The Agricultural Adjustment Act and Its Operation

Report Introduction: Agricultural Adjustment Act, approved May 12, 1933, is the means of effectuating the policy of Congress to restore the purchasing power of American farmers to the level which it occupied in the 5-year period immediately preceding the World War, during which period the national income was equitably balanced as between agriculture and other industry. Since the World War agricultural production has not been contracted as effective export and domestic demand for farm goods has contracted; oversupply of agricultural commodities has resulted and has reduced farm prices; and agricultural purchasing power has fallen far below parity with the purchasing power of other industries. The Agricultural Adjustment Act, therefore, in order to remedy these conditions, empowers the President, through the Secretary of Agriculture and the Agricultural Adjustment Administration set up within the Department of Agriculture, to assist farmers in adjusting their production of certain basic commodities to meet effective demand without sacrificing income and to put into effect marketing agreements on agricultural commodities, designed to insure fair prices to producers, efficient and equitable distribution of the products, and protection for consumers of the finished goods.