AGRICULTURAL ADJUSTMENT ADMINISTRATION
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 United States v. Butler (1936), but Congress quickly replaced it with the Soil Conservation and Domestic Allotment Act and with a second Agricultural Adjustment Act in 1938. The AAA and its successors continued to focus primarily on commercial producers, sustained the policies of acreage limitation and price supports in the form of government loans, and helped convert marginal croplands to grass and forage for livestock. This massive government involvement in the economic lives of Great Plains farmers is the most prominent legacy of the AAA.
See also POLITICS AND GOVERNMENT: New Deal.
James Marten Marquette University
Danbom, David B. Born in the Country: A History of Rural America. Baltimore MD: Johns Hopkins University Press, 1995.
Lowitt, Richard. The New Deal and the West. Bloomington: Indiana University Press, 1984.
Perkins, Van L. Crisis in Agriculture: The Agricultural Adjustment Administration and the New Deal, 1933. Berkeley: University of California Press, 1969.