When the Great Depression struck in 1929, agriculture had been reeling from overproduction and declining commodity prices since the end of World War I. To this crisis was now added massive national unemployment, reduced markets abroad, and the rising expenses and credit necessary to operate modern, highly mechanized farms. The administration of President Franklin D. Roosevelt was determined in its efforts to assist struggling farmers and make farming once again profitable, but it had first to surmount deep-seated constitutional and ideological objections to enlarging the federal government’s role in daily life. Yet, Congress convened an emergency session on March 9, 1933, to try to head off a complete collapse of the nation’s agricultural industry. The result was passage of the Agricultural Adjustment Act on May 12, 1933, which established the Agricultural Adjustment Administration (AAA). This enacted several novel ideas that had been floated throughout the 1920s but not enacted, including voluntary production limitations for cotton, corn, wheat, hogs, tobacco, rice, and dairy products, which were invoked to drive up commodity prices. Moreover, participating farmers were subsidized by the federal government for letting fields lay fallow and reducing their herd size. The government, which had levied a new tax on industrial processors of the aforementioned products, would mail farmers a monthly check based on the “parity” price ratios of the pre-World War I era. In effect, farmers would be paid not to produce certain crops. The government anticipated that through such voluntary reductions, parity prices for key commodities would be achieved and a pending collapse of the farming sector averted.
Implementation of the AAA’s program may have been well-intended, but it triggered a firestorm of public criticism. Coming at a time when workers were hard-pressed to find employment, many were outraged that the government enacted policies specifically designed to make basic necessities like food more expensive. Many of the programs also struck others as extremely wasteful in a time of general shortages. Slaughtering 6 million pigs and then disposing of their remains, along with ploughing under 10 million acres of cotton, may have made sense economically, but it rankled public opinion and further stoked conservative opposition to what was perceived as rising tyrannical bureaucracy. In practice, AAA policies primarily benefited the major planters and growers, who received large subsidies from the government, purchased additional tractors and machinery, and laid off unskilled laborers. Small farmers gained precious little to remedy their plight, and many accused the AAA of serving the interests of the American Farm Bureau Federation, which represented large commercial farmers. Nonetheless, millions of participants signed up by 1934, since a government check had become their only guaranteed source of income. That year the program was expanded to add barley, rye, peanuts, flax, cattle, and sorghum to the list of basic commodities subject to production limits.
Despite vocal criticism among conservative politicians, the AAA found its greatest challenge in the courts. On January 6, 1936, the U. S. Supreme Court found the act in violation of the Tenth Amendment to the Constitution and declared it unconstitutional. The Court held that farm problems were local in nature, not national, and therefore lay beyond the realm of congressional authority. The Roosevelt administration reacted quickly by passing the Soil Conservation and Domestic Allotment Act on February 29, 1936. This new bill had essentially the same objectives as the AAA, for it paid farmers to take acreage out of pro-duction—but now in the name of soil conservation. Where crops were grown, greater emphasis was placed on soilbuilding plants such as grass and legumes. Furthermore, all land laying fallow would be leased to the government, which subsequently made subsidies in the form of rent payment to participants. Stiff production quotas were also imposed on specific crops once two-thirds of all farmers had agreed to participate. However, despite the government’s best efforts, 1936 proved a bumper crop for cotton, and prices collapsed. Wheat, corn, and tobacco production also rose so that prices remained depressed. Two years later Congress was forced to pass a new Agricultural Adjustment Act, which funded the program through general revenues instead of processing taxes. The Commodity Credit Corporation was also created to make loans on surplus crops just below parity prices and also allowed farmers to store crops at government expense until market prices hit or exceeded parity levels.
All told, the AAA failed to solve the agricultural sector’s principal problem: huge crop surpluses. Moreover, farm commodity prices rose only to about 80 percent of parity prices by 1939. Large farmers profited most, at the expense of tenants, sharecroppers, and farm workers. But government subsidies nonetheless allowed average farming households to double their annual income by 1940, and the infusion of $4.5 billion throughout the crisis proved sufficient to forestall a major agricultural collapse. Farmers’ prospects brightened considerably with the onset of World War II, when focus of the AAA shifted to maximum production to meet wartime demands. And, thanks to their previous efforts at helping preserve the agricultural industry, American farmers proved fully capable of dramatically expanding food production and feeding the nation and many of its allies for the duration of the conflict. In sum, the AAA was hardly a completely successful story, but direct government subsidies have since become a standard feature of modern American agribusiness.
Further reading: David Eugene Conrad, The Forgotten Farmers: The Story of Sharecroppers in the New Deal (Champaign: University of Illinois Press, 1965); David Hamilton, From New Day to New Deal: American Farm Policy from Hoover to Roosevelt, 1928-1933 (Chapel Hill: University of North Carolina Press, 1991); Theodore Salou-tos, The American Farmer and the New Deal (Ames: Iowa State University Press, 1982); Theda Skocpol and Kenneth Finegold, State and Party in America's New Deal (Madison: University of Wisconsin Press, 1995).
—John C. Fredriksen
World History
