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Purdue Professor: Farmers’ Aid Package has Parallels to Great Depression

Photo courtesy: Purdue University

A Purdue University professor says there are a few parallels between the USDA’s relief package to farmers and a stimulus package from the 1930s.

The 2020 Coronavirus Food Assistance Program (CFAP) will provide $16 million in direct payments to farm families. Under CFAP, USDA is authorizing $3 billion to purchase fresh produce, dairy and meat as farmers have been forced to destroy milk, eggs and crops because of supply chain disruptions in the food supply chain caused by COVID-19.

Professor Douglas Hurt of the Purdue University College of Liberal Arts has written several books on the Dust Bowl and Great Depression. He says that the recent stimulus package for farmers is similar to the Agricultural Adjustment Act, passed in 1933.

“The parallels are very clear,” he said. “In both cases, particularly in the 1930s, the federal government needed to get money to farm families quickly. The agricultural prices collapsed in 1932—there’s a problem of overproduction and farmers simply needed operating and living money.”

The Agricultural Adjustment Act sent direct payments to farm families and set apart money to purchase food from producers.

“The Agricultural Adjustment Act tried to do two things: reduce surplus production of seven major commodities hoping that eventually prices would go up; and to pay farmers to make production cutbacks,” said Hurt.