During World War I farmers benefited from high prices, which persisted for a short period after the war because of a shortage of food supplies. European agriculture recovered from wartime losses in land fertility, livestock, and capital and by the early 1920s was fully productive. Elsewhere, production had expanded greatly during the war and afterward continued to rise. After the war prices declined, and, as farmers sought to compensate by expanding their output, the fall in prices was aggravated.
Agricultural tariffs, generally suspended during the war, were gradually reintroduced. The Great Depression of the 1930s brought a new wave of protectionism, leading some industrial nations to look toward self-sufficiency in food supplies. In countries such as France, Germany, and Italy, where agriculture was already protected, the tariff structure was reinforced by new and more drastic measures, while countries such as Britain, Denmark, The Netherlands, and Belgium abandoned free trade and began to support their farmers in a variety of ways. The United States first raised tariffs and then undertook to maintain the prices of farm products. Major exporters of farm products, such as Argentina, Brazil, Australia, Canada, and New Zealand, tried a number of plans to maintain prices.
One of the most effective of the nontariff measures was the "milling ratio" for wheat or, less often, rye, under which millers were legally obliged to use a certain minimum percentage of domestically produced grain in their grist. This device was first used in Norway in 1927. In 1929 both France and Germany adopted it, and, from 1930 on, it became customary in Europe and in some non-European nations as well. Milling ratios continued in many nations up to World War II and have been reintroduced in several since that time.
Import quotas, although used earlier in a limited way, became a major protective device during the 1930s. Starting with France, by 1939 they had been adopted on a large scale, mainly for agricultural products, by most European and several non-European nations.
The most radical measures were undertaken in Germany under Hitler, where the Nazi government, seeking self-sufficiency in food, fixed farm prices at relatively high levels and maintained complete control over imports.
In the fall of 1931, Great Britain abandoned the free-trade policies followed for nearly a century and turned to protectionism. The new policies emphasized industrial rather than agricultural products. A commodity-by-commodity approach for agriculture through subsidies, marketing schemes, and import restrictions provided help for some farmers. Competition from the Dominions, however, was strong.
In 1932 Great Britain negotiated the Ottawa Agreements with the Dominions, which included comparatively free access of Dominion agricultural products to the British market. The agreement helped considerably to alleviate the difficulties the Dominions faced during the Depression. In addition, export subsidies were adopted by several of the Dominions: for wheat by Canada and Australia; for dairy products by New Zealand; and for several products by South Africa.
In the United States the Agricultural Marketing Act of 1929 established the Federal Farm Board to promote orderly marketing through cooperatives. The Tariff Act of 1930 imposed virtually exclusive tariffs on many products, including those of the farm. These acts, comparatively ineffective in meeting the pressures of the Great Depression, were followed by the Agricultural Adjustment Act of 1933 and subsequent legislation that included restoring the balance between production and consumption, restoration of farm purchasing power, and the attainment of parity, the ratio between prices farmers paid and those they received during the period 1910-14.
Some of the exporting nations adopted extreme measures during the Depression in an attempt to maintain prices for their commodities. Brazil burned surplus coffee stocks, destroying more than 8,000,000,000 pounds of coffee over 10 years beginning in 1931. An Inter-American Coffee Agreement, signed in 1940, assigned export quotas to producer nations for shipment to the United States and other consuming nations and was effective during World War II. Other commodity agreements have met with very limited success.
During World War II, agricultural production declined in most of the European countries, shipping became difficult, and trade channels shifted.
In contrast, agriculture in the United States, undisturbed by military action and with assurance of full demand and relatively high prices, increased productivity. The United States, Great Britain, and Canada cooperated in a combined food board to allocate available supplies. The United Nations Relief and Rehabilitation Administration (UNRRA) was organized in 1943 to administer postwar relief, while the Food and Agriculture Organization (FAO) of the United Nations was established in 1945 to provide education and technical assistance for agricultural development throughout the world.
By the end of World War II, food production in most of the countries of Europe had fallen below the prewar level. Through assistance given primarily by the United States and the United Nations, recovery was rapid. Western Europe was greatly helped from 1948 on by U.S. aid under the Marshall Plan, administered through the Organisation for European Economic Co-operation (OEEC). In September 1961, this organization was replaced by the Organisation for Economic Co-operation and Development (OECD), with Canada and the United States, and later other non-European developed nations, as full members. Its agricultural programs have dealt, for example, with economic policies, standardization, manpower, and development.
From the 1950s on, agricultural production increased markedly in western Europe, in the United States, and in most of the nations that ordinarily export large quantities of agricultural products. The Soviet Union, which in the 1930s had organized agricultural production into state-run collective farms, has increased its output substantially, in part by opening new lands. It has been hampered, however, by periodic crop failures that have made it necessary to import large quantities of grain. Agricultural production in China, though adversely affected by the social and economic upheavals caused by the policies of the Great Leap Forward (1958-60) and the chaotic atmosphere of the Cultural Revolution (1966-76), has steadily improved, especially since the Cultural Revolution.
Most of the Western nations offer some type of protection to their farmers--price supports, import quotas, and plans for handling surplus production. Notable examples are the agricultural programs run by the U.S. Department of Agriculture and by the European Communities. On the other hand, many of the developing nations have had food deficits, with little in the way of exportable goods to pay for food imports. Several national and international organizations have been established in an effort to deal with the problems of the developing nations, and direct assistance has also been provided by the governments of developed countries.
Individual farmers in the nations where commercial agriculture is important have been forced to make changes to meet the problems of world surpluses and low world prices for farm products. Thus, in many nations, farmers have increased productivity through adopting advanced technology. This has permitted each worker, generally speaking, to farm larger areas and has thus reduced the number of farmers. In some nations, commercialization has led to farming by large-scale corporations. Thus, the world tendency is toward larger farms. The farm operated by a single family, however, is still the dominant unit of production in most of the world. (W.D.R. /K.Me.)
