Undoing the Bad Legacies of the New Deal: The Case of Agriculture

Undoing the Bad Legacies of the New Deal: The Case of Agriculture

Ritwick Ghosh

The New Deal set the foundation for today’s progressive movements, but not all its legacies are positive. In the agriculture sector, the path set by the New Deal is now holding back progressive actions. For the GND to effectively decarbonize agriculture, it must first undo the bad legacies of the New Deal.

Agriculture and the New Deal

The Agricultural Adjustment Act (AAA) was a hallmark New Deal policy. The AAA paid farmers to produce less; this regulated commodity supply, increased prices and boosted incomes. To implement these policies, a massive bureaucracy was erected, and soon farm lobbies and regional groups followed.

In 1936, the AAA was deemed unconstitutional by SCOTUS, but this did little to hurt the agenda. Agricultural historian Dr. Wayne Rasmussen pointed out in the 1980s, virtually every agricultural program that began in the 1930s was active then. Direct payments continued under a new justification, soil erosion. These payments were able to reduce erosion, but their main goal was always to support farm income. This is mostly true today.

Fertilizer: The friend and foe

The dominant environmental concern at the time of the New Deal was soil erosion. Today it is air and water pollution caused by the extensive use of nitrogen-based fertilizers.

The discovery of the Haber Bosch process is among the most important technological breakthroughs of the 21st century. It created a reliable way to feed nitrogen to plants. The US government actively disseminated this innovation. In the post-WW2 period, redundant bomb factories were repurposed to produce fertilizer, flooding the market with cheap fertilizer. As a result, nitrogen fertilizer use increased from 17.0 lb/acre/yr in 1960 to 83.6 lb/acre/yr in 2013.

This rapid increase in fertilizer use destabilized the nitrogen cycle: the steady flow of the nitrogen molecule from air to soil and water and back to air. Old environmental problems that we thought we had solved like the ozone hole have been reignited as well as new ones such as local water quality issues.

Importantly, every application of nitrogen fertilizer releases N2O, a greenhouse gas with a 100-year global warming potential 310 times that of carbon dioxide. Today, the agriculture sector is responsible for as much as 9% of total US greenhouse gas emissions, most of it caused by fertilizer application.

Policy Solutions

Scientists conclude that emissions are an inevitable product of fertilizer use but there are ways to minimize emissions. Reducing the amount of fertilizer applied without compromising yields is key. This is possible by adopting best management practices like cover crops or innovative products like slow release fertilizer. Some suggest it is possible to entirely eliminate fertilizer from the ag system by transitioning to agro-ecological farm management. The solutions are there, but the policies to promote the solutions have been implemented in piecemeal and ineffective ways.

The preferred policy instrument has been direct financial incentives to farmers, a New Deal legacy. Through a number of direct payment programs, farmers are incentivized to adopt climate friendly practices. These programs are not solely focused on fertilizer management but address a host of on and off farm ecological issues.

As of 2014, the USDA spends about US $5.5 billion/year through a variety of payment programs but political economists argue that the supply control objective remains intact. They show how programs are beset with poor monitoring, weak targeting, and leakage. There are many good ideas out there to fix these problems, but the political coalition built up from the New Deal has no real pressure to change. Whatever little pressure there is, they easily deflect it.

Fixing Bad Legacies

Policy legacy runs deep. New Deal Agricultural policies have withstood the test of time because of its politics. The direct payment policy has something for everyone. Farmers, politicians, environmentalists, and suppliers are all equally satisfied (or unsatisfied) with the political compromise and change has proved impossible to negotiate. Over time, this commitment has been institutionalized in the form of performance targets, training sessions, and professional cultures.

This commitment serves important welfare concerns but relying on the same policy coalition to police bad environmental behavior on farms is not working.

Yet it is not the case that the agricultural policy establishment is too bureaucratic or lacking innovation. It has successfully reformed in other areas; It has kept pace with social and technological changes. They invest heavily in research and development and in local partnerships. The problem is not a lack of science or bureaucratization but policy inertia on the specific subject of rationalizing direct payments.

Decarbonization will require upending this legacy, working around it, or at least correcting it. First, the GND could bring non-point source pollutants like N2O within the domain of the Clean Air Act (CAA). This will expand regulatory authority and decouple nitrogen management regulation from the weaker voluntary initiatives. It would also shift responsibility to the Environment Protection Agency (EPA) and state environmental quality departments. When paired with other welfare policies, negative economic burden posed by regulation could be counteracted. However, policing farmers is politically controversial and perhaps too complicated to implement.

Second, a more pragmatic idea is to go beyond the farmer. Policies could instead focus on regulating the three large fertilizer companies. It could force companies to distribute slow-release fertilizers. Companies who already specialize in these technologies will benefit and less innovative actors will be booted out.

Lastly, existing conservation programs should be simplified and integrated. Programs should focus on holistic conservation approaches and sustainability transitions rather than yield goals. The pursuit of market-based competition must be grounded in the reality of practical complexities. The oversight of programs should also be dialed up a few notches by introducing annual scientific checks and sanctions.

The lack of progress in addressing nitrogen pollution presents important insights toward theorizing institutional change and inertia. How the agricultural policy regime has successfully resisted change is a sign of its power, creativity, and the lack of any major pressure to change.

Today, we need bold proposals but also strategic policy thinking. Ideally, the GND would combine these measures but also create space for future modifications. Formally requiring periodic reflection would limit the possibility of cementing bad legacies.

Ritwick Ghosh is a Faculty Fellow in the Department of Environmental Studies at New York University.