Agricultural Adjustment Act

Definition

The Agricultural Adjustment Act (AAA) was a federal law passed in 1933 as part of President Franklin D. Roosevelt's New Deal. The primary goal of the AAA was to address the severe economic hardship faced by American farmers during the Great Depression by raising crop prices and farm incomes through government intervention and subsidies.

5 Must Know Facts For Your Next Test

1. The AAA was enacted in response to the severe drop in crop prices and farm incomes during the Great Depression, which had devastated the agricultural sector.
2. The AAA provided direct payments to farmers who agreed to reduce their crop production, with the goal of limiting supply and driving up prices.
3. In addition to crop reduction, the AAA also established acreage allotments, which placed limits on the total land that could be planted for certain crops.
4. The AAA aimed to set crop prices at a 'parity' level, meaning they would be comparable to the more prosperous prices farmers received during the 1909-1914 period.
5. The AAA was challenged in the Supreme Court case United States v. Butler, which ultimately ruled the law unconstitutional in 1936, leading to the creation of the Soil Conservation and Domestic Allotment Act as a replacement.

Review Questions

• Explain how the Agricultural Adjustment Act (AAA) sought to address the economic challenges faced by farmers during the Great Depression.
  • The Agricultural Adjustment Act (AAA) was a key component of President Franklin D. Roosevelt's New Deal, designed to alleviate the severe economic hardship experienced by American farmers during the Great Depression. The primary goal of the AAA was to raise crop prices and farm incomes through government intervention and subsidies. This was accomplished by paying farmers to reduce their crop production, limiting supply and driving up prices. The AAA also established acreage allotments, which placed limits on the total land that could be planted for certain crops, further restricting supply. Additionally, the AAA aimed to set crop prices at a 'parity' level, meaning they would be comparable to the more prosperous prices farmers received during the 1909-1914 period.
• Analyze the key components of the Agricultural Adjustment Act (AAA) and how they were intended to benefit the agricultural sector.
  • The Agricultural Adjustment Act (AAA) had several key components that were designed to support the agricultural sector during the Great Depression. The first was the implementation of crop reduction, where the government paid farmers to voluntarily reduce their crop production in order to limit supply and drive up prices. The AAA also established acreage allotments, which placed limits on the total land that could be planted for certain crops, again with the goal of restricting supply. Additionally, the AAA aimed to set crop prices at a 'parity' level, meaning they would be comparable to the more prosperous prices farmers received during the 1909-1914 period. By reducing crop production, limiting acreage, and setting target prices, the AAA sought to increase farm incomes and provide much-needed economic relief to the agricultural sector during the depths of the Great Depression.
• Evaluate the impact and legacy of the Agricultural Adjustment Act (AAA), including its eventual ruling of unconstitutionality by the Supreme Court.
  • The Agricultural Adjustment Act (AAA) was a significant and controversial component of President Franklin D. Roosevelt's New Deal. While the AAA was intended to provide economic relief to the agricultural sector during the Great Depression by raising crop prices and farm incomes, its implementation and legacy were complex. The AAA's crop reduction and acreage allotment policies were successful in driving up prices, but they also faced criticism for unfairly benefiting larger, more prosperous farmers at the expense of smaller, poorer ones. Additionally, the AAA was challenged in the Supreme Court case United States v. Butler, which ultimately ruled the law unconstitutional in 1936. This led to the creation of the Soil Conservation and Domestic Allotment Act as a replacement. The AAA's legacy remains a subject of debate, with some historians arguing that it provided necessary support to the agricultural sector, while others criticize it for its unintended consequences and constitutional issues.

Related terms

Crop Reduction: A key component of the AAA that paid farmers to reduce their crop production in order to limit supply and drive up prices.

Acreage Allotments: The AAA established limits on the total acreage that could be planted for certain crops, further restricting supply to raise prices.

Parity Pricing: The AAA aimed to set crop prices at a 'parity' level, meaning they would be comparable to prices farmers received during the 1909-1914 period, a time of relative prosperity.