The Agricultural Adjustment Administration (AAA)

The plight of the American farmer during the Great Depression has been discussed above. The basic problem for the farmers was that they produced too much, which lowered crop prices to a level below which they could make a profit and pay for supplies, machinery and mortgages. In order to address the problems of agriculture, FDR and his New Deal “brain trust” created the Agricultural Adjustment Administration (AAA), which was run by Henry Wallace, Secretary of Agriculture.

To remedy the overproduction problem, the AAA propped up crop prices through production limits. Farmers, who agreed to the production limits, would be paid for not planting crops or raising livestock. Further, subsidies through the Commodity Credit Corporation, which purchased commodities to be kept in storage, drove output down and farm prices up. The Farm Credit Administration (FCA), which was part of the AAA, provided loans to farmers to stop foreclosures. And, the Soil Conservation Service (SCS) tried to foster good farming practices that would prevent soil erosion and dust bowl conditions. Through these programs, between 1932 and 1935, farm income increased by more than 50 percent. ( But, in 1936 the Supreme Court declared the tax that subsidized the AAA programs unconstitutional. The Act was later replaced with different provisions that passed constitutional muster.