How did the New Deal attempted to revive the farm economy during the 1930s?

1 Answer
Mar 23, 2017

The creation of the AAA(Agricultural Adjustment Agency)


The 1934 Agricultural Adjustment Act led to the creation of the Agricultural Adjustment Agency. It was aimed at helping farmers with the issue of deflation. The prices of crops wereindeed decreasing.

It was then defined as such ""The goal of the Agricultural Adjustment Act, restoring farm purchasing power of agricultural commodities or the fair exchange value of a commodity based upon price relative to the prewar 1909-14 level, was to be accomplished through a number of methods.
These included the authorization by the Secretary of Agriculture

(1) to secure voluntary reduction of the acreage in basic crops through agreements with producers and use of direct payments for participation in acreage control programs;

(2) to regulate marketing through voluntary agreements with processors, associations or producers, and other handlers of agricultural commodities or products;

(3) to license processors, association, and others handling agricultural commodities to eliminate unfair practices or charges;

(4) to determine the necessity for and the rate or processing taxes; and

(5) to use the proceeds of taxes and appropriate funds for the cost of adjustment operations, for the expansion of markets, and for the removal or agricultural surpluses."

Source: Rasmussen, Wayne D., Gladys L. Baker, and James S. Ward, "A Short History of Agricultural Adjustment, 1933-75." Economic Research Service, United States Department of Agriculture, Agriculture Information Bulletin No. 391 (March 1976),