The Agricultural Crisis of the 1920s

Hello, again History Lovers,

As the cost of living rose in the 1920s it was public opinion that the increase was the fault of the farmers. Today’s post comes from an article published in The Farmer’s Wife in which The U.S. Secretary of Agriculture speaks to the National League of Women Voters in the spring of 1922 debunking the logic of this perception and pointing out the plight of U.S. farmers. The paragraph below is a brief outline of the circumstances that led to the Agricultural Crisis of the 1920s:

WWI U.S. Department of Agriculture Propaganda Poster 1918

As WWI raged, war-torn Europe was desperate for commodities from the United State to feed its people. This demand was a boon for American farmers. To meet Europe’s needs the U.S. government encouraged farmers to plow more land and grow more food. About the time the U.S. actively joined the war in Europe, Congress had passed the Federal Farm Loan Act of 1916 by which farmers could acquire long-term farm expansion loans. And borrow they did! Farmers borrowed to buy land, tractors, and other labor-saving equipment, riding the wave of prosperity through the war years expecting that the prices and demand would stay steady. However, as Europe recovered, the need for U.S. exports diminished, surpluses grew and prices plummeted, beginning what would come to be referred to as the Agricultural Crisis of the 1920s.

The Cost of Living For Farmers–1920s

Farming with a gas-powered tractor. Pennsylvania 1920

The fact is becoming generally recognized that the cost of living, so far as food products are concerned, is due to the expense of distribution and the cost of service; the farmer is absolved from blame as a profiteer.

–The Editors, Farmer’s Wife Magazine

The Secretary of Agriculture, Henry C. Wallace, in an address before the National League of Women Voters in Baltimore, presented some interesting facts from the farmer’s side of the cost-of-living problem. According to the most careful estimates, for such necessities as food, shelter, clothing, fuel, and light, the family budget of the average wage earner is distributed as follows:

  • 43.1 percent for food
  • 13.2 percent for clothing
  • 17.7 percent for shelter
  • 5.6 percent for fuel and light
  • 20.6 percent for sundries

Comparing the cost of these commodities in March 1922 with July 1914, it was found that food, the largest item in the family budget cost 42 percent more than in 1914, shelter about 65 percent more, clothing 54 percent, fuel and light 77 percent, sundries 74 percent. The only conclusion from these statistics is that the farmer suffers from but is not the cause of the cost of living. Transportation, wages, distribution, and service—these are the sore spots that need treatment.

In the words of the Secretary of Agriculture, “city consumers have gotten into the habit of insisting that it is the farmer’s sacred duty to produce. The corollary to this is that it is the distributors and consumer’s sacred duty to distribute efficiently and use most intelligently what the farm produces.” The farmer is looking at the cost-of-living problem just now from a position where he is receiving less than pre-war prices for the commodities, he has to sell but is paying 50 to 75 percent more than pre-war prices for the things he has to buy. The cost of living should come down but there is no possibility of starting with the farmer. Cheapening the farm-selling price of food products harms the farmer and helps no one except the middleman, the organized workman, and the profiteer who simply pockets the toll taken from the farmer.


The above article was originally published in The Farmer’s Wife–A Magazine For Farm Women 1922, Page 3; Webb Publishing Company, St. Paul, Minnesota. Articles may be edited for length and clarity.