The Agricultural Adjustment Act was a 1933 New Deal law that paid American farmers to grow less, deliberately shrinking the supply of major crops and livestock to pull prices back up from Depression-era lows. President Franklin D. Roosevelt signed it on May 12, 1933. It was the first time the federal government directly managed what U.S. farms produced and how much. The Supreme Court struck it down in 1936, but Congress rebuilt its core in 1938, and that replacement still anchors American farm policy today.
Why Congress Passed It
Farm trouble predated the 1929 crash. During World War I, European demand pushed American farmers to borrow, expand, and plant more. When European agriculture recovered, the overseas market shrank and U.S. farmers were left with surpluses and heavy debt. Cotton had peaked near 35 cents a pound in 1919; by 1931 it was around 6 cents.1U.S. Census Bureau. Historical Statistics of the United States, Colonial Times to 1957 – Chapter E
The Depression compounded the collapse. Gross farm income fell from about $12 billion in 1929 to roughly $5 billion by 1932.2Federal Reserve Bank of St. Louis (FRASER). National Income, 1929-1932 Farmers lost land to foreclosure, rural banks failed, and food rotted in fields while city families went hungry, because prices were too low to justify the cost of harvesting and shipping it. That was the crisis Roosevelt and Congress moved to address in the administration’s first weeks.
How the Law Worked
Congress declared a national economic emergency in agriculture. The law’s aim was to restore “parity” for farmers, meaning a bushel of wheat or a bale of cotton should buy roughly what it did in 1909 to 1914, the last stretch widely considered genuinely prosperous for American farming.3National Agricultural Law Center. Agricultural Adjustment Act of 1933
The method was simple in theory. The Department of Agriculture signed voluntary contracts with farmers, who agreed to plant fewer acres or raise fewer animals in exchange for cash payments. The law covered seven “basic commodities”: cotton, wheat, corn, tobacco, rice, hogs, and dairy products.
The payments were funded by a processing tax, a levy on the companies that turned raw farm output into finished goods. Millers paid the tax on wheat ground into flour, meatpackers on hogs slaughtered, cotton ginners on bales processed. The program was designed to fund itself rather than draw on general revenue.3National Agricultural Law Center. Agricultural Adjustment Act of 1933
Plowing Under Crops and Slaughtering Piglets
The law’s most contentious step was not future acreage reduction but emergency destruction of what was already growing. By May 1933, cotton had been planted across the South. The government ordered roughly 10.4 million acres plowed under. The hog program was more explosive still: about 6.4 million young pigs and pregnant sows were slaughtered at a cost of $31 million.4Federal Reserve Bank of Minneapolis. The Porcine Slaughter of the Innocents
The optics were terrible. More than a third of American households had someone out of work, and hunger was widespread. Killing piglets to lift pork prices while families lined up at soup kitchens struck many people as indefensible. The administration argued that the surplus itself was the problem: overproduction had driven prices so low that farming was unprofitable for almost everyone, which meant more farm failures and less purchasing power across the economy. The image of deliberate destruction during scarcity still became a lasting symbol of New Deal overreach for the program’s critics.4Federal Reserve Bank of Minneapolis. The Porcine Slaughter of the Innocents
Who Got Left Out
The AAA was built for landowners. Sharecroppers, tenant farmers, and farmworkers occupied a different position, and the program often made their situation worse. When a landowner took acreage out of production, that landowner needed fewer hands. Mass eviction followed. One contemporary account described farm owners as having “simply turned off surplus tenants, who thus exchanged a previous miserable subsistence for future starvation or government relief.”
Even tenants who kept their place on the land often never saw their share of the payments. Contracts required landlords to pass along a portion of benefit money to tenants and sharecroppers. In practice, many landlords kept the cash or credited it against alleged debts, and enforcement was almost nonexistent. In counties where AAA payments rose, relief rolls often rose with them.
The racial dimension was severe. Black farmers in the South were disproportionately sharecroppers and tenants rather than owners, so they absorbed the evictions while receiving few of the benefits. The USDA later acknowledged that reduced cotton acreage displaced many Black and white tenants alike, and that landlords routinely withheld the payment shares that belonged to sharecroppers. Commodity price supports also pushed farmland values up by an estimated 15 to 20 percent nationally, making it harder for landless farmers, many of them Black, to ever buy farms of their own.5USDA Rural Development. Black Farmers in America, 1865-2000
Displaced sharecroppers in Arkansas founded the Southern Tenant Farmers’ Union in 1934, demanding that the federal government enforce the payment provisions and stop the evictions. The union drew national attention but won only modest reforms during the AAA’s short life.
Did It Actually Raise Farm Prices?
By the narrowest measure, yes. Farm income in 1935 was more than 50 percent higher than in 1932, and AAA rental and benefit payments accounted for about a quarter of the increase in average cash farm income between 1932 and the 1933–1935 period.6USDA Economic Research Service. History of Agricultural Price-Support and Adjustment Programs Commodity prices climbed, and the cycle of deepening surpluses slowed.
The picture is more complicated than those numbers suggest. The 1934 drought did much of the supply-reduction work involuntarily, making it hard to separate the program’s effect from nature’s. Benefits flowed overwhelmingly to larger landowners. And the processing tax raised costs for food manufacturers, which they passed on to consumers, so city dwellers paid higher grocery prices during a depression. Whether the AAA counts as good policy depends heavily on which Americans you ask.
The Supreme Court Strikes It Down
On January 6, 1936, the Supreme Court ruled 6–3 in United States v. Butler that the law was unconstitutional.7Justia U.S. Supreme Court Center. United States v. Butler, 297 US 1 (1936)
The majority targeted the processing tax. Congress has broad power to tax and spend for the general welfare, the Court said, but this tax was not really a tax. It was a tool for regulating agricultural production, and regulating what farmers grew was a power the Constitution reserved to the states under the Tenth Amendment. The tax, the collection, and the payments to farmers were all “parts of the plan — the means to an unconstitutional end.”7Justia U.S. Supreme Court Center. United States v. Butler, 297 US 1 (1936)
What Replaced It, and Why It Still Matters
Within weeks of Butler, Roosevelt signed the Soil Conservation and Domestic Allotment Act of 1936. That law reframed the payments: instead of paying farmers to cut specific crops, the government paid them to adopt soil-conserving practices like cover cropping, field rotation, and retiring eroded land. Roosevelt called it “an attempt to develop, out of the far-reaching and partly emergency efforts under the Agricultural Adjustment Act, a long-time program for American agriculture.”8The American Presidency Project. Statement on Signing the Soil Conservation and Domestic Allotment Act
The 1936 law was a bridge. On February 16, 1938, Congress passed the Agricultural Adjustment Act of 1938, which revived the original tools (acreage allotments, marketing quotas, price supports, and government commodity loans) but dropped the processing tax that had doomed its predecessor. Payments would come from direct treasury appropriations instead.9Office of the Law Revision Counsel. 7 USC Ch 35 – Agricultural Adjustment Act of 1938
The 1938 Act is still the foundation. Its provisions for parity pricing, marketing quotas, and commodity loans remain in Title 7 of the U.S. Code. Modern farm bills, passed roughly every five years, do not replace the 1938 Act so much as temporarily override parts of it. When a farm bill expires without a replacement, the 1938 provisions snap back into effect, a scenario that has periodically threatened to reset dairy and grain programs to decades-old formulas and drive up consumer food prices.9Office of the Law Revision Counsel. 7 USC Ch 35 – Agricultural Adjustment Act of 1938
The original AAA’s legacy is mixed. It established the principle that the federal government has a role in stabilizing farm markets and supporting farm income, and every administration since has kept some version of that role. It also showed the risk of routing economic relief through existing power structures: landowners prospered, the people who actually worked the soil were displaced, and civil rights advocates and agricultural reformers have been fighting that pattern in every farm bill since.