As the United States transitioned from a relatively agrarian society to a more urban and industrial one in the latter part of the nineteenth century, the country's farmers faced numerous obstacles. More and more political power was finding its way into the hands of big business interests, which typically saw farmers as a population that they could exploit for their own profits.
During this period, farmers found it nearly impossible to set prices for the grains they harvested. The railroads, banks, equipment manufacturers, and grain elevator operators typically charged farmers very high prices for their products and services. Banks often set high interest rates for agricultural loans. This meant that it was increasingly difficult for farmers to stay out of debt. To make matters worse, farmers were hit hard by the falling price of grain commodities. As agricultural methods improved at home and more grain was imported from abroad, a surplus of supply meant that it was very hard to make a profit farming in America.
To combat these forces, many farmers started banding together. After the Civil War, many farmers joined the Granger Movement. The rural collectives that formed under this movement could collectively bargain for better prices from railroads, elevator operators, and other services that they relied on. They also pooled their harvests so that they could have some say in the price of their commodities. As a collective force, the Grangers lobbied local and federal governments to pass more legal protections for farmers and issue low-interest farm loans.
Overall, American farmers of this period were met with limited success. The government stepped in to help in a few instances, such as establishing warehouses in which farmers could store their grain when prices were down and by issuing government-backed loans. They formed the short-lived Greenback and the Populist Parties, which were briefly able to promote agrarian interests and influence the Progressive Movement. Despite these successes, life and business for farmers remained a struggle as competition for political recognition and struggles against business interests continued.
The period of American history stretching from the end of the Civil War to 1900 was a time of considerable unrest in rural areas. The transition of the United States from a predominantly agrarian to a modern industrialized economy inevitably led to a decline in the status and prestige of the American farmer.
Thanks to rapid changes in the fundamental nature of the American economy, farming communities across the country saw their standard of living fall considerably. Economic as well as political power was now firmly in the hands of big business, industry, and East Coast banks and other financial institutions.
Such power derived in considerable measure from the exploitation of rural communities, which found themselves on the receiving end of ruthless behavior by big business. For instance, monopolistic railroad corporations were able to overcharge farmers for the transportation of grain, safe in the knowledge that there was no competition.
The dominance of monopolistic lenders in the banking industry put an additional squeeze on farmers, as a low level of money supply ensured that interest rates remained high, making it harder for farmers to pay off their debts. Little wonder, then, that farmers were at the forefront of a campaign to increase the money supply through an increase in silver coins.
The basic problem that farmers in the late nineteenth century had to face was the overwhelming political power of big business. Many politicians at the state, local, and federal levels were effectively in the pockets of large corporations and assiduously looked out for their paymasters' interests.
Farmers tried to counter the growing political power of big business by forming themselves into collective groups such as cooperatives, political parties, and mass movements to agitate for their own interests. For instance, the Greenback Party, founded in the 1870s, was dominated by agrarian interests and sought to improve the condition of farmers by replacing a dollar backed by gold with paper money, or greenbacks. It was believed that such a measure would increase prices, thus improving farmers' economic conditions and making it easier for them to pay off their debts.
Overall, farmers achieved limited success in the short run. The Greenback Party, mentioned above, couldn't break the mold of the two-party system and only lasted for fifteen years. Even so, attempts by farmers to enhance their economic and political power would eventually bear fruit in the shape of the Progressive movement, which would attempt to curtail the power of big business through government regulation. The Progressives advocated other policies traditionally backed by farmers' groups, such as an eight-hour workday.
In due course, a number of the policies long advocated by agrarian interests, most notably the breaking up of major corporations, were implemented, as the Progressive program became influential in both the Democratic and Republican parties. In that sense, the farmers' organizations of the late nineteenth century can be seen as laying the groundwork for one of the most important political movements of American history.