Written by M. Sean High—Staff Attorney
Movement
towards Federal Legislation
In 1932, “at a time of near collapse of the
agricultural economy,” President Franklin Roosevelt named Henry A. Wallace as
Secretary of Agriculture.[1] In
1936, under the direction of Wallace, the United States Department of
Agriculture (USDA) began to actively investigate the possibility of a federal
crop insurance program. Significantly,
research regarding wheat yield results, collected from individual farms led USDA
to make a preliminary analysis that “wheat data could provide an actuarial
basis for crop insurance.”[2]
Meanwhile, in both 1934 and 1936, large portions of
the U.S. agricultural sector experienced significant difficulties due to
widespread drought. The effects of these
adverse weather conditions caused the general public to become increasingly
interested in the possible benefits that could be achieved through the use of
crop insurance.[3] As a result, crop insurance was listed among
the campaign issues of the 1936 presidential election.[4]
While both of the presidential candidates in 1936 expressed
their support for the concept of crop insurance, they disagreed on structure
and implementation. President Roosevelt favored
a “government-sponsored program,” while his Republican opponent, Governor
Alfred M. Landon of Kansas, “believed a private approach was preferable.”[5]
Shortly after Roosevelt’s 1936 presidential victory,
the President’s Committee on Crop Insurance released a report recommending the
establishment of a federal crop insurance program that applied to wheat only. According to the report, a federal crop
insurance program should “be administered by the USDA with policies sold by
local committees or boards of directors who could require minimum levels of
participation before offering insurance in a given county or region.”[6]
Based on the findings of the President’s Committee
report, on March 30, 1937, the U.S. Senate passed a crop insurance bill to
establish the President’s Committee’s recommendations. In time, U.S. House of Representatives
included legislation “nearly identical to the Senate bill” as part of the
Agricultural Adjustment Act of 1938.[7] As a result, the Federal Crop Insurance Act (FCIA)
was enacted on February 16, 1938 for the purpose of “promot[ing] the national
welfare by alleviating the economic distress caused by wheat crop failures due
to drought and other causes, by maintaining the purchasing power of farmers,
and by providing for stable supplies of wheat for domestic consumption.”[8]
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