Friday, September 09, 2011

AAA

No, not Triple A...the Agricultural Adjustment Administration of 1933, or the AAA, dealt with the severe crisis in the farming sector. The AAA received a lot of criticism because of its measures – it paid farmers to plow under fields and kill off livestock, but as you will see, it did what was necessary to try to save the market. [As a note, I was lazy today...this was pulled some one of my US history lectures....]

American farming had been in depression since before 1929, really seeing a decline since the end of the First World War. After the end of the war, overseas markets for American farm produce disappeared as none of those countries had money with which to buy American goods. American farming was mechanizing and thus producing more goods for the world market, a market that wasn’t there now. When the stock market fell, the last market for American farm produce was gone as the people in the cities could no longer afford to buy their produce either. This meant foreclosures and incited the farmers into riots at times. By 1933 the farmers were threatening to strike, which would lead to starvation in all the major cities. In May of 1933, FDR created the AAA to deal with the farm crisis. FDR and his advisors believed that the New Deal hinged directly on the farm bills – the entire plan would fail or succeed based on the success of the farm bills. The goal of the AAA was to raise prices on seven major items: wheat, cotton, corn, hogs, tobacco, rice and milk. Drastic measures had to be undertaken. Cotton was already in the fields by May and the government actually paid farmers to plow under their fields to stop yet more surplus cotton in the market. The AAA took more than 10 million acres out of cultivation, but managed to double the price of cotton by the beginning of 1934. They also had to take drastic measures for hog production, which was already into farrowing season. Farmers were paid to kill baby pigs and pregnant sows. This was heavily criticized, but the AAA felt justified in doing this to save the farmers. In raising the price of pork, they would also raise the price of corn, which was tied to pork, because most of the corn in the US becomes pig feed. The AAA then took all those butchered animals and gave 100,000,000 pounds of pork to FERA (Federal Emergency Relief Administration) to distribute free to the poor. The wheat harvest was expected to be poor, so no wheat was destroyed, but farmers signed on to long term plans to reduce production.

What was the result of this work by the AAA, which was heavily questioned at the time? Crop prices rose fifty-five percent in the first six months and farmers were quickly pacified. Although the image most people have of the AAA is the slaughter of baby bigs and plowing under cotton, this was only done as a last resort and almost all was only in the first year because the act simply was passed too late in the year. Future relief was managed by reducing planting and breeding, not destruction. While the Supreme Court ruled in 1936 that the AAA was unconstitutional, the farm crisis was over, which was why the AAA had been needed at all.

Now to go with this is FDR’s address to the American people on this very topic. Here is some of it:
Therefore, we came to the third plan -- a plan for the adjustment of totals in our major crops, so that from year to year production and consumption would be kept in reasonable balance with each other, to the end that reasonable prices would be paid to farmers for their crops and unwieldy surpluses would not depress our markets and upset the balance.

We are now at the beginning of the third year of carrying out this policy. You know the results thus far attained. You know the present price of cotton, of wheat, of tobacco, of corn, of hogs and of other ham products today. Further comment on the successful partial attainment of our objective up to this time is unnecessary on my part. You know.

I want, for a moment, to emphasize that word "adjustment." It is almost a forgotten word just as some of you, once upon a time, were forgotten men. As you know, a great many of the high and mighty, with special axes to grind, have been deliberately trying to mislead people who know nothing of farming by misrepresenting -- no, why use a pussyfoot word? -- by lying about the kind of farm program under which this Nation is operating today.

A few leading citizens have gone astray from other causes -- such as ignorance. I must admit that. For example, a few years ago in the countryside where I live, I was driving with a prominent city banker. Everything was brown. The leaves were off the trees. And all of a sudden we passed a beautiful green field. He asked me what it was. I told him it was winter wheat. He turned to me and said, "That is very interesting. I have always wondered about winter wheat. What I don't understand is how they are able to cut it when it gets all covered up with snow."

The other example was down in Georgia. An editor of a great metropolitan paper was visiting me down there in the summertime when I showed him my farm with 40 or 50 acres of cotton, when the cotton was nearly grown but before the bolls had formed. Looking out over the cotton fields he said to me:

"What a large number of raspberries they grow down here."

Well, raspberries was right. Because, at four and a half cents a pound for cotton his mistake was, perhaps, a natural one.

I was speaking to you about that word adjustment. I think it is your duty and mine to continue to educate the people of this country to the fact that adjustment means not only adjustment downward but adjustment upward. It you and I agree on a correct figure for a normal carryover in a basic crop, it means that if we have a bumper crop one year we will, by mutual consent, reduce the next year's crop in order to even up that carryover. At the same time, if we get a short crop in a given year, you and I agree to increase the next year's crop to make up the shortage. That is exactly what we are doing in the case of wheat this year.

Yes, it is high time for you and for me to carry, by education, knowledge of the fact that not a single program of the A.A.A. contemplated the destruction of an acre of food crops in the United States, in spite of what you may read or what you may have been told by people who have special axes to grind.

It is high time for you and for me to make clear that we are not plowing under cotton this year -- that we did not plow it under in 1934 and that we only plowed some of it under in 1933 because the Agricultural Adjustment Act was passed by that Congress at that famous Special Session after a huge crop of cotton was already in the ground.

It is high time for us to repeat on every occasion that we have not wastefully destroyed food in any form. It is true that the Relief Administrator has purchased hundreds of thousands of tons of foodstuffs in order to feed the needy and hungry who have been on the relief rolls in every part of the United States.

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