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Agricultural Adjustment Administration (AAA), New Deal program to restore U.S. agricultural prosperity during the Great Depression by cutting farm production, reducing export surpluses, and raising prices. The Agricultural Adjustment Act (May 1933) established the AAA under Secretary of Agriculture Henry Wallace.
- The Editors of Encyclopaedia Britannica
- Overview
- Background
- Objectives and implementation
- Effects and outcomes
Agricultural Adjustment Act, in U.S. history, legislation signed in May 1933 by Pres. Franklin D. Roosevelt as part of the Hundred Days phase of his New Deal domestic program. The Agricultural Adjustment Act was designed to provide immediate economic relief to farmers during the Great Depression (1929–39). It was intended to increase farmers’ purch...
During World War I, the government had encouraged farmers to produce bigger harvests. To achieve this farmers borrowed money to buy additional acreage and farm machinery to keep up with the increased demand to feed people at home and abroad, as much of Europe’s food production was impacted by the war. American farmers’ huge harvests continued into ...
With the Agricultural Adjustment Act, Congress declared “an acute economic emergency,” asserting that the system of commerce involved in regulating agricultural activities had devolved so far as to necessitate a relief program of national public interest. The act set forth three policy goals: (1) to restore the balance between farmers’ expenses and the market price of goods, (2) to encourage the correction of prices as quickly as the market would allow without causing additional instability, and (3) to ensure that prices did not hurt consumers while helping to provide for farmers. The time period to be used as a benchmark for prices and farmers’ incomes was August 1909 to July 1914 for all commodities except tobacco, which was pegged to the years between World War I and the Great Depression, August 1919 to July 1929.
The Agricultural Adjustment Act called for a voluntary “reduction in the acreage or reduction in the production for market, or both, of any basic agricultural commodity” (Section 8:1). This led to 10 million acres of cotton being plowed under and 6 million hogs being killed. Paying farmers not to produce consumable goods at a time when both the poverty rate and food insecurity were high—at least 30 deaths from starvation were recorded in 1933—proved to be controversial. Farmers were also affected by seeing their labour wasted. These repercussions led to the founding of the Federal Surplus Relief Corporation in October 1933. This corporation worked to utilize excesses purchased by the Agricultural Adjustment Administration and direct them to relief organizations like food banks.
The Agricultural Adjustment Act identified seven commodities that qualified for subsidies: wheat, corn (maize), hogs, cotton, tobacco, rice, and milk. Further sections of the act dealt with regulating exports and foreign trade. A processing tax was also introduced. This was calculated based on the difference between the current price of farm goods and the price those goods would have fetched in the target years, said to be the “fair exchange value” of the goods. The tax would be paid by the processor when the commodities changed form, as when wheat was milled or hogs were slaughtered, for example.
The act included the creation of the Agricultural Adjustment Administration, granting its employees the power to enforce the act and to assemble local committees to administer its provisions as necessary. The administration was given a budget of $100 million (roughly equivalent to $2.3 billion in 2023). This money was primarily intended for subsidy and benefit payments made directly to farmers. Several revisions to the Federal Farm Loan Act of 1916 were also made. That act had involved the creation of 12 federal land banks that encouraged farmers to take advantage of the boom by expanding. The Agricultural Administration Act’s intent was to issue farm loans and to refinance or purchase mortgages from farmers. The administration would also attempt to keep interest rates to 4 percent or less.
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In 1935, just two years after the introduction of the Agricultural Adjustment Act, farmers’ incomes were reported to be 50 percent higher than in 1932. But for some farmers and particularly for many Black sharecroppers in the South, the Agricultural Adjustment Act caused deeper poverty when it halted planting. It was the landowners who were paid the subsidies for not planting, and, in almost all cases, they did not distribute this money to their tenant farmers. Instead, some landowners used the money to purchase more machinery and modernize their farms, which meant less work for tenant sharecroppers when planting eventually did resume.
In 1936 the U.S. Supreme Court ruled the Agricultural Adjustment Act unconstitutional in U.S. v. Butler ,deeming that it unduly burdened processors with taxes, money that was then used to fund the subsidies for farmers. The Court decided that this power should have been reserved for the states, via the Tenth Amendment. The act was rescued by rolling its provisions into the Soil Conservation and Domestic Allotment Act of 1936, and then a modified Agricultural Adjustment Act was fully reauthorized in 1938, with additional provisions for conserving natural resources and prioritizing soil health as well as expansions to ensure the supply and demand of agricultural products in domestic and foreign markets remained at fair prices.
The Agricultural Adjustment Act (AAA) was a United States federal law of the New Deal era designed to boost agricultural prices by reducing surpluses. The government bought livestock for slaughter and paid farmers subsidies not to plant on part of their land.
- May 12, 1933
- the 73rd United States Congress
- .mw-parser-output .plainlist ol,.mw-parser-output .plainlist ul{line-height:inherit;list-style:none;margin:0;padding:0}.mw-parser-output .plainlist ol li,.mw-parser-output .plainlist ul li{margin-bottom:0}Agricultural Adjustment Act of 1933, The Farm Relief Bill
- 7 U.S.C.: Agriculture
29 de mar. de 2024 · The farm program, known as the Agricultural Adjustment Act, was signed in May 1933. It was centred in the Agricultural Adjustment Administration (AAA), which attempted to raise prices by controlling the production of staple crops through cash subsidies to farmers.
- The Editors of Encyclopaedia Britannica
La Ley de Ajuste Agrícola (en inglés, Agricultural Adjustment Act) fue una ley federal de los Estados Unidos, que formaba parte del programa del New Deal para restaurar la bonanza agrícola del país durante la Gran Depresión . Fue aprobada por el Congreso de los Estados Unidos en 1933, en un intento por reducir la producción ...
The Agricultural Adjustment Act provided much needed relief for farmers by paying them not to grow crops, thus helping to adjust prices. The press and the public immediately cried foul. To meet the demands set by the AAA, farmers plowed under millions of acres of already planted crops.
The Agricultural Adjustment Administration (AAA) was established in 1933 to carry out the production control and marketing agreement provisions of the Agricultural Adjustment Act. Unlike the Federal Farm Board of the Herbert Hoover administration, the AAA was made a part of the U.S. Department of Agriculture (USDA).
