Crop Lien: System & Definition

Crop Lien: System & Definition
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  • 0:00 The Crop-Lien System
  • 1:30 Farmers & The…
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Lesson Transcript
Instructor: Jason McCollom
The crop-lien system drew a majority of small farmers in the post-Civil War South into a cycle of dependency and agricultural poverty. Learn about this system and its socio-economic outcomes in this lesson.

The Crop-Lien System

A credit card is very enticing. With a piece of plastic, you have purchasing power! A new T.V., better clothes, and expensive dinners with friends are all at your fingertips. Until, that is, you receive the bill at the end of the month and realize the credit card company charges interest rates. If you're not careful, you can build up credit card debt with such high rates of interest that it would take years - or even decades - to pay off.

The crop-lien system had many of the same characteristics as the situation with a modern-day credit card. Landless farmers in the post-Civil War South often looked to their landlords to provide cropland, farm animals, seeds, and tools for their work growing cotton. These farmers often needed additional supplies, as well as food and clothing for themselves and their families, and for this, they looked to the country merchant.

Because there were few banks or other institutions that provided credit or currency in the postwar South, the country merchant provided poor farmers with the credit they needed to purchase necessities. The arrangement between the merchant and the farmer was called the crop-lien system.

The merchant allowed the farmer to purchase his goods on credit, in exchange for a lien on the farmer's forthcoming harvest. To ensure payment, the merchant often stipulated the farmer plant a cash crop, such as cotton. As with a credit card, the merchant charged exorbitant rates of interest, sometimes up to 60%.

This crop-lien system spread through the South in the decades after the Civil War, as poor black and white farmers replaced slave labor in the cotton areas of the region.

Farmers Caught & the Crop-Lien System

There were generally three types of farmers who ended up stuck in the crop-lien system: small farmers, sharecroppers, and tenant farmers.

Most small farms in the postwar South were financially unstable and chronically short of cash. So the small landowner often had to guarantee a portion of his upcoming crop to the country merchant, in exchange for the goods he needed - which were purchased on credit.

The sharecropper worked someone else's land and paid rent with a portion of his harvest. Though the landlord provided the sharecropper with tools, seeds, and animals, he still needed certain supplies, and thus the sharecropper looked to the country merchant.

The tenant farmer had his own animals, tools, and seed. But he didn't own land and had to work for a landlord and pay rent, sometimes with a portion of his crop. Often without cash, the tenant farmer also found himself at the mercy of the country merchant.

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