As banks and other lenders demanded repayment for their expansive lines of credit, many farmers planted more hay fields and pastures to sell more grain to compensate for the low prices they received. The American Farm Bureau and trade groups, such as the American Soybean Association, finally acknowledged this disaster when plummeting land and machinery prices created a banking crisis.  At that point tens of thousands of farmers faced foreclosure and felt they had no alternative but to sell their farms — which meant losing their homes, livelihoods, and standing in their communities — to get out of debt. Many joined one or both of the tractorcades organized by American Agriculture Movement during the winters of 1978 and 1979, traveling hundreds or thousands of miles by tractors at a speed of roughly 15 miles per hour to Washington, DC. They sought support for 100 percent of parity — a price floor based on a crop's cost of production — and a moratorium on foreclosures. With but a few champions there, foreclosures, auctions and suicides escalated throughout farm country.

Meanwhile, grassroots activists had been organizing in their home states to help farmers, their families, and their communities manage this crisis. When the federal government offered virtually no hope or support, Willie Nelson, Neil Young, John Mellencamp, and dozens of musician friends held a day-long concert called Farm Aid on September 22, 1985, in Champaign, Illinois, to call attention to the farm crisis and raise funds for farmers in crisis.

Members of the North American Farm Alliance — a farmer protest organization that advocated a return to Roosevelt's New Deal farm policies — determined that an organization representing family farmers and ranchers was needed in Washington, DC, to amplify their concerns and change federal farm policy. In January 1986, with Farm Aid's support and encouragement, a number of grassroots advocacy organizations, including the American Agriculture Movement, Federation of Southern Cooperatives, Land Loss Prevention Project, Missouri Rural Crisis, Northern Plains Resource Council, and more, established the National Save the Family Farm Coalition, dba National Family Farm Coalition, or NFFC.

These leaders also agreed that NFFC should be established as a coalition of advocacy organizations, not of individual members. NFFC would be stronger with an existing base of organizations, some with hundreds or thousands of individual members working from different states toward common goals at the federal level. It would also be easier to organize events and outreach for developing policy recommendations that NFFC would represent to Congress and the administration.

The NFFC was built on two main tenets: raising crop prices in the marketplace to parity to promote family farm agriculture while eliminating the tax burden of deficiency-payment subsidies; and encouraging sound environmental farming practices, in part through a 'bushel-based' supply management program. These commonsense approaches, which would have kept farmers afloat and from planting every square inch of bare ground in order to stay afloat, were not so common among government leaders. Although farmers have historically been reticent to ask for government assistance, their outreach in the late 70s and early 80s went largely unanswered, amplifying the need for their message to be heard more often in face-to-face meetings by people with influence.

In September 1986, Farm Aid sponsored the United Farmers and Ranchers Congress in St. Louis where 2,600 representatives, elected at hundreds of grassroots meetings throughout the country, met for three days to craft and affirm resolutions based on parity to counter President Reagan's policies; the American Farm Bureau Federation did not participate. In 1987, the Harkin-Gephardt Farm Bill (aka the Family Farm Act of 1987), which reflected many of these resolutions, nearly passed in Congress but was defeated by influence from trade group lobbyists, some of whom had held USDA positions under President Reagan.