IDS Unit 7

ID: Agricultural Adjustment Act (AAA)

When: May 12, 1933

Who:

• President Franklin D. Roosevelt: Proposed the New Deal programs, including the AAA, as a response to the Great Depression.
• Farmers: Directly affected by the AAA, intended to provide relief and stabilize the agricultural sector.
• Henry Wallace: Secretary of Agriculture under FDR, played a key role in developing and administering the AAA.

What:

The Agricultural Adjustment Act (AAA) was a federal law designed to boost agricultural prices by reducing surpluses. The government paid farmers to reduce their production of staple crops such as cotton, wheat, corn, tobacco, and rice. The goal was to increase demand and raise prices, thereby improving farmers’ incomes. It also included measures for soil conservation.

Impact: Why Significant?:

• Farm Relief: Provided immediate relief to struggling farmers by increasing their income through government subsidies.
• Price Stabilization: Helped to stabilize agricultural prices and reduce surpluses, contributing to a more balanced market.
• Controversy: The AAA was controversial because it involved the destruction of crops and livestock during a time of widespread hunger.
• Declared Unconstitutional (1936): The Supreme Court declared the original AAA unconstitutional in United States v. Butler (1936), arguing that the federal government lacked the power to regulate agricultural production.
• Second AAA (1938): A revised version of the AAA was passed in 1938, addressing the constitutional concerns raised by the Supreme Court. This version focused on soil conservation and marketing quotas.
• Long-Term Impact: The AAA laid the groundwork for future agricultural policies and government intervention in the agricultural sector. It established the precedent for government subsidies and price supports in agriculture, which continue to be a part of American agricultural policy today.