Question

Which of the following is the most important cause of the Great Agrarian Depression?

• A. Closure of banks
• B. Closure of factories
• C. Over production and fall of agricultural prices
• D. Crash ofstock market
• E. None of these

Answer 1

Answer: (C)

Over production and fall of agricultural prices

Mechanisation had reduced the need for labour. Production had expanded so rapidly during the war and post-war years that that there was a large surplus. Unsold stocks piled up, storehouses overflowed with grain, and vast amounts of corn and wheat were turned into animal feed. Wheat prices fell and export markets collapsed. This created the grounds for the Great Agrarian Depression of the 1930s that ruined wheat farmers everywhere.