SIC 9641

This category covers government establishments primarily engaged in the planning, administration, and coordination of agricultural programs for production, marketing, and utilization, including related research, education, and promotion activities. Establishments responsible for regulation and control of the grading, inspection, and warehousing of agricultural products; the grading and inspection of foods; and the handling of plants and animals are classified here. This government group also includes such entities as agricultural extension services, fair boards, marketing, and consumer services.

NAICS Code(s)

926140 (Regulation of Agricultural Marketing and Commodities)

Government establishments primarily engaged in the administration of programs for developing economic data about agriculture and trade in agricultural products are classified in SIC 9611: Administration of General Economic Programs. Government establishments primarily engaged in programs for conservation of agricultural resources are classified in SIC 9512: Land, Mineral, Wildlife, and Forest Conservation. Government establishments primarily engaged in programs to provide food to people are classified in SIC 9441: Administration of Social, Human Resource, and Income Maintenance Programs.

Industry Snapshot

The major federal agency in this category is the U.S. Department of Agriculture (USDA). This cabinet-level agency, established in 1862, works to improve and maintain farms, to cultivate markets for U.S. agricultural exports, and to regulate the integrity of farm commodities. These goals are accomplished through its various programs (e.g., loans and subsidy payments), marketing and outreach efforts, research, and regulations. The USDA works in conjunction with agriculture departments in states and territories.

Background and Development

While many of the early U.S. presidents considered themselves farmers, a cabinet department to address the needs of the country's largely agrarian society did not come into existence until the mid-nineteenth century. In 1839, Congress appropriated $1,000 for the collection of agriculture-related statistics and the distribution of seeds; this function was assigned to the U.S. Patent Office because Commissioner of Patents Henry L. Ellsworth supported aid to agriculture and the number of agricultural patents being handled by that office was larger than any other category of inventions.

Farming in America gradually shifted from subsistence cultivation to more commercial operations by the mid 1800s, and at the urging of the U.S. Agricultural Society (organized in 1852), a formal agriculture agency (not a cabinet department) was established on May 15,1862. The first commissioner of the new agency was Isaac Newton, a personal friend of President Lincoln and a farmer. It was during this time the department began to regularly publish statistical and research reports, send scientists to Europe and Asia to observe agriculture abroad, and take some initial steps toward regulation of commodities. In 1887, passage of the Hatch Act authorized experimental stations in the states, and in 1989, raised the agriculture bureau to cabinet status.

Much of the Department of Agriculture's proactive work began during the Great Depression, when farmers faced tremendous challenges and hard times. In 1933, the Agricultural Adjustment Act was passed, its purpose being to adjust production to meet demand, and ultimately establish marketing conditions that would raise farm prices to parity. While this legislation was declared unconstitutional by the U.S. Supreme Court in 1936, many of the functions assigned to the Agricultural Adjustment Administration were incorporated into USDA operations. In the post-World War II period, farmers and the USDA began addressing the problems of crop surpluses, subsidies, and development of new opportunities to maintain farmer income.

Divisions within the USDA that are involved with the marketing and regulation of commodities are the following:

One of the most important developments in commodities and price regulation has no direct connection to the USDA—the closing of the National Cheese Exchange. Located in Green Bay, Wisconsin, the cheese exchange was a nonprofit organization that helped to determine the price of cheese throughout the nation. In response to complaints from Wisconsin farmers about declining prices, and following a research study conducted by the University of Wisconsin that suggested the exchange was being inappropriately dominated by large traders such as Kraft Foods, Wisconsin's two U.S. senators (Russ Feingold and Herb Kohl) called for an investigation into the exchange's operations. Kraft Foods denied charges of cheese "dumping" in order to lower milk prices, and the Federal Trade Commission's 1996 investigation found no evidence of antitrust violations. But rather than fight what it labeled "assaults from farmers' organizations, politicians, and the media," the cheese exchange's functions have been shifted to the Chicago Mercantile Exchange. Although cheese futures trading was adopted by a New York commodity exchange several years ago, it has had little impact on pricing.

Current Conditions

In 1999, the USDA had a budget of more than $65 billion and employed 110,000 persons. It continued to serve the nation's 2 million farmers and 69 million rural residents. The agency also was responsible for providing 25 million lunches to the nation's school children each day. The USDA estimated that in 1999, the number of U.S. commercial farms was between 300,000 and 500,000. Commercial grain storage was estimated at approximately 8 billion bushels, with another 11 billion bushels stored on the farms.

Although there was a one-year increase in 1999 (for emergency funding to address the farm economic crisis and the President's Food Aid Initiative), the USDA's budget outlays have declined steadily from $63.1 billion in 1993 to an estimated $55.2 billion for 2000. The department's stated strategic goals for the FY 2000 budget were to expand economic and trade opportunities for agricultural producers; to ensure food for the hungry and an accessible supply of safe, nutritious, and affordable food; and to promote sensible management of our natural resources. In furthering these goals, early in 2000 the USDA announced new criteria for the labeling of "organic foods," eliminating from that category all genetically-engineered products and those which have been irradiated.

Highlights of specific program budgets for 2000 included $25.0 billion for the Farm Service Agency, $6.4 billion for the Foreign Agricultural Service, $1.7 billion for the Risk Management Agency, $10.9 billion for rural development programs, $21.7 billion for the Food Stamp Program, $742.0 million for the Food Safety and Inspection Service, $4.9 billion for natural resources and environment, $825.0 million for marketing and regulatory programs, and $2.1 billion for research and education.

Further Reading

Kendell, Keith, President of the National Grain and Feed Association. "Competitiveness in Agriculture and Food Marketing." FDCH Congressional Testimony, 20 October 1999.

National Archives and Records Administration. The United States Government Manual 1996/1997, Washington: GPO, 1996, 119-123.

"National Cheese Exchange Folds." Wisconsin State Journal, 26 April 1997, 8B.

Onken, John. "Will New Cheese System Really Change Things?" The Capital Times, 24 April 1997, 1B.

Rinard, Amy. "Cheese Exchange Closes Its Doors; Trading to Resume Next Week after Shift from Green Bay to Chicago." The Milwaukee Journal Sentinel, 26 April 1997, 1D.

U.S. Department of Agriculture (USDA). Available from 1999.

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