In the late 19th and early 20th centuries, the North American agricultural frontier moved for the first time into semi-arid regions where farming was vulnerable to drought. Farmers who migrated to the region had to adapt their crops, techniques, and farm sizes to better fit the environment. But there was very incomplete information for making these adjustments, and ultimately they were insufficient: too many small, dry land wheat farms were founded, only to be abandoned in the midst of drought. In this paper, we examine why homestead failure occurred in the Great Plains, by analyzing two episodes in western Kansas in 1893-94 and in eastern Montana in 1917-21. We focus on the weather information problem facing migrants to the region. We examine the learning process by which migrants mis-interpreted new rainfall information and failed to adequately perceive drought. Homesteaders had neither an analytical framework nor sufficient data for predicting fluctuations in rainfall. Knowledge of the climate was primitive and the underlying mechanisms triggering droughts were not understood. Long-term precipitation records did not exist. Homesteaders gambled on the continuation of previous wet periods due to a possible climate change because of cultivation, and on the optimistic opinions of dryfarming experts.' Dryfarming doctrine argued that moisture could be saved in the soil, allowing small wheat farms to endure any dry period. Accordingly, homesteaders discounted new information that indicated drought. The subsequent waves of homestead busts that swept the region during severe droughts were part of the adjustment toward agricultural techniques, crops, and farm sizes more appropriate for a semi-arid region.
*Published:
Libecap, Gary D. and Zeynep Kocabiyik Hansen. "'Rain Follows The Plow' And Dryfarming Doctrine: The Climate Information Problem And Homestead Failure In The Upper Great Plains, 1890-1925," Journal of Economic History, 2002, v62(1,Mar), 86-120.
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