A county agent's office in San Augustine, Texas in 1939. The farmer on the right is receiving his AAA check. (Courtesy Library of Congress)
GREENWICH, N.Y. — The Agricultural Adjustment Act was an important piece of legislation that still touches American farmers today. Read on to learn about Franklin D. Roosevelt’s “New Deal” for farmers.
When Franklin D. Roosevelt took office in March 1933 rural America was in a perilous situation. The 1920s were a difficult time for American farmers. Farm production increased dramatically in World War I to supply war-time food needs at home and abroad. Government price supports also helped make the war years very prosperous for farmers. However, after the war, American farmers continued to overproduce. Throughout the 1920s commodity prices continually fell and so did farm incomes. The problem was compounded by the fact that farmers often increased production further to try and make up for the low prices contributing to the problem. While urban areas did not experience Depression-like effects until 1929, farmers and rural Americans were living in hard economic conditions for several years prior (Brands, p. 191).
From 1929-1932 gross farm income fell from $12 billion to $5 billion (Smith, p.289). Unable to make payments and pay off debts, farm foreclosures became tragically common across the country. In a cruel twist, the abundance of commodities produced by farmers were unable to be sold while millions of people in the U.S. faced hunger. The hardships produced unrest in rural areas as angry farmers resisted evictions, protested local and state governments and threatened violence if nothing was done to help. Troubles were so widespread that after Roosevelt’s election, the Farmer’s Union president John Simpson wrote in a letter to the president-elect, “My candid opinion is that unless you call a special session of Congress…and start a revolution in government affairs, there will be one started in the country. It is just a question whether or not you get one started first…” (Brands, p. 324).
Though never a farmer himself, Roosevelt recognized agriculture’s importance and possessed a passion for conservation. Born January 30, 1882, Roosevelt grew up on a large estate along the Hudson River in Hyde Park, New York called Springwood . As an only child, young FDR spent much of his childhood exploring the estate’s fields and forests and sailing on the river. Two main interests he developed as a child were ornithology and forestry. The estate also included farmlands that were rented to farmers in the area.
After his father passed away Roosevelt took over some of the management of the estate. Partnering with relatives and local farmers he learned about the region’s natural resources and soil and always sought to implement measures that would keep the land in good health (Brinkley, p. 35-37, 54-55). Forest management was also very important to him and the self-professed “tree farmer” at times planted 20,000-50,000 trees a year at Springwood (Smith, p. 320).
After his inauguration, FDR immediately jumped into his role as president enacting a series of programs called the New Deal that sought to provide relief to the American people, help the economy recover, and reform economic and business institutions to prevent future depressions. After enacting legislation to stop the spiraling bank crisis, he turned his attention to agriculture. Roosevelt saw a farm-centered program as foundational to the success of the New Deal. Historian Jean Edward Smith wrote in his biography FDR, “Not only was agriculture the most perennially depressed sector of the economy, but ever since his experience as a state senator, FDR…had stressed the relationship between farm prosperity and the well being of the rest of the country. If farmers had no money to buy what industry produced, the cities suffered as well…” (Smith, p. 318-319).
The result was a bill called the Agricultural Adjustment Act (AAA). Under the AAA farmers were paid subsidies to decrease planted acreage of commodities or reduce livestock numbers. In a system called “domestic allotment,” the Agricultural Adjustment Administration (set up to administer the program) would set acreage limits of crops and herd size limits for participating farmers. At first, the act applied only to farmers who grew seven main commodities: corn, wheat, rice, cotton, tobacco, hogs, and milk. Later, other crops were added including beef, dairy cattle, peanuts, barley, flax, sorghum, sugar beets, sugar cane, and potatoes.
The funds given to participating farmers were derived from a tax placed on food processing operations like milling, meat packing, and canning. The goal of the program was to raise farm commodity prices by creating a shortage. The aim was to get prices raised to levels experienced between 1909 and 1914, a time when farmers had parity. Without a surplus of crops, the belief was that the price of farm products would rise as supply and demand were balanced therefore earning farmers greater income.
Passage of the bill was difficult. Many amendments needed to be added to placate politicians and representatives of the varying segments of the agriculture industry who had differing agendas. Roosevelt was willing to work with these desires. With Secretary of Agriculture Henry Wallace and advisors Henry Morgenthau and Rex Tugwell leading negotiations, the bill was able to pass (Brands, p. 325-328).
From the start the Agricultural Adjustment Act was controversial. Apart from the greater governmental intervention it brought to agriculture, it faced a wave of bad optics in its first year. By the time the AAA passed in May 1933 planting had already occurred in the South and around 10 million acres of cotton crops had to be plowed up along with other crops. Even worse was the reduction of livestock herds. In 1933 baby pigs, pregnant sows, and cattle were slaughtered to reduce herds as part of the program. In the end, it is believed around six million hogs were slaughtered. A great number of slaughtered animals ended up being buried in massive pits, but some of the meat from these reductions was purchased and packed by the government for distribution through relief programs. At a time when Americans all over were struggling with hunger, the purposeful slaughter of animals and destruction of crops was a public relations disaster.
Despite this rocky start many farmers bought into the program because they were desperate for relief of any kind. In addition to the Agricultural Adjustment Administration, the AAA enlisted the help of County Extension agents and local agriculture teachers to help educate farmers on the stipulations of the AAA and how to implement it on their farms. For participating farmers, the AAA was a help in the short-term. AAA subsidies injected around $2 billion into the ag sector, and these payments were the main source of income for many farms and helped keep them afloat. By 1935 farmers’ income was double what they were earning in 1932.
However, not all farmers benefitted from the program. Under the AAA only landowners could receive payments meaning sharecropping and tenant farmers were left out of the benefits. Landowners did not always share their payments with sharecroppers, and in some instances used the funds to replace them with machinery. In particular, this unintended consequence affected black sharecroppers in the South. For cash-tenants that could get payments the money often went right to their landowner leaving them in no better position than before. One study estimates that the AAA may have put two million sharecroppers out of work.
In 1936 the Agricultural Adjustment Act hit a setback when it was struck down by the Supreme Court. The case Butler vs. United States determined that the tax on food processors to pay for the AAA’s farm subsidies was unconstitutional. But just two months later the AAA reappeared in the form of the Soil Conservation and Domestic Allotment Act (SCDAA).
In this legislation, farmers received payments to remove acreage of certain commodities and instead use that acreage to implement soil-friendly measures like planting grasses and legumes, terracing, and contour farming. The goal was still to raise prices by reducing surplus crops, but now it had the added benefit of implementing conservation practices to improve the health of the land. Payments to farmers would be derived from U.S. Treasury funds to avoid court violations. After seeing the effects of stressed and exhausted land in Dust Bowl regions Roosevelt urged participation saying, “The only permanent protection which can be given consumers must come from conservation practiced by farmers…” (Brinkley, p. 337-338). With these changes, roughly 53 million acres of land were taken out of production and used for conservation purposes.
The AAA was again revised in 1938 keeping the changes made in SCDAA. It also included new measures like price supports for crops in order to maintain supply and demand and fair pricing of agricultural products. The 1938 AAA is still in effect today as a piece of permanent legislation. The law has been used as the basis for other farm legislation that has occurred since.
The efficacy of the AAA is still under debate today and its legacy is still felt in American agriculture. It did support and relieve downtrodden farmers at a time when they needed help, but also had the unintended effect of pushing others out of agriculture and increasing mechanization. Some historians also point to droughts in the U.S. at the time as contributing to the rise of farm prices and not just the AAA. Its impact today is most felt in governmental interaction in agriculture. Like other New Deal programs in other industries, the AAA gave the government a greater role to play in American agriculture through its use of domestic allotment, conservation incentives, and price supports to name a few. The AAA formed new relationships between the government, American farmers, and the agricultural economy.
After going through many changes through the years, the Agricultural Adjustment Administration is known today as the Farm Service Agency which provides a wide range of services to farmers like conservation programs, disaster relief, farm loans, price supports, and much more.
Chandler Hansen grew up and lives in Easton, NY. He is a graduate of Gordon College where he earned a bachelor’s degree in History. He serves as a writer and editor for Morning Ag Clips.
