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Agricultural Adjustment Act

Franklin D Roosevelt

Agricultural Adjustment Act:
Franklin D Roosevelt (FDR) was the 32nd American President who served in office from March 4, 1933 to April 12, 1945. The Agricultural Adjustment Act (AAA) was a law passed as part of FDR's New Deal Programs that encompassed his strategies of Relief, Recovery and Reform to combat the problems and effects of the Great Depression.

Definition and Summary of the Agricultural Adjustment Act
Summary and definition:
The U.S. Agricultural Adjustment Act of 1933 was a federal law, a farm bill, of the New Deal era.

The purpose of the legislation was to provide relief for farmers and other agricultural workers during the Great Depression. The farm program was organized by the Agricultural Adjustment Administration. Due to high production in the years leading up to the Great Depression, prices for agricultural commodities such as staple crops and livestock were extremely low.

The 1933 Agricultural Adjustment Act paid farmers not to grow more than a certain amount of crops and reduce populations of pigs and cattle in order to raise prices. The beef and pork resulting from the slaughter of excess livestock were then distributed through the Federal Emergency Relief Administration.

What was the purpose of the Agricultural Adjustment Act (AAA)? The purpose of the Agricultural Adjustment Act (AAA) was to restore agricultural prosperity by limiting farm production, reducing export surpluses, and raising prices

How was the Agricultural Adjustment Act meant to help farmers? As prices rose the farmersí income increased, improving their lifestyle and reducing the number of farm evictions

Why did critics dislike the Agricultural Adjustment Act? The critics of the AAA could not accept the policy of destruction. Others criticized the act as it did nothing to help the 3 million sharecroppers who did not own their land. But the harshest criticism came when the policies worked and resulted in the increase of food prices of up to 50%

Facts about Agricultural Adjustment Act
The following fact sheet contains interesting facts and information on Agricultural Adjustment Act.

The Great Depression hit the farmers hard as total farm income fell by two-thirds between 1929 and 1932. Prices of staple crops and livestock were extremely low and 60% of farms had to be re-mortgaged and by 1932 many farms were foreclosed and sold at auction.

The special congressional session called during FDR's first hundred days in office had to consider both the banking crisis and the agricultural emergency.

On March 4, 1933,President Roosevelt appointed Henry A. Wallace, the editor of the Wallace's Farmer, as his Secretary of Agriculture.

Henry A. Wallace was given the immediate task of reducing the grain and livestock surplus. Wallace worked with Assistant Secretary of Agriculture Rexford Tugwell to create the first major New Deal agricultural legislation, that was called the Agricultural Adjustment Act of 1933, aka the Farm Relief Bill

The AAA was signed into law by FDR on May 12, 1933. The purpose of the law was to help farmers by reducing production of crops, and in so doing, raising farm prices and encouraging more diversified farming.

Staple crops are the most common foods in people's diets and include wheat, beans, corn (maize), rice, peanuts, potatoes and oats. Other important crops were cotton and tobacco

Under the AAA farm program the government proposed to pay farmers not to grow crops such as cotton, tobacco, wheat and corn. The government would also pay farmers not to raise certain type of livestock such as sheep, cattle and hogs

Farmers were to be given benefit payments in return for limiting the amount of land given to planting crops and limiting the numbers of livestock raised

The problem was that by the time the AAA was implemented and organized the farmers had already planted their crops and had begun raising the season's livestock.

Emergency action was required to address the problem.  The agency therefore oversaw a large-scale destruction of existing crops and livestock in an attempt to reduce surpluses.

Over 6 million hogs and sows were slaughtered in the AAA's effort to raise prices, at a cost of over $30,000,000. Cotton farmers were paid $100 million to destroy 25% of their cotton crop. 2 million head of cattle were slaughtered from the Texas herds alone.

The severe draught of 1934 further reduced output and caused prices to rise still further

In the two years of the AAA the agency distributed some $700 million to farmers to restrict production and keep farm prices high

During 1934 - 1935 coercive taxes on cotton and tobacco forced farmers to cut the amounts that they marketed

By 1936 conditions had dramatically improved in agriculture, farm surplus fell greatly and food prices began to rise as did farm income

In 1936 the Supreme Court declared important sections of the 1933 Agricultural Adjustment Act invalid, and the 1936 Act was abandoned.

Congress promptly responded by adopting the 1936 Soil Conservation and Domestic Allotment Act, which encouraged conservation by paying benefits for planting soil-building crops instead of staple crops. The new farm-relief act achieved crop reduction through soil conservation practices.

Prosperity was slowly returning to the US but the AAA had suffered from its many critics due to the large price increases and the plight of tenant farmers who became unemployed and homeless when landlords took their fields out of production

The Agricultural Adjustment Act of 1938 empowered the AAA to make loans to farmers on staple crop yields in years of good crops.

The 1938 law also allowed for the storage of the surplus produce, which it could then release in years of low yield.

The 1938 law continued the policy of soil conservation was continued, and farmers could, by a two-thirds vote, adopt compulsory marketing quotas (as they did for cotton and tobacco).

US American History
1929-1945: Depression & WW2

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