldschmidt was given the contract to conduct the California research.  In 1993, a half a century after the study, Goldschmidt would write in his “What If???” article:

“I initiated a study comparing the two towns of Arvin and Dinuba, one representing those communities dominated by large-scale enterprises and the other representing the towns where small family-sized operations were the rule. The study showed unequivocally that the town surrounded by the small farms was far superior by every measure that I could devise.”

In a June 1, 2000 “The Agribusiness Examiner” issue agriculture scholar Al Krebs notes the following regarding Goldschmidt’s research:

What the Arvin-Dinuba study revealed has become near legend in the argument for perpetuating the "family farm system" of agriculture throughout rural America. Dinuba was found far superior to Arvin as the quality of life in each community was directly related to the inequities in landholdings and directly reflected in the difference in the community's economic, political and social stability.
‘Large scale farm operations was immediately seen to take an important part in the creation of the conditions found in Arvin,’ Goldschmidt reported. ‘Its direct causative effect is to create a community made up of a few persons of high economic position, and a mass of individuals whose economic status and whose security and stability are low, and who are economically dependent directly on the few. In the framework of American culture, more particularly that of industrialized farming, this creates immediately a situation where community participation and leadership, economic well-being, and business activities are relatively impoverished.’
The small-farm community of Dinuba was supporting 62 separate businesses with a volume of trade of $4.3 million, while the large-farm community of Arvin had 35 established business establishments; expenditures for household supplies and building equipment were over three times greater in the small-farm community; Dinuba had a larger dollar-volume of agricultural production; over one-half of the breadwinners in the small-farm community were independently employed, while in the large-farm community less than one-fifth were so employed: public services in the small-farm community were far better; the small farm community had two newspapers while the large-farm community had one, and the small-farm community had twice the number of organizations for civic improvement and recreation. As applied to a small-farm community the 160 acreage limitation principle was also found not only to be justified, but one that should be encouraged and supported.

The USDA refused to publish Goldschmidt’s findings at the behest of the American Farm Bureau Federation, which is generally considered the voice of corporate agribusiness. Finally, in 1946, two years after it’s completion, two Congressmen associated with the Small Business Administration were able to publish the findings, but the USDA refused to have its name associated with the study and the Congressional Appropriations Committee ensured the demise of the BAE by ending its funding. It was clear that Congress no longer wanted quality of life studies conducted in rural America and corporate America was also, obviously, not pleased with these studies.

Goldschmidt said that if America chooses develop industrial agriculture with huge corporate farms, then it needs to adjust accordingly. Policies need to be developed for this agricultural industrial sector. The farm workers need to be protected through unions, health care benefits and all that accrues in collectively bargaining and workers rights generally. It can be added here that this would apply to the farmers themselves who would need to get paid a fair price for their products like any other worker in America and receive protections such as health benefits and other worker protections. None of these issues has ever been adequately addressed through U.S. agriculture policies as the trend continues toward corporate agriculture.

Developing Corporate Agribusiness Farm Policies Rather Than Supporting Family Farmers

Since the 1933 AAA legislation was passed and implemented there have been efforts to undermine the program and to deregulate government programs that benefit family farmers. However, Truman’s Secretary of Agriculture Charles F. Brannan attempted to make the 1930’s New Deal program more workable.  “Brannan argued that ‘price supports are the farmer's equivalent of the laboring man's minimum wage, social security, and collective bargaining arrangements’ and by using such a formula in raising price supports for meat and dairy products in relation to other commodities, farmers would be encouraged to shift production from so-called ‘surplus crops’ --- like wheat and cotton  --- to feed grains, grasses and meat animals” (Krebs: June 1, 2000 “The Agribusiness Examiner”). Brannan’s plan was defeated, according to Krebs, because the Republican opposition did not want to see a closer relationship between the labor and farming sectors that would likely result from the legislation.

Ultimately, rather than Congress addressing and attempting to correct some of the inequities in the New Deal programs, subsequent Farm Bills have been geared toward assisting corporate agriculture to increase it’s wealth and control over global production agriculture.

Richard Nixon’s Secretary of Agriculture in the 1970’s, Earl Butz, is considered the primary architect that led U.S. agriculture policies down the slippery slope to overproduction and export-oriented programs that benefit corporate agribusiness. He put the nail in the coffin of programs that benefited family farmers (Krebs: 1992). The trend continues. In the 1996 Farm Bill, known as the “Freedom to Farm” Bill, we witnessed the further demise of many of the programs geared toward supporting family farmers. In the past few bills Congress again encouraged an export oriented policy of U.S. commodities. One of the significant changes in the bills during and since Earl Butz has been the end of the acreage set-aside program that resulted in placing an additional 10 to 15 million acres into production. This is generally what critics called “fence-row-to-fence-row” agriculture. It was thought that, with increased production and the export of commodities, farmers would make additional profits.

With an “export oriented” philosophy Congress decided to lower the price (or loan rate) for commodities, assuming that U.S. commodities could then better compete on the international market. Farmers, they said, could make up the income loss through exports. This never happened. Family farmers never did gain from exports and commodity prices have remained low. (Today the US exports approximately 25% of its commodities and 75% of the US domestic market remains for purchase of commodities by agribusiness at exceptionally low rates.)

Subsidies rather than price supports: The other major change in the bill was subsidies or direct payments to farmers. Subsidies were offered to farmers to make up the difference in the loss of income. But subsidies were not tied to the “actual” price as the loan rate set by Congress was below the cost of production. Corporate agribusiness has since been purchasing commodities at exceptionally low prices on the back of American taxpayers. And while all the subsidy payments can barely cover the cost of production and perhaps a little for living expenses, cotton family farmers on the whole do not benefit from subsidies in terms of wealth creation. As Missouri farmer Keith Mudd says, “in practically no instance is anything left over that would be considered a return on investment (land and equity)” (Krebs: 2002 “The Agribusiness Examiner”). Blacks tend to suffer even more due to the fact that their established base is far less than white farmers and most contend this is the result of discrimination.

The question is, who benefits from this program of low commodity prices and “fence-row-to-fence-row” agriculture? As University of Tennessee agricultural economist Daryll Ray says in his “Weekly Agriculture Policy Columns”:

Current commodity policy is not a farm policy, it is an agribusiness policy. Why? Because other farm policy approaches could generate current or higher income levels without spending tens of billions of dollars annually in direct payments. But to allow agribusiness to a) maximize sales of fertilizer, seed, and chemicals and to b) maximize volumes processed and transported requires fence-row-to-fence-row production; which means unnecessarily depressed prices; which means unnecessarily low market incomes; which means large government payments, but it is agribusiness that gets the "increased" income, not farmers.

In summary, corporate agriculture has made billions of dollars selling its seeds and in-puts to farmers who are producing on 10 to 15 million more acres in America and those corporations are able to purchase commodities from farmers at exceptionally low prices for domestic and foreign markets. The US is overproducing, thus driving down prices, farmers are not getting a fair price, and American taxpayers are subsidizing huge corporations. All of this for a failed export policy that has led to environmental degradation due to intense agriculture and chemical use, and threatened rural communities in the U.S. and elsewhere, especially in the developing world and the Black Belt south; areas with the most need for a diverse family farm based economy.

(Part Two of the Cotton Study is "Findings and Analysis of Interviews with Black Cotton Farmers")

* Jerry Pennick is the Director of the Federation/LAF's Land Assistance Fund
**Heather Gray is the Director of Communications of the Federation/LAF

Federation of Southern Cooperatives/Land Assistance Fund
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