22 - 04 - 2014
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Relief for Farmers

A radical new approach to farm recovery was adopted when the Emergency Congress established the Agricultural Adjustment Administration (AAA). Through "artificial scarcity" this agency was to establish "parity prices" for basic commodities.

"Parity" was the price set for a product that gave it the same real value, in terms of purchasing power, which it had enjoyed during the favorable period from 1909 to 1914. The AAA would eliminate price-depressing surpluses by, paying the growers to cut down their crop acreage. The millions of dollars needed for these payments were to be raised by taxing the processors of farm products, such as the flour millers, who in turn would shift the burden to the consumer.

 

The AAA got off to a wobbly start. It was launched after much of the cotton crop for 1933 had been planted, and balky mules, trained otherwise, were forced to plow under countless young plants. Several million squealing pigs were purchased and slaughtered. Much of their meat was distributed to persons on relief, but some of it was used for fertilizer. "Planned scarcity" did have the effect of raising farm income, but the whole confused enterprise met with violent criticism. Farmers, food processors, consumers, and taxpayers were all in some degree unhappy. Paying the farmers not to farm actually increased unemployment, at a time when other New Deal agencies were striving to decrease it. When the Supreme Court finally killed the AAA in 1936, by declaring its regulatory taxation provisions unconstitutional, loud rejoicing was heard among critics of the plow-under program.

 

Quickly recovering from this blow, the New Deal Congress made haste to pass the Soil Conservation and, Domestic Allotment Act of 1936. The withdrawal of acreage from production was now achieved by paying the farmer to plant soil-conserving crops, like soya beans, or to let his land lie fallow. With the emphasis thus on conservation, the Supreme Court placed the stamp of its approval on the revamped scheme.

 

The Second Agricultural Adjustment Act of 1938, passed two years later, was a more comprehensive substitute, although it continued conservation payments.



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