The 1980s Farm Crisis

How turmoil in the agricultural industry changed politics in the Midwest

From 1979-1988, much of the Midwest was overcome by the worst economic crisis since the Great Depression fifty years before. Thousands of farmers lost their property and their livelihoods as they could no longer afford to run their farms. This catastrophe had a profound effect on politics during the 1980s, and continued to influence election results for decades to come. Agricultural states like Iowa swung dramatically towards the Democratic party. In this article, I’ll explore the causes of the farm crisis and examine how it impacted American politics. 

The roots of the economic crisis began in the early 1970s. A poor harvest in the USSR led the Soviet government to negotiate a deal with the United States that allowed them to buy shipments of American grain. This led to a substantial increase in demand for American agricultural products, and as a result the value of farmland rose dramatically. These ideal conditions were assumed to be the new normal, so many farmers borrowed a lot to help with their production, and lenders were eager to entice them to do business. This began to change in 1979, however, when the Federal Reserve under Paul Volcker enacted new measures to combat inflation which greatly increased interest rates on borrowing. This caused it to be much more difficult for farmers to secure new loans for their farms, and many were unable to pay off their current ones. 

Then in 1980, President Jimmy Carter imposed an embargo on shipments of grain to the Soviet Union in response to its invasion of Afghanistan. This led to decreased demand for agricultural products in the Midwest, making it harder for farmers to sell their crops and pay their loans. Periods of severe drought in 1985 and 1988 added further problems for farmers, causing them to be unable to grow enough products to earn a living. The 1988 drought in particular was one of the worst periods of drought in American history, with $131 billion dollars in damage being inflicted on the US economy and corn yields being reduced by 44%. This crisis did not affect just farmers, but also hurt the manufacturing industry in the region as companies like John Deere and Caterpillar that produced farm equipment faced a reduced demand for their goods, and as a result laid off 20,000 workers in the Quad Cities in eastern Iowa and northwestern Illinois during the 1980s. The period of crisis eventually ended in the 1990s, as interest rates became low again and the creation of the North American Free Trade Agreement (NAFTA) increased the amount of agricultural exports. 

Map of the extent of the 1988 drought in the US

While many farmers held the government responsible for federal policies which they believed were contributing to the crisis, Ronald Reagan held to his free-market positions that contributed to the perception that he was unsympathetic to their plight. As a result of the poor condition of the agricultural industry under the Reagan administration, much of the Midwest and West swung to the Democratic party. The Democrats made substantial gains in Iowa in particular, which was the epicenter of the farm crisis. In 1984, Walter Mondale improved upon Jimmy Carter’s performance in the Hawkeye State, causing it to be 10 points more Democratic than the national vote. This map of the county trend from 1980 to 1984 relative to the change in the national vote by mapmaker @mill226 on Twitter shows that much of the farm belt like North and South Dakota also trended strongly towards Mondale in response to the farm crisis, as well as northwest Illinois.

In 1988, Michael Dukakis made further gains, comfortably winning Iowa by 10 points despite being crushed by George H. W. Bush in the national vote, meaning that Iowa was 18 points more Democratic than the national vote. While Iowa used to be a traditionally Republican state, the farm crisis caused a political realignment that made it a blue-leaning swing state in presidential elections. The Democrats also made lasting gains in Wisconsin, particularly in the southwestern portion known as the “driftless area”, which enabled the party to be competitive in the state for decades afterwards. The Farm Crisis caused Dukakis to do well in the Western states, as Montana and South Dakota were more Democratic than the national vote. This trend map of 1984 to 1988 by Mill shows the extent of how the economic calamity caused much of the West to trend strongly towards the Democrats even further.

Many of these gains did not last for Democrats after the economic problems had subsided, as a large portion of voters in the West and Midwest voted for Ross Perot in 1992 and then returned to the Republican party in 1996 and 2000. However, the fact that states like Iowa and Wisconsin remained blue-leaning up until 2016 is a testament to the far-reaching effects of the farm crisis on America’s politics. The drifless area in Iowa, Wisconsin, and Illinois continued to send Democrats to Congress like Cheri Bustos and Ron Kind. A growing urban-rural split and political realignment along educational lines have caused this region to lurch to the right, putting a close on the legacy of this forgotten event in history.

County results of the 2012 presidential election in the Driftless Area

Sources:

“The Farm Crisis of the 1980s.” Iowa Pathways, Iowa PBS, 12 Feb. 2018, https://www.iowapbs.org/iowapathways/mypath/farm-crisis-1980s#:~:text=During%20the%201980s%2C%20American%20farmers%20confronted%20an%20economic,on%20rural%20main%20streets%20closed%E2%80%94many%20to%20never%20reopen.

Skilling, Tom. “The Drought of 1988 Was the Worst since the Dust Bowl.” WGN, WGN-TV, 21 July 2018, https://wgntv.com/news/the-drought-of-1988-was-the-worst-since-the-dust-bowl/.

The Farm Crisis, directed by Laurel Burgmaier (Johnston, Iowa: Iowa PBS, 2013), DVD.

National Institute of Food and Agriculture, United States Department of Agriculture. “Growing A Nation: The Story of American Agriculture” agclassroom.org. https://www.agclassroom.org/gan/timeline/1940.htm