Agricultural Adjustment Act

Definition

The Agricultural Adjustment Act (AAA) was a New Deal program enacted in 1933 aimed at boosting agricultural prices by reducing surpluses. It sought to raise the income of farmers who had been struggling due to the Great Depression by paying them to limit production of certain crops, thereby stabilizing prices and income in the agricultural sector.

5 Must Know Facts For Your Next Test

1. The AAA was declared unconstitutional by the Supreme Court in 1936, leading to changes in how agricultural policies were implemented.
2. The act initially focused on major commodities like cotton, corn, and wheat, which were heavily affected by overproduction and plummeting prices.
3. Payments to farmers under the AAA were funded through a tax on food processing companies, which aimed to redistribute wealth within the agricultural sector.
4. The program led to significant decreases in crop production, which helped raise prices but also caused hardship for sharecroppers and tenant farmers who were often excluded from benefits.
5. The AAA laid the groundwork for future agricultural policy changes in the U.S., influencing programs that continued through the mid-20th century.

Review Questions

• How did the Agricultural Adjustment Act attempt to address the economic struggles of farmers during the Great Depression?
  • The Agricultural Adjustment Act sought to alleviate the economic hardships faced by farmers during the Great Depression by reducing crop surpluses and raising agricultural prices. It incentivized farmers to limit production of specific crops by offering them financial payments, thereby helping to stabilize their income and improve their financial situation. This approach aimed to create a balance between supply and demand in the agricultural market, ultimately benefiting both farmers and consumers.
• In what ways did the Agricultural Adjustment Act impact different groups within the agricultural community, particularly tenant farmers and sharecroppers?
  • While the Agricultural Adjustment Act aimed to support farmers by increasing crop prices through reduced production, it often excluded tenant farmers and sharecroppers from its benefits. These groups typically did not own land and were therefore less likely to receive payments under the program. As landowners reduced crop acreage to qualify for AAA benefits, tenant farmers faced eviction or loss of income, highlighting significant disparities in how agricultural policies were applied and who benefited from them.
• Evaluate the long-term effects of the Agricultural Adjustment Act on American agriculture and its influence on future agricultural policies.
  • The long-term effects of the Agricultural Adjustment Act significantly shaped American agriculture by introducing concepts of government intervention in farming practices. Although it faced legal challenges and criticism, its underlying principles influenced subsequent legislation that focused on price stabilization and farm support. Programs like the Soil Conservation and Domestic Allotment Act further built on these ideas, leading to ongoing government involvement in agricultural economics that continues today. The AAA's legacy is evident in modern farm bills that seek to balance productivity with sustainability while addressing issues of food security.

Related terms

New Deal:

A series of programs and policies established by President Franklin D. Roosevelt to promote economic recovery during the Great Depression.

Soil Conservation and Domestic Allotment Act: A 1936 act that expanded the principles of the AAA by promoting soil conservation and providing farmers with payments for reducing crop acreage to conserve soil.

Rural Electrification Administration: Established in 1935, this agency aimed to provide electricity to rural areas, improving living conditions and supporting the agricultural economy.