History of the Farm Service Agency

Origins of the USDA Farm Service Agency

The Farm Service Agency’s origins lie in the Great Depression and the Dust Bowl of the 1930s. The stock market crash of 1929, followed by three years of ineffective federal response to the rising unemployment and poverty rates devastating communities across the country, led to the landslide election of Franklin D. Roosevelt, who promised direct federal economic intervention. While the effects of the Depression were devastating to farmers (whose total income fell from $12 billion in 1929 to $5 billion in 1932), the Dust Bowl (caused by a massive drought that exacerbated ecologically damaging farm practices) sent farm profits into a tail spin.

Farm Security Administration

In an attempt to stabilize the farm economy, the federal government created the Resettlement Administration, an agency whose primary mission was to resettle struggling families into federally planned communities. Fierce resistance and rapidly ballooning costs quickly led to the transfer of RA power and resources to the U.S. Department of Agriculture, which renamed the RA the Farm Security Administration in 1937 and charged the new agency with providing federally backed farm loans through the Standard Rural Rehabilitation Loan Program, which, in addition to providing badly needed credit, offered farmers home management tips and collected and disseminated farm techniques, offering struggling and new farmers supervision and guidance. The administration worked with farmers and banks to protect debtor farmers, often working out payment plans and arbitrating foreclosure proceedings.
The Farm Service Administration played a critical role in protecting vulnerable farmers. From 1937 to 1941 (when the U.S. entered World War Two and when the worst effects of the Great Depression began to lessen) families who participated in FSA programs saw their incomes rise by more than sixty percent and their standard of living significantly improve. Federal farm programs saved countless farmers from bankruptcy and financial ruin, preserving a strong foundation for the future growth of the U.S. farm sector.
In addition to loan programs, in 1933 Congress passed the Agricultural Adjustment Act (later renewed in 1938) creating local organizations entrusted to help regulate and manage farm prices and land values, creating a more stable agricultural system for farmers who were suffering from severe price fluctuations.

Reorganization of the FSA

After the end of World War 2, Congress decided to reorganize the FSA, eliminating unnecessary resettlement programs and centralizing some of the financial powers of the USDA. The Farmers Home Administration Act of 1946 consolidated several credit programs that previously had been under the administration of FSA, the Emergency Crop and Feed Loan Program, and the Farm Credit Administration, while also expanding the FSA’s power to insure loans made by banks, credit organizations, federal agencies, and private individuals. In 1954 and 1961, another USDA reorganization formalized the lending authority and price stabilization mission of federal farm agencies while also giving them power to encourage and promote conservation (an attempt to prevent another ecological disaster like the Dust Bowl).
In 1994, the various USDA loan programs were centralized under the newly christened Farm Service Agency. The FSA, the successor to the host of federal farm programs created since the 30s, currently oversees federal farm programs, federal farm loans, commodity operations, as well as coordinating various state and local operations. In addition to conservation programs, commodity price protections, and managing agricultural safety nets, the FSA places a great deal of importance on farm loans targeting minorities (focusing particularly on people of color and women) and beginning farmers. In the wake of a number of scandals involving accusations of racial and gender discrimination, the FSA and the USDA have been particularly sensitive to the needs to disadvantaged farmers, committing themselves to creating a more diverse farm sector in the United States.
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