During the 1870s, farmers in the West and South were afflicted by falling prices, mounting debt and climbing interest rates. A response to these conditions was found in 1877 with the creation of the Southern Farmers’ Alliance (formally the national Farmers’ Alliance and Industrial Union). The SFA grew when the Grange movement was declining as a force for reform. During the 1880s, the SFA claimed more than three million members, many of them involved in cotton production. Only whites were accepted for membership; the blacks would form a similar, but separate group.
The primary concerns of the Southern Farmers’ alliance were twofold:
The Alliance addressed these concerns by fashioning cooperatives and trade agreements, efforts that improved the lot of some farmers.
Purchasing Issues. Southern farmers attempted to band together to purchase equipment and supplies in bulk for price breaks.
Marketing Issues. Farm prices had been declining since the early 1870s, which provoked farmers' increasing resentment of middlemen's fees. Impetus grew to discover ways to bypass them.
Tension developed over the question of affiliation with a political party. Some members believed that cooperative ventures were less beneficial than an expansion of the currency, creating support for the greenback movement and later the free silver cause. The Alliance proved to be incapable of confronting the farm overproduction issue.
The Alliance supported the Populist Party in the Election of 1892, but declined rapidly in its aftermath.