Agriculture Adjustment Administration. In 1933, American agriculture neared collapse as farm bankruptcies and foreclosures multiplied and agricultural prices fell below the cost of production. President Franklin Delano
Roosevelt instructed his agricultural experts to draft legislation. The result was the Agricultural Adjustment Act (AAA) of May 1933. The law's fundamental goal was “parity”: raising basic farm prices until they were in balance with the general economy. One way was to eliminate existing commodity surpluses by taking farm acreage out of production and inducing farmers to produce only what was needed for domestic consumption. The government paid benefits to farmers who contracted to reduce acreage and also offered “parity” payments on the crops actually grown. To finance these payments, the secretary of agriculture taxed the domestic processors of basic commodities—wheat, cotton, tobacco, corn‐hogs, and milk products. Since pork and milk production could not be controlled effectively by reducing acreage, the government negotiated agreements among the meat packers and dairy companies to regulate markets and fix prices.
The law created the Agricultural Adjustment Administration to administer the new system. The first administrator was George N. Peek, a businessman and agricultural reformer. Because Peek assumed power in 1933 after crops had been planted and sows were bearing litters of pigs, his agency contracted with farmers to plow under nearly half of their crops and to slaughter baby pigs. Although calculated to increase prices and raise farm income, the destruction of crops and livestock stirred widespread dismay.
By late 1935, the AAA had enabled agriculture to approach a parity position. AAA payments especially benefited larger commercial farmers and southern planters. Acreage reduction, however, hurt tenant farmers and sharecroppers, many thousands of whom were evicted or received pitifully small payments.
The AAA saved agriculture from collapse, but as the crisis eased, constitutional questions arose. In 1936 the U.S.
Supreme Court struck down the act for exceeding the government's interstate commerce powers. To keep the AAA operating, Congress passed a new law that preserved AAA programs under the pretext of soil conservation. In 1938 Congress passed a second AAA that emphasized price supports and subsidies. Congress ended the AAA during
World War II as agricultural prices rose sharply and demand exceeded supply; the Department of Agriculture assumed many of the AAA's programs and implemented them as the core of post–World War II agricultural policy.
See also
Agriculture: Since 1920;
Cotton Industry;
Dairy Industry;
Federal Government, Executive Branch: Department of Agriculture;
Livestock Industry;
New Deal Era, The;
Sharecropping and Tenantry;
Tobacco Industry.
Bibliography
Edwin Nourse,, Joseph Davis,, and and John D. Black , Three Years of the Agricultural Adjustment Administration, 1937.
David E. Conrad , The Forgotten Farmers: The Story of Sharecroppers in the New Deal, 1965.
David E. Conrad
