The Agricultural Adjustment Administration adjusts farmers pockets to less full

Posted by | January 6, 2012

Surpluses of the main US farm products had been piling up in storage bins since the early 1920s, and President Roosevelt used the Agricultural Adjustment Administration starting in 1933 to try to limit the output of those products.

If their supply went down, then their prices would go up, enabling many farm families to make a living again. Eight products were to be reduced: corn, hogs, and milk were produced all over the region, tobacco was produced in central Appalachia, and cotton was produced in far southern Appalachia.

FDR and his New Deal programs cartoonCorn and hogs were linked together in a single unified program, and large-scale farmers gained disproportionate benefits from that program. Appalachia received short shrift simply because it had few large-scale farms. In the cases of tobacco and cotton, small-scale farmers usually received equal benefits IF they owned their own farms.

However, sharecroppers and other types of tenants were no longer allowed to grow tobacco or cotton unless their landlords let them, nor did they share in the cash recompense for NOT growing those crops unless their landlords let them. With these last two policies, the AAA-hastened elimination of sharecropping jobs in the region created a northward migration of tenants, sharecroppers, and farm laborers to city slums.

Years later, Rexford Tugwell, who had served as Asst. Secretary of Agriculture under Henry A. Wallace, said of the AAA: “The problems of another generation were created by the policies of 1933, and absolutely nothing was done to avert what was plainly to be a disaster.”

cornstalkParticipation in the ‘corn-hog’ limitation program was voluntary, and most mountain families did not participate. Corn & hogs were the two basic subsistence products of the region, and those two products were the only two AAA reductions administered in tandem: a farmer could only receive money for reducing corn acreage if he also reduced hog numbers, and vice versa.

The compensating payments mailed to farmers who participated in the corn-hog program reimbursed them at the pre-AAA market value of the corn & hogs in question. But the cost to replace them was higher than that. In corn, bumper years in 1932 & 1933 had driven the price of a bushel as low as 18 cents.

But a major drought afflicting the Plains states in 1933-34 drove the price back up to 79 cents a bushel by December 1934, and $1.00/bushel in some parts of eastern KY. So farmers who signed up to sacrifice 20-30 percent of their 1932-33 production were only offered 30 cents a bushel by the AAA for their 1933-34 crop.

As to hogs, the 1934 corn-hog contract specified that hogs raised for home consumption were restricted to the average annual number per farm raised for that purpose in the two base years of 1932-33.

hog suckling pigletsBut industrial cutbacks being caused by the ongoing Depression meant the region’s farms had to produce more as off-the-farm work dried up. The Bureau of Agricultural Economics reported in eastern Kentucky that an almost 30 percent “increase in the number of farms from 1929 to 1934 was brought about largely by change of occupation from mining to farming.

“The same families were involved, but because of less employment in the mines or forests, they did relatively more farming and became classed as farmers in 1934″ Excluding eastern KY, throughout the rest of Appalachia farms went from 5.45 residents per farm on average in 1930 to 5.6 per farm in 1935.

In effect, then, the AAA program hindered small farmers in Appalachia from supporting themselves, driving some onto relief. But AAA’s Washington administrators weren’t interested in the program’s effect on small farmers. “Commercial slaughter is the important item for a corn-hog program,” said AAA’s acting administrator HR Tolley in April 1935. 150,000 fewer ‘small producers’ chose to sign 1935 corn-hog contracts than had signed 1934 corn-hog contracts, but he didn’t seem to care. Paul Salstrom supports this point of view in Appalachia’s Path to Dependency.

“My study of WV leads me to somewhat different and more charitable conclusions about the New Deal,” counters Jerry Bruce Thomas in An Appalachian New Deal.

“The advance of industrial capitalism and destructive agricultural practices wrecked subsistence agriculture well before the Great Depression. New Deal relief payments in WV, often less than half the national average, generally were desperately needed by the recipients. The AAA provided little help to WV’s small farmers, but other New Deal legislation tried to help low-income farmers save their farms.

“Although the New Deal failed to foster a complete recovery for either the nation or WV before WWII, it did much to make the Depression more tolerable and to encourage in the American people a sense of compassion. That it fell short of its goals is not surprising, given the severity of problems it faced, the nature of the Federal system, and the inconsistency and lack of continuity in the New Deal itself.”

A Gallup Poll printed in The Washington Post revealed that a majority of the American public opposed the AAA. This is mostly because of the mass killing of six million pigs in 1933 which was criticized by many people at the time.

Supreme Court Justice Owen Josephus RobertsSupreme Court Justice Owen Josephus Roberts.

The Supreme Court ruled on Jan 6, 1936, in United States v. Butler, that the processing taxes instituted by the AAA were unconstitutional. Justice Owen Josephus Roberts argued:

The act invades the reserved rights of the states. It is a statutory plan to regulate and control agricultural production, a matter beyond the powers delegated to the federal government. The tax, the appropriation of the funds raised, and the direction for their disbursement, are but parts of the plan. They are but means to an unconstitutional end.

Sources: High Mountains Rising, by Richard Alan Straw & Tyler Blethen, University of Illinois Press, 2004
Appalachia’s Path to Dependency, by Paul Salstrom, University Press of Kentucky, 1997
An Appalachian New Deal, by Jerry Bruce Thomas, University Press of Kentucky, 1998
United States v. Butler, 297 U.S. 1 (1936)

Agricultural+Adjustment+Administration sharecroppers corn-hog+limitations appalachia +appalachian+history +appalachia+history

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