For the children - folic acid prevents neural tube defects

Neural tube defects - http://www.merck.com/mmhe/sec23/ch265/ch265g.html - are birth defects creating brain or spinal cord damage. Such conditions include spina bifida, hydrocephalus, or even anencephaly (brain tissue fails to develop).

The story is a simple one, best illustrated by this timeline, presented in 2000 by Dr. Andreas Papas:

1950's - Link of diet and neural tube defects suggested.

1970's - Epidemiological studies: Folic acid deficiency causes birth defects.

1980's - Folic acid reduced neural tube defects 58% (Lancet study)

1991 - CDC (Centers for Disease Control) recommends women with one affected child take folic acid before conception.

1992 - US Public Health Service and CDC recommends 400mcg of folic acid daily for women of childbearing age.

1993 - FDA officially approves health claims.

1996 - FDA authorizes addition of folic acid to grain products.

1998 - FDA mandates addition of folic acid to grain products.

Follow up: Data from CDC, published in the Journal of the AMA, show a "19% decline in neural tube defects and 23% decline in spina bifida from October 1998 through December 1999, compared to births prior to mandatory folic acid fortification." (Source for this quote and the timeline above: Health Gems Vol 7, Issue 1, by John and Susan Carlson.)