A Historical Exploration of How Farmers Afforded to Purchase Land

How Were Farmers Able to Afford to Buy Land?

The Homestead Act of 1862

This was a game-changer for us. It enabled any adult citizen – or intended citizen – to claim a 160-acre plot of public land. The only stipulation was the requirement to improve the land by building a dwelling and growing crops. However, after five years, the settler could buy the land for a small fee. With such a possibility on the horizon, the appeal was irresistible for many.

But there’s an interesting facet to this: the Act also sparked numerous advancements in agricultural technology and practices. It wasn’t just about owning the land; farmers had to find effective ways to work on it too.

The Morrill Act of 1862

Simultaneously, the Morrill Act established institutions for higher learning, which included agriculture. This legislation provided states with federal land to sell, with the proceeds funding the creation of “land-grant colleges.” Our farming ancestors, therefore, were given access to advanced knowledge in agricultural science and engineering. The results revolutionized farming and made it a more efficient and productive endeavor.

Important Innovations in Agriculture

The late 19th and early 20th century was a time of significant advancement when it comes to technology. Improvements in farm machinery and the introduction of engine-powered equipment meant farm labor became less physically demanding.

Access to Credit

As we venture further into the historical context of farmers owning lands, it’s paramount to highlight the role of credit and loan systems that facilitated farmers in acquiring these lands. Access to Credit played a crucial role along with the Homestead Act and the Morrill Act.

Farm Loans and Mortgage Systems

The concept of farm loans and mortgage systems isn’t new. As early as the late 18th century, local banks and private lenders began offering credit to farmers. Under such systems, farmers pledged their farm or an equivalent asset as collateral for the loan. The loan amount could then be used to purchase lands and expand agricultural activities.

In the 20th century, the Farm Credit System (FCS) was established. As a federal agency, it provides credit to farmers at competitive rates. Farmers could now apply for a mortgage loan from any of the FCS banks across the country. 

Land Grants and Subsidies

Notably, land grants and subsidies acted as another source of credit for farmers. The government provided specific subsidies to aid farmers in acquiring land cheaply. These subsidies were mainly given to farmers who had been living on rented land to help them transition into landownership.

Additionally, the federal and state governments also issued different types of land grants in the 19th century. These grants were meant to encourage the active cultivation and development of large swaths of unoccupied land. 

Government Support and Programs

In our exploration of how farmers amassed wealth for land purchase, a significant factor to consider is the role of government support and programs. These programs were instrumental in providing farmers the tools needed to thrive.

Agricultural Adjustment Act

One noteworthy form of government intervention came in the form of the Agricultural Adjustment Act (AAA). This act was implemented in 1933 as part of the New Deal response to the Great Depression. Its prime objective was to raise crop prices by decreasing agricultural surpluses, thereby increasing the farming income. It accomplished this by offering farmers subsidies for reducing their crop production. The AAA marked a pivotal moment in farming history providing much needed federal aid and protection to farmers.

Farm Security Administration

The Farm Security Administration (FSA), another arm of the New Deal, was established in 1937. Its primary objective was to combat rural poverty by providing loans to farmers. However, FSA’s role wasn’t strictly financial. It also aimed to promote the importance of suitable land use practices, improved farming techniques, and living standards. It played a vital role in creating opportunities for farmers to expand their agricultural ventures.

Rural Electrification Administration

The third important program was the Rural Electrification Administration (REA). Introduced in 1935, REA’s objective was to supply electricity to rural areas, an amenity that urban areas already enjoyed. The program aimed to increase productivity by bringing the power necessary to run modern machinery and irrigation systems. REA was undeniably a boon to farmers, improving their efficiency and widening the doors for additional income streams.

These government programs paved the way for much of the prosperity witnessed in farming, especially in regards to land ownership. In the following sections, we will delve into the transformations in farming practices and technologies that further catalyzed the process and cemented farming’s position in the American economy. It’s clear that the government’s interventions extended beyond the bounds of immediate financial relief, venturing into realms that fundamentally reshaped farming and rural living.