Proposal preview

Agriculture and large-scale crises in the industrial world. 1929, a paradigmatic model for agricultural crises in the modern economy

Nowadays the agricultural sector does not appear to have the prominent position that it held in traditional agrarian economies. Production difficulties no longer cause the severe subsistence crises that periodically affected Western societies in the past, although something similar can still be observed in some developing or emerging countries. Does this mean that agriculture plays no part in the recessions that have characterized contemporary history in the developed world? This is still a question of debate if we consider, for instance, the structural role of the agrarian crisis in the Great Depression of the late 19th century. Even if we refer to more recent times, in which primary sector has less impact, the coincidence in 2007-2008 of the sharp rise in agricultural commodity prices with the onset of the current recession raises many questions. It is therefore important to understand to what extent the agricultural sector has been involved in most of the large-scale crises in the modern industrial world and whether it has had a significant or fundamental role in triggering past and present depressions.

Within this vast field of research this session intends to focus mainly, although not exclusively, on the 1929 crisis, which is crucial in the evolution of both 20th century agriculture and modern industrial economies – and for the latter reason is often compared with the present recession (as was recently analysed during the International Conference held in Ancona, Italy on Large-scale Crises: 1929 vs 2008). If the interpretation of the economic depression of the Thirties is currently far from being shared, even the role of the primary sector is no less controversial. In fact, although the dramatic downturn in agricultural prices during the inter-war period was initially considered by the Society of Nations and economists, such as Ohlin or Timoshenko, as one of the main causes of the recession, over the years this school of thought gradually gave way to an emphasis on other financial, monetary and industrial issues as the cause of the crisis. However, some recent neo-Keynesian analyses have once again stressed the negative impact of the slump in agricultural prices on incomes and aggregate demand.

Bearing this in mind, the general aim of the proposed session is to stimulate a debate on the role of the agricultural sector in provoking or aggravating large-scale modern depressions, with specific reference to the Great Crisis of the 1930s and how it is associated with the dynamics of primary sector. This will be achieved by means of a comparative and multi-level international, national or local analysis, with a view to understanding the long-term global and structural transformations involved in extended recessions.

Some suggested topics for contributions:
– market, subsistence and export agriculture during the crisis
– agricultural prices and international deflation trends
– technical and social changes in agriculture during the inter-war period
– employment, underemployment, and agriculture as a “sponge sector” for unemployment
– the impact on, and of, migrations
– the role of gender
– rural incomes and aggregate demand
– the impact of agricultural protection
– recovery policies in the primary sector

Contributions (tentative list)

– G. Béaur (CNR EHESS, Paris) “Agriculture crisis and economic crisis in the long run. From Ancien regime to 1929 and beyond”
– Christopher Boone (Cornell University), Structural Change and Deep Downturns: The U.S. Farm Sector in the Great Depression”
– Jocelyn Pixley (Macquarie University), The role of banks and monetary policy in two agro-industrial exporting countries: Australia and Canada in the 1930s Depression”
– Julio Djenderedjian and Juan Luis Martirén (Universidad de Buenos Aires – Consejo Nacional de Investigaciones Científicas y Técnicas) “From boom to burst: Argentine primary sector, 1900s-1930s”
– A. Tortolero (Universidad Autónoma Metropolitana, C.d.México), The case of México”
– F. Chiapparino, G. Morettini (Università Politecnica delle Marche), “Agriculture, inter-war crisis, and the manifold performances of ‘rural Italies’ in the recession”
– Niccolò Mignemi (École française de Rome) “Agricultural exports and Italian development, between the 1929 crisis and autarchy”
– L. Andreoni (Università Politecnica delle Marche) & L. Herment (CNR EHESS – Erhimor), France vs. Italy in the agriculture crisis of the 1930s
– J. Pan Montojo (Universidad Autonoma, Madrid), “Spanish agriculture and the world depression: agrarian policies, republicanisation and foreign policy (1930-1936)”
– E. Langthaler (J. Kepler Universität Linz), “The Great Depression as Transition of the Global Food Regime
– Alain Chatriot (SciencesPo, Paris), “The problem of the wheat and the political answers to the agricultural crisis in France of the 1930s”

Organizer(s)

  • Gérard Béaur CNRS & EHESS, CRH & GRDI AAA, Paris, France beaur@ehess.fr France
  • Francesco Chiapparino Università Politecnica delle Marche, Ancona, Italy f.chiapparino@univpm.it Italy

Session members

  • Luca Andreoni, Università Politecnica delle Marche, Ancona, Italy
  • Christopher Boone, Cornell University, USA
  • Alain Chatriot, SciencesPo
  • Laurent Herment, CNRS, CRH & GRDI AAA, Paris, France
  • Julio Jenderedjian, Universidad de Buenos Aires, CONICET
  • Ernst Langthaler, University of Linz
  • Juan Luis Martiren, Universidad Buenos Aires/CONICET
  • Niccolò Mignemi, Expostdoc Ecole Française de Rome
  • Gabrielle Morettini, Università Politecnica delle Marche, Ancona, Italy
  • Juan Pan Montojo, Universidad Autónoma de Madrid, Spain
  • Jocelyn Pixley , Macquarie University, Sydney
  • Alejandro Tortolero, Universidad Autónoma Metropolitana

Discussant(s)

  • Price Fishback University of Arizona pfishback@eller.arizona.edu -

Papers

Panel abstract

If the interpretation of the economic depression of the Thirties is currently far from being shared, the role of the primary sector is no less controversial. It is therefore important to understand to what extent the agricultural sector has been involved in most of the large-scale crises in the modern industrial world and whether it has had a significant or fundamental role in triggering past and present depressions. Bearing this in mind, the general aim of the proposed session is to stimulate a debate on the role of the agricultural sector in provoking or aggravating large-scale modern depressions, with specific reference to the Great Crisis of the 1930s and how it is associated with the dynamics of primary sector. This will be achieved by means of a comparative and multi-level international, national or local analysis, with a view to understanding the long-term global and structural transformations involved in extended recessions.

1st half

Agriculture crisis and economic crisis in the long run and with a comparative view (1680-1929, France-Italy, USA, UK.

Gérard Béaur

This paper will focus on the possible links between agricultural crises and economic crises and will look for evidences that would assess the hypothesis that the drop of agricultural price was a basic cause of such general crises through the fall of demand linked precisely to the fall in income suffered by farmers. To check this hypothesis, one would first scrutinize upstream of 1929 if there was actually agricultural overproduction in several countries: France, England, Italy and USA. Then by a rough calculation we will assess for each country the social consequences in terms of jobs and overall purchasing power. Second, we will return on the historical experiences of agricultural crises in the long run till 1680, whether they were food shortage or overproduction crises, and we will measure to what extend it’s possible or not to legitimately assume that there was a link with industrial or financial crises.

This paper will focus on the possible links between agricultural crises and economic crises and will look for evidences that would assess the hypothesis that the drop of agricultural price was a basic cause of such general crises through the fall of demand linked precisely to the fall in income suffered by farmers. To check this hypothesis, one would first scrutinize upstream of 1929 if there was actually agricultural overproduction in several countries: France, England, Italy and USA. Then by a rough calculation we will assess for each country the social consequences in terms of jobs and overall purchasing power. Second, we will return on the historical experiences of agricultural crises in the long run till 1680, whether they were food shortage or overproduction crises, and we will measure to what extend it’s possible or not to legitimately assume that there was a link with industrial or financial crises.

The Great Depression as Transition of the Global Food Regime?

Ernst Langthaler

The literature on the role of agriculture and food in the Great Depression oscillates between theoretically strong but empirically weak approaches on the one hand and empirically strong but theoretically weak approaches on the other hand. The paper addresses this tension by combining food regime theory with empirical evidence on agriculture and food in the interwar period. Accordingly, the Great Depression played a key role in the transition from the British-centered food regime (1870-1914) to the US-centered food regime (1947-1973): from extensive to intensive agricultural growth, from free trade to more protectionist policies and from plant-based to animal-based diets. Confronting this notion with evidence from data-driven studies, the paper reviews the conventional wisdom about the role of agriculture and food in the Great Depression.

The literature on the role of agriculture and food in the Great Depression oscillates between theoretically strong but empirically weak approaches on the one hand and empirically strong but theoretically weak approaches on the other hand. The paper addresses this tension by combining food regime theory with empirical evidence on agriculture and food in the interwar period. Accordingly, the Great Depression played a key role in the transition from the British-centered food regime (1870-1914) to the US-centered food regime (1947-1973): from extensive to intensive agricultural growth, from free trade to more protectionist policies and from plant-based to animal-based diets. Confronting this notion with evidence from data-driven studies, the paper reviews the conventional wisdom about the role of agriculture and food in the Great Depression.

The role of banks and monetary policy in Australia and Canada in the 1930s Depression

Jocelyn Pixley

Financial crises create depressions – as I show of Canada and Australia in the Great Depression – from political conflicts over mobile capital and local banks’ demands. When loan markets froze, repayments were called in 1929. The delays in devaluation, the types of debts and composition of economic sectors – rural, industrial, service – produced somewhat different responses from Wall Street and/or the City of London in these two ‘Dominions’: rich (white) rural export countries. Whereas Greenwald, Stiglitz et al, see 1930s’ US rural (labour intensive) decline, I stress states’ and banks’ roles, and varied urbanization: Australia’s rural sector was capital intensive, agribusiness privately financed from the 1880s (cf. North America); urban industrial and service sectors were labour intensive by the 1920s, and thus not an exclusive male story. But mobile capital is intolerant of ‘uncountable’ services; as well, Canada and Australia built state railways; Australia’s 1920s public debt on...

Financial crises create depressions – as I show of Canada and Australia in the Great Depression – from political conflicts over mobile capital and local banks’ demands. When loan markets froze, repayments were called in 1929. The delays in devaluation, the types of debts and composition of economic sectors – rural, industrial, service – produced somewhat different responses from Wall Street and/or the City of London in these two ‘Dominions’: rich (white) rural export countries. Whereas Greenwald, Stiglitz et al, see 1930s’ US rural (labour intensive) decline, I stress states’ and banks’ roles, and varied urbanization: Australia’s rural sector was capital intensive, agribusiness privately financed from the 1880s (cf. North America); urban industrial and service sectors were labour intensive by the 1920s, and thus not an exclusive male story. But mobile capital is intolerant of ‘uncountable’ services; as well, Canada and Australia built state railways; Australia’s 1920s public debt on urban infrastructure was ‘profligacy’.

Structural Change and Deep Downturns: The U.S. Farm Sector in the Great Depression

Christopher Boone

The global crisis in agriculture during the interwar period was an important contributor to the severity of the Great Depression. The combination of technological change within the farm sector and growing trade in agricultural products led to downward pressure on international agricultural prices and a decline in the demand for farm labor in many countries. Focusing specifically on the experience of the U.S. farm sector during the 1920s and 1930s, we show how the decline in commodity prices led to lower farm incomes and, in turn, a drop in consumption of nonfarm products by farmers. Technological change within the farm sector exacerbated the problem. Using detailed individual-level data on migration patterns, we show how mechanized farm areas expelled farm labor during the Depression. Our analysis emphasizes the importance of barriers to adjustment across sectors and the distributional impacts of asymmetric shocks.

The global crisis in agriculture during the interwar period was an important contributor to the severity of the Great Depression. The combination of technological change within the farm sector and growing trade in agricultural products led to downward pressure on international agricultural prices and a decline in the demand for farm labor in many countries. Focusing specifically on the experience of the U.S. farm sector during the 1920s and 1930s, we show how the decline in commodity prices led to lower farm incomes and, in turn, a drop in consumption of nonfarm products by farmers. Technological change within the farm sector exacerbated the problem. Using detailed individual-level data on migration patterns, we show how mechanized farm areas expelled farm labor during the Depression. Our analysis emphasizes the importance of barriers to adjustment across sectors and the distributional impacts of asymmetric shocks.

Agriculture, inter-war crisis, and the manifold performances of “rural Italies” in the recession

Francesco Chiapparino, Gabriele Morettini

The contribution analyses the forms of the 1930s recession in the diverse Italian rural environments (export-led and large estate productions in the South, sharecropping, mountain and subsistence agriculture, capitalist and industrial farming in Po Valley, etc.), their different impact on the crisis and the role played by the recovery policy of the Fascism. What emerges is the limited feedback of the rural depression on the overall aggregate demand, since consumption was strongly compressed also before in the countryside, and the – albeit differentiated – worsening of the traditional underemployment of Italian agriculture, partially mitigated by labour mobility (in the North), and by war mobilization and regime impulse to small ownership and sharecropping. The differentiated effects of these trends, as well as the selective impact of protection and subsidies, crystalized (and even sharpened) the dualisms of the country, making the recession a turning point for the divides that dramatically exploded after...

The contribution analyses the forms of the 1930s recession in the diverse Italian rural environments (export-led and large estate productions in the South, sharecropping, mountain and subsistence agriculture, capitalist and industrial farming in Po Valley, etc.), their different impact on the crisis and the role played by the recovery policy of the Fascism. What emerges is the limited feedback of the rural depression on the overall aggregate demand, since consumption was strongly compressed also before in the countryside, and the – albeit differentiated – worsening of the traditional underemployment of Italian agriculture, partially mitigated by labour mobility (in the North), and by war mobilization and regime impulse to small ownership and sharecropping. The differentiated effects of these trends, as well as the selective impact of protection and subsidies, crystalized (and even sharpened) the dualisms of the country, making the recession a turning point for the divides that dramatically exploded after the war.

2nd half

From boom to burst: Argentine primary sector, 1900s-1930s.

Julio Djenderedjian, Juan Luis Martiren

Between 1895 and 1914 Argentina experienced a huge economic growth. That process was motorized by a great boom in the agrarian sector, which boosted a fast industrial development. Nevertheless, from 1913 onwards, a new conjuncture began with a cycle of stronger volatility in commodity prices and became evident after the crash started in 1929. Economic literature has pointed out that the particular role and characteristics of the agrarian sector had a deep involvement in the fall of the Argentine economy, particularly taking into account that productivity limits for extensive growth had been reached in 1914. Rather than that, it seems that the question is why the Argentine economy's best performing sector, agriculture, has not been able to generate a higher investment rate. In this paper we will try to test that, by measuring factor productivity of the agrarian sector, and relating it to the performance of the whole economy.

Between 1895 and 1914 Argentina experienced a huge economic growth. That process was motorized by a great boom in the agrarian sector, which boosted a fast industrial development. Nevertheless, from 1913 onwards, a new conjuncture began with a cycle of stronger volatility in commodity prices and became evident after the crash started in 1929. Economic literature has pointed out that the particular role and characteristics of the agrarian sector had a deep involvement in the fall of the Argentine economy, particularly taking into account that productivity limits for extensive growth had been reached in 1914. Rather than that, it seems that the question is why the Argentine economy's best performing sector, agriculture, has not been able to generate a higher investment rate. In this paper we will try to test that, by measuring factor productivity of the agrarian sector, and relating it to the performance of the whole economy.

The 1929 crisis and the battle of the two wheats in Italy, between domestic and international markets Mignemi

Niccolò Mignemi

This paper aims to analyze the economic and social consequences of the Battle of wheat that the Italian fascist regime launched in 1925 to protect and modernize the grain agri-food chain. It will focus on the implementation of the wheat policy throughout the general crisis of the 1930s, testing the hypothesis of two different battles, one for common (or bread) wheat and the other for durum (or pasta) wheat. If Italy was dependent on wheat imports, the paper will explore how the Great Depression influenced the evolution of the domestic wheat production. On the farming side, the adoption of the biological and technological innovations by farmers will be observed comparing different agricultural regions. On the commercial side, the effects of the crisis will be examined in terms of the dynamics of wheat trade flows and the geography of the Italian commercial partners on international markets.

This paper aims to analyze the economic and social consequences of the Battle of wheat that the Italian fascist regime launched in 1925 to protect and modernize the grain agri-food chain. It will focus on the implementation of the wheat policy throughout the general crisis of the 1930s, testing the hypothesis of two different battles, one for common (or bread) wheat and the other for durum (or pasta) wheat. If Italy was dependent on wheat imports, the paper will explore how the Great Depression influenced the evolution of the domestic wheat production. On the farming side, the adoption of the biological and technological innovations by farmers will be observed comparing different agricultural regions. On the commercial side, the effects of the crisis will be examined in terms of the dynamics of wheat trade flows and the geography of the Italian commercial partners on international markets.

Market regulation and structural policies under the Spanish 2nd Republic: the crises of the 1930s and agriculture

Juan Pan-Montojo

In 1931, when a democratic republic was established in Spain, political groups had to face two different types of agricultural problems. On the one hand, the new regime inherited from the previous military dictatorship an aggravated “agrarian question” which referred both to the unequal distribution of land, and to the poverty of large rural groups. A large package of legislation was adopted, starting a plural land reform, and reorganising the rural labour market. On the other hand, relevant sectors of the export agriculture faced a declining demand in the international markets, whilst domestic prices of agricultural products did not escape an endemic instability. The government applied diverse commercial policies or developed new institutional devices to regulate markets. This paper will address the interconnections between both levels of governmental action, and their relationship to the new international agricultural politics in the 1930s, and explore the legacy of the republican agricultural programme.

In 1931, when a democratic republic was established in Spain, political groups had to face two different types of agricultural problems. On the one hand, the new regime inherited from the previous military dictatorship an aggravated “agrarian question” which referred both to the unequal distribution of land, and to the poverty of large rural groups. A large package of legislation was adopted, starting a plural land reform, and reorganising the rural labour market. On the other hand, relevant sectors of the export agriculture faced a declining demand in the international markets, whilst domestic prices of agricultural products did not escape an endemic instability. The government applied diverse commercial policies or developed new institutional devices to regulate markets. This paper will address the interconnections between both levels of governmental action, and their relationship to the new international agricultural politics in the 1930s, and explore the legacy of the republican agricultural programme.

The problem of the wheat and the political answers to the agricultural crisis in France of the 1930s

Alain Chatriot

The scale of the crisis of the wheat in France of the 1930s questions the whole French economy and then mobilized public policies. It is interesting to understand in has time the reactions of the economists, the politicians and also the representatives of the agricultural producers in the face of the crisis. The price collapse of wheat at the world level is translated in France in a cruel way at a moment when the country falls over to the surpoduction. The importance of the agriculture in the French economy and the political weight maintained of rural France explains from then on the multiple legislative answers to try to contain the crisis. The debates on the liberalism, the protectionism, the planned economy and the corporatism are then embodied in concrete measures according to the variations of the parliamentary majorities.

The scale of the crisis of the wheat in France of the 1930s questions the whole French economy and then mobilized public policies. It is interesting to understand in has time the reactions of the economists, the politicians and also the representatives of the agricultural producers in the face of the crisis. The price collapse of wheat at the world level is translated in France in a cruel way at a moment when the country falls over to the surpoduction. The importance of the agriculture in the French economy and the political weight maintained of rural France explains from then on the multiple legislative answers to try to contain the crisis. The debates on the liberalism, the protectionism, the planned economy and the corporatism are then embodied in concrete measures according to the variations of the parliamentary majorities.

Agricultural crisis in Mexico at the first phase of globalization, 1870-1929.

Alejandro Tortolero Villaseñor

The Mexican Agriculture, for many scholars, was responsible of the relative backwardness of the Mexican economy and refractory to markets after the independence. At the end of the 19th century, with the construction of an important railroad network, markets tend to link Mexico with the world economy and to create an internal market. The agriculture no longer experiences the crises of subsistence that had characterized the 18th century. With the opening of the markets prices become an important indicator of the agricultural sector. Our study will analyze the changes produced for successive agrarian crises, that of 1895, 1907, 1915 and 1929. Our paper analyzes the responses assumed for the agrarian sector in order to get out of the crisis. They go from the increase of the surface cultivated by tenants and sharecroppers, until the division of the old Latifundiums and the application of an agrarian reform.

The Mexican Agriculture, for many scholars, was responsible of the relative backwardness of the Mexican economy and refractory to markets after the independence. At the end of the 19th century, with the construction of an important railroad network, markets tend to link Mexico with the world economy and to create an internal market. The agriculture no longer experiences the crises of subsistence that had characterized the 18th century. With the opening of the markets prices become an important indicator of the agricultural sector. Our study will analyze the changes produced for successive agrarian crises, that of 1895, 1907, 1915 and 1929. Our paper analyzes the responses assumed for the agrarian sector in order to get out of the crisis. They go from the increase of the surface cultivated by tenants and sharecroppers, until the division of the old Latifundiums and the application of an agrarian reform.