The Agricultural Adjustment Act (AAA), signed by President Franklin D. Roosevelt on 12 May 1933, was a cornerstone of the early New Deal designed to combat the agricultural depression that had collapsed commodity prices throughout the 1920s and intensified after 1929. Its statutory premise, drafted largely by Secretary of Agriculture Henry A. Wallace and economist M.L. Wilson, was that chronic overproduction depressed farm income; the remedy was to restore "parity"—the purchasing power of farm goods relative to the favorable 1909–1914 base period. The Act created the Agricultural Adjustment Administration to administer the program and was funded by a processing tax levied on millers, packers, and other first-stage processors of seven "basic commodities": wheat, cotton, corn, hogs, rice, tobacco, and milk.
The mechanism was deliberately one of scarcity. The AAA paid farmers benefit payments in exchange for voluntarily reducing acreage planted and herd sizes, contracting supply to lift prices toward parity. Because the 1933 crop was already in the ground when the Act passed, the administration ordered the plow-up of roughly ten million acres of cotton and the slaughter of some six million young pigs—a politically jarring spectacle of destroying food amid widespread hunger, which Wallace defended as a necessary corrective to a broken market. The voluntary domestic allotment plan, processing taxes, and benefit payments together formed a closed fiscal loop in which consumers and processors effectively subsidized supply restriction.
The original AAA was struck down by the Supreme Court in United States v. Butler (1936) in a 6–3 decision authored by Justice Owen Roberts, which held that the processing tax and the production-control scheme invaded powers reserved to the states under the Tenth Amendment and exceeded the federal taxing-and-spending power—an early judicial rebuke of New Deal regulation. Congress responded with the Soil Conservation and Domestic Allotment Act of 1936, which recast acreage reduction as conservation, and then the second Agricultural Adjustment Act of 1938, which restored price supports, marketing quotas, and the "ever-normal granary," and survived constitutional challenge in Wickard v. Filburn (1942)—a landmark expansion of the Commerce Clause that upheld federal regulation of wheat grown for on-farm consumption.
For the FSOT US History section, the AAA is a high-yield topic illustrating three examinable themes: the New Deal's "relief, recovery, reform" framework and its experimental, sometimes contradictory economics; the constitutional clash between Roosevelt and the Hughes Court that culminated in the 1937 court-packing plan and the "switch in time"; and the enduring architecture of American farm policy, since modern commodity supports, marketing orders, and conservation payments trace directly to the 1933 and 1938 statutes. Typical question angles ask candidates to identify Butler as the case voiding the first AAA, to distinguish the AAA from the NIRA (the parallel industrial program struck down in Schechter Poultry, 1935), and to connect Wickard v. Filburn to the broader doctrine of expansive federal commerce power.
Example
In 1933 the Agricultural Adjustment Administration under Henry A. Wallace ordered the slaughter of roughly six million young pigs and the plow-up of ten million acres of cotton to raise prices toward parity.
Frequently asked questions
United States v. Butler (1936) invalidated the original AAA in a 6–3 ruling by Justice Owen Roberts. The Court held that the processing tax funding production control was unconstitutional because it regulated agriculture, a matter reserved to the states under the Tenth Amendment, and exceeded the federal taxing-and-spending power.