The crops we grew last summer weren't enough to pay the loans
Couldn't buy the seed to plant this spring and the Farmers Bank foreclosed
Called my old friend Schepman to auction off the land
He said John it's just my job and I hope you understand
John Cougar Mellencamp
"Rain on the Scarecrow" (1985)
On September 22, 1985 artists including Bob Dylan, Tom Petty, Billy Joel, Bon Jovi, Van Halen and Foreigner performed at the first Farm Aid concert in Champaign, Illinois. The show was a success, with 80,000 people packing an outdoors stadium in spite of inclement weather. The Nashville Network televised the event, in which 112 acts performed. As conceived by founders Willie Nelson, Neil Young and John Mellencamp, Farm Aid's purpose was to heighten public awareness about the plight of the American farmer. All proceeds were channeled through grants to support farm organizations and provide food and legal assistance to struggling farm families.
In the 1980s the American farmer was confronted by a crisis more severe than any since the Great Depression. Many who depended on agriculture for their livelihood faced financial ruin. Some broke under the strain of economic disaster. In Hills, Iowa a farmer killed his banker, his neighbor, his wife, and then himself. Near Ruthton, Minnesota a farmer and his son murdered two bank officials. In South Dakota's Union County, a Farmers Home Administration (FmHA) official who couldn't hold up under the pressure of his job killed his wife, daughter, son and family dog before committing suicide.
Lowered trade barriers coupled with record Soviet purchases of American grain resulted in a sharp increase in agricultural exports during the 1970s. Farm incomes and commodity prices soared, as did land values. Conveniently low interest rates persuaded many farmers to go deeply into debt on the assumption that commodity prices and land values would continue to rise. But the agricultural "boom" couldn't last forever. By the early 1980s tight money and high interest rates had burst the speculative bubble. Farmland value declined 60 percent in some areas between 1981 and 1985. Many farm operators found it impossible to retire their debts as fast as their assets declined. Record harvests led to overproduction, which forced prices down. Federal price supports kept American farm exports so costly that the U.S. lost a significant share of the international market. (Agricultural exports declined 20 percent between 1981 and 1983.) The strong dollar and Jimmy Carter's grain embargo to punish the Soviet Union for its invasion of Afghanistan didn't help matters. As he watched profits drop 36 percent between 1980 and 1986, the farmer who had aggressively indebted himself in the Seventies realized he was in grave financial jeopardy. Farm foreclosures rose dramatically despite a two-year moratorium on such action by the FmHA. The crisis had a ripple effect, negatively impacting farm-related industry and rural community businesses.
By 1980 American agriculture was so efficient that a smaller number of farmers than ever before could feed the nation with only three-fifths of total production, leaving the remainder available to export or bound for federal storehouses. The Reagan administration tried to increase agricultural exports, but the 1981-82 recession hampered its efforts. Sixty percent of farm income depended on the domestic market anyway, and since the recession forced consumers to reduce spending on farm products, the farmer's plight became even more severe. (Meanwhile, consumer food prices rose 36 percent between 1980 and 1988). Generally, the administration's approach was to let the marketplace rule; there were just too many farmers producing too much food, and a lot of them had speculated too rashly in the Seventies. David Stockman, Director of the Office of Management and Budget, argued that American taxpayers should not be forced to finance that bad debt. Such comments led Senator Tom Harkin (D-Iowa) to speculate that if Stockman dared step foot in Iowa he might be lynched.
A widespread grassroots protest arose against the government's laissez-faire approach to the farm problem. Such groups as the American Agriculture Movement, Iowa's Farm Unity Coalition, Missouri Groundswell, Prairie Fire, and Women Involved in Farm Economies picketed federal offices, disrupted farm auctions, set up crisis hotlines, held rallies, and lobbied Congress for a moratorium on foreclosures, legislation to limit corporate ownership of farm land, deferrals on loan payments, and increased marketing controls and subsidies. The administration opposed farm subsidies in principle; Stockman argued that fifty years of subsidizing agriculture had turned farming into "organized larceny." Journalist Susan DeMarco wrote that the "most devastating force at work in the farm belt is America's disastrous agriculture policy," which she described as a "dizzying array of ad hoc . . . programs devised over decades to serve special interests." The Reagan administration tried at first to cut farm subsidies, but the deepening crisis forced it to reverse course. In 1983 the federal government spent a record $51 billion in direct and indirect subsidies. But the American taxpayer didn't seem to mind. A 1986 New York Times-CBS poll found that a majority were willing to pay more taxes to help farmers keep their land. The farm crisis, said commentator Hugh Sidey, had become a "cultural crisis unique in our history" because the public had a sentimental attachment to an idealized image of the family farm. In fact, much of the federal handouts went to high-income farm operators, not the small farmer. In one year, 67 percent of federal payments went to 314,000 farms each of which had sales in excess of $100,000 a year.
That didn't stop celebrities from rallying to the cause. Hollywood addressed the problem in films likeThe River and Country; stars Sissy Spacek and Jessica Lange testified before Congress on the farmer's behalf. And recurring Farm Aid concerts raised $13 million in grant money with the help of artists like Bryan Adams, Garth Brooks, Don Henley, The Grateful Dead, Elton John and the Neville Brothers. The farm crisis had abated by the end of the Eighties, however, and public interest waned.