Copyright © 2011 by University of Nebraska–Lincoln, all rights reserved. Redistribution or republication in any medium, except as allowed under the Fair Use provisions of U.S. copyright law, requires express written consent from the editors and advance notification of the publisher, the University of Nebraska–Lincoln.
A decade-long agricultural depression sparked by plunging crop and livestock prices inspired President Franklin D. Roosevelt and New Deal reformers in 1933 to implement the Agricultural Adjustment Administration, the first federal program to limit agricultural production. The dramatic expansion of exports during World War I–beef exports increased more than 100 percent, wheat exports more than doubled, and oats exports soared more than 2,400 percent–led to record prices and the cultivation of millions of acres of previously unused land. With peace and the recovery of European agriculture, demand and prices dropped quickly: corn fell from $1.20 per bushel in 1917 to 26 cents in 1921, while wheat, hogs, and cattle fell to prewar averages. At the same time, the earning power of the nation's farmers declined, land prices plummeted, and thousands of Great Plains banks failed.
The generally booming national economy
made it easy to ignore the farmers' plight, but
when the stock market crash of 1929 sparked
the Great Depression, the Democratic administration
elected in 1932 turned its attention to
agriculture, passing the Agricultural Adjustment
Act (AAA) during the frantic "100 Days."
The bill drew on earlier attempts to help farmers
achieve parity, a complex formula in which
the prices farmers earned for their products
would fluctuate depending on the prices of
goods they bought, with the years 1909–14
considered "normal." Previous attempts, such
as the McNary-Haugen Bill, had proven politically
untenable, but the mounting crisis in
agriculture forced Roosevelt to take the dramatic
step of involving, for the first time, the
federal government directly in the economic
decisions made by farmers. The aaa initially
paid farmers to reduce production of seven
major commodities–including corn, cotton,
and wheat–and later added eight more, including
cattle. Administered by county extension
agents and farmers committees, the program
was paid for by a tax on processors of
agricultural products.
Farmers welcomed the government checks that helped them survive the drought and grasshoppers plaguing the Great Plains in the 1930s; in some areas, 80 to 90 percent of the population relied on federal relief. Of particular value to Plains farmers were the massive livestock-buying programs of the mid-1930s. Responding to the unprecedented drought and dust storms of 1934 and 1935, the government purchased seven million cattle, sending them to greener pastures or slaughtering and distributing them to needy families through other federal agencies. Despite the popularity of these government payouts, rising food prices, payments that tended to favor landlords over tenants, and the failure of the aaa to raise prices to anything actually approaching parity limited the overall success of the program.
The Supreme Court ruled the AAA unconstitutional
in
See also POLITICS AND GOVERNMENT: New Deal.