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Agricultural Adjustment Act,

Page history last edited by Mr. Hengsterman 1 year, 4 months ago

 

 

 

Agricultural Adjustment Act, 1933 and 1937
Helped increase farm profits by reducing production. Set up Agricultural Adjustment Administration – which controlled wheat, cotton, corn production by paying farmers not to plant that crop. 

 

The AAA paid farmers not to grow crops and not to produce dairy produce such as milk and butter. It also paid them not to raise pigs and lambs. The money to pay the farmers for cutting back production of about 30% was raised by a tax on companies that bought the farm products and processed them into food and clothing. The AAA also became involved in trying to help farmers destroyed by the creation of the dust-bowl in 1934.

 

 In 1936 the Supreme Court declared the AAA unconstitutional. The majority of judges (6-3) ruled that it was illegal to levy a tax on one group (the processors) in order to pay it to another (the farmers). In 1938, another AAA was passed without the processing tax. It was financed out of general taxation and was therefore acceptable to the Supreme Court.

 

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