The construction of canals to transport agricultural products was an integral part of farm policy in the early 19th century. Transportation systems later expanded to included railroads and highways.

[imgcontainer][img:erieboat.jpg][source]America Illustrated[/source]The construction of canals to transport agricultural products was an integral part of farm policy in the early 19th century. Transportation systems later expanded to included railroads and highways.[/imgcontainer]

With the farm-bill “fail” in the news, it’s easy to think the sum total of U.S. agriculture policy deals with crop insurance and food stamps. Ag researchers Daryll E. Ray and Harwood D. Schaffer from the University of Tennessee’s Agricultural Policy Analysis Center show us the bigger picture in their most recent installment of their weekly column, Policy Pennings.

The piece (available here in its entirety) reminds us of the central role ag policy has played in U.S. development from the earliest days of the Republic. It’s hard to imagine the contemporary United States without the farm policies that encouraged westward expansion, national transportation systems and public education.

First, there was the most essential ingredient in agriculture: land.

Ray and Schaffer write:

Much of the early developmental policies consisted of various ways to encourage settlers to clear the land, build houses and fences and prepare the land for agricultural production. Some of the land was sold to individuals and speculators; other land was given to men as compensation for service in the American Revolution. Parcels of land in Connecticut’s Western Reserve in northwest Ohio were given to people whose towns were destroyed during the American Revolution.

The most important piece of legislation for the future settlement pattern of the U.S. was the Northwest Ordinance of 1787, which brought within its scope two earlier land ordinances and was responsible for surveying the land into six-square-mile townships, each consisting of 36 sections of land that were one mile square or 640 acres each. The townships were then aggregated into counties.

The authors note that this land was not unoccupied and frequently resulted in the forced displacement of American Indians.

Opening land for [mostly European] settlement and agricultural development increased the supply of the most fundamental input in agricultural production: land. Year by year the settlement of new land increased the agricultural production of the U.S.

But getting those new ag products to market back East was tough. River travel was the only feasible method, and that left out much of the new land coming into production. So government got involved again, Ray and Schaffer write:

To solve the growing need for access to more distant markets, it was first proposed in 1807 to build a canal from Albany on the Hudson River to Buffalo on Lake Erie. By 1825 the canal had been constructed and was open to barge traffic, greatly reducing the cost of an important input for western farmers: transportation. Later developments (1825-1845) would include the Miami and Erie Canal linking Toledo, Ohio, on Lake Erie (providing access to all areas adjacent to any of the Great Lakes) to Cincinnati, Ohio, on the Ohio River with direct access to the Mississippi and the port of New Orleans. This canal was constructed by the state of Ohio at a cost of more than $8 million.

The canals were superseded by the railroads, many of which were financed by the federal government with grants of land. To build the Northern Pacific Railroad and connect the Great Lakes with Puget Sound on the Pacific Ocean, the owners were given every other section of land along the right of way to finance the railroad. The federal government kept the remaining sections to provide to settlers as homesteads. Thus the building of the Western railroads accomplished two developmental tasks; it increased the amount of land in production, increasing the supply of an input, and it decreased the cost of another input, transportation.

This task of reducing the cost of transportation was continued with the development of the U.S. highway system in 1925, state farm/ranch to market roads and the Interstate Highway System in 1956 under President Dwight Eisenhower.

Finally, the federal government also wanted to improve the quality of U.S. farming. That meant improving farming techniques and expertise, which meant public education. The Northwest Ordinance of 1787 promoted this by setting aside land for public schools. And the big push for agricultural education came with Land Grant Colleges of the Morrill Act in 1862 and the Agricultural Experiment Stations with the passage of the Hatch Act in 1887.

Together these institutions, along with the Cooperative Extension Service, conducted research developing public seed varieties, improving farm equipment like cream separators and identifying tillage practices that improved the inputs that farmers used in their operations.

… With the establishment of the Land Grant Colleges and the Cooperative Extension Service, the level of education available to farmers and their children was increased, improving the quality of an essential input in any farm operation—human knowledge and labor.

For good or bad, imagine a United States confined to land occupied by its original 13 Colonies. Or lacking federal transportation systems of rails, rivers and highways. Or without Land Grant Universities and other public education institutions.

It’s enough to make you wonder what the nation will look like 100 years from now if Congress continues to disagree about the most basic questions of federal policy.


EDITOR’S NOTE: Daryll E. Ray holds the Blasingame Chair of Excellence in Agricultural Policy, Institute of Agriculture, University of Tennessee, and is the Director of UT’s Agricultural Policy Analysis Center (APAC). Harwood D. Schaffer is a Research Assistant Professor at APAC. Their weekly columns are available here.

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