The Agricultural Adjustment Act (AAA) of 1933 was a United States federal law of the New Deal era designed to boost agricultural prices by reducing surpluses. The government bought livestock for slaughter and paid farmers subsidies not to plant on part of their land. The money for these subsidies was generated through an exclusive tax on companies that processed farm products. The Act created a new agency, the Agricultural Adjustment Administration, also called "AAA" (1933–1942), an agency of the U.S. Department of Agriculture, to oversee the distribution of the subsidies. The Agriculture Marketing Act, which established the Federal Farm Board in 1929, was seen as an important precursor to this act. The AAA, along with other New Deal programs, represented the federal government's first substantial effort to address economic welfare in the United States.
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👉 Agricultural Adjustment Administration in the context of New Deal
The New Deal was a series of wide-reaching economic, social, and political reforms enacted by President Franklin D. Roosevelt in the United States between 1933 and 1938, in response to the Great Depression, which had started in 1929. Roosevelt introduced the phrase upon accepting the Democratic Party's presidential nomination in 1932 before winning the election in a landslide over incumbent Herbert Hoover, whose administration was viewed by many as doing too little to help those affected. Roosevelt believed that the depression was caused by inherent market instability and too little demand per the Keynesian model of economics and that massive government intervention was necessary to stabilize and rationalize the economy.
During Roosevelt's first hundred days in office in 1933 until 1935, FDR introduced what historians refer to as the "First New Deal", which focused on the "3 R's": relief for the unemployed and for the poor, recovery of the economy back to normal levels, and reforms of the financial system to prevent a repeat depression. Roosevelt signed the Emergency Banking Act, which authorized the Federal Reserve to insure deposits to restore confidence, and the 1933 Banking Act made this permanent with the Federal Deposit Insurance Corporation (FDIC). Other laws created the National Recovery Administration (NRA), which allowed industries to create "codes of fair competition"; the Securities and Exchange Commission (SEC), which protected investors from abusive stock market practices; and the Agricultural Adjustment Administration (AAA), which raised rural incomes by controlling production. Public works were undertaken in order to find jobs for the unemployed (25 percent of the workforce when Roosevelt took office): the Civilian Conservation Corps (CCC) enlisted young men for manual labor on government land, and the Tennessee Valley Authority (TVA) promoted electricity generation and other forms of economic development in the drainage basin of the Tennessee River.