key term - Agricultural Adjustment Act

Definition

The Agricultural Adjustment Act (AAA) was a key piece of legislation enacted in 1933 as part of the New Deal, aimed at boosting agricultural prices by controlling production. It sought to stabilize farm income and improve conditions for farmers during the Great Depression by paying them to reduce crop acreage and livestock numbers, thereby limiting supply in order to raise prices.

5 Must Know Facts For Your Next Test

1. The AAA was part of Franklin D. Roosevelt's New Deal and aimed to address the plummeting prices and widespread financial distress among farmers during the Great Depression.
2. Farmers were incentivized to reduce production by receiving payments for not planting crops or raising livestock, which helped drive up agricultural prices.
3. The AAA initially faced criticism and legal challenges, particularly concerning its impact on tenant farmers and sharecroppers, who often did not benefit from the subsidies.
4. The Supreme Court declared the original AAA unconstitutional in 1936, leading to a revision of the act and its re-enactment in 1938 with modifications.
5. The policies of the AAA contributed to significant changes in American agriculture, promoting larger farms over smaller operations and altering land use practices across the nation.

Review Questions

• How did the Agricultural Adjustment Act aim to alleviate the economic struggles faced by farmers during the Great Depression?
  • The Agricultural Adjustment Act aimed to alleviate farmers' economic struggles by providing financial incentives to reduce crop production. By paying farmers to limit their planting, the AAA sought to decrease supply and raise agricultural prices, ultimately stabilizing farm incomes. This approach was intended to counteract the severe price drops that many farmers experienced during the Great Depression.
• Evaluate the criticisms and limitations of the Agricultural Adjustment Act in its early implementation.
  • Critics of the Agricultural Adjustment Act pointed out its limitations, particularly regarding how it impacted tenant farmers and sharecroppers who were often left out of the subsidy benefits. These groups did not own land and typically relied on crop shares, making them vulnerable as larger landowners received payments for reducing their acreage. Additionally, the act's focus on large-scale farming led to increased consolidation in agriculture, which further marginalized smaller farms.
• Analyze how the Agricultural Adjustment Act reflected broader themes of government intervention in the economy during the Great Depression.
  • The Agricultural Adjustment Act exemplified a significant shift towards government intervention in economic matters during the Great Depression. This act represented an effort by the federal government to stabilize markets and protect struggling industries through direct action, reflecting a departure from previous laissez-faire policies. The AAA set a precedent for future agricultural policy and highlighted ongoing debates about government roles in regulating supply, pricing, and support for different agricultural sectors amid economic crises.

Related terms

New Deal:

A series of programs and policies established by President Franklin D. Roosevelt to help the United States recover from the Great Depression.

Dust Bowl:

A severe drought in the 1930s that greatly affected agricultural production in the Great Plains, exacerbating the economic difficulties faced by farmers.

Subsidies: Financial assistance provided by the government to support or promote economic sectors, such as agriculture, often used to stabilize prices and incomes.