The Agricultural Adjustment Act (AAA) was a United States federal law enacted in 1933 as part of President Franklin D. Roosevelt’s New Deal. Its primary aim was to raise agricultural prices by reducing crop surpluses. The act paid farmers subsidies to reduce the production of certain crops and livestock. These subsidies were funded by a tax on companies that processed farm products. The goal was to increase farmers’ income by limiting supply and driving up demand. For example, cotton farmers were paid to plow under existing crops, and hog farmers were compensated for slaughtering portions of their livestock.
This legislation holds significance because it represented a major intervention by the federal government into the agricultural sector. Prior to the AAA, the government played a less direct role in regulating farm production and prices. The act sought to alleviate the economic hardships faced by farmers during the Great Depression, who were struggling with low prices and overproduction. While the AAA did achieve some success in raising farm incomes, it also faced criticism for destroying crops and livestock at a time when many Americans were suffering from hunger. Moreover, the initial version of the act was later declared unconstitutional by the Supreme Court in 1936.
