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Entry by Chris Dobbs, New Georgia Encyclopedia, 01/29/2016
Franklin D. Roosevelt's New Deal. The law offered farmers subsidies in exchange for limiting their production of certain crops. The subsidies were meant to limit overproduction so that crop prices could increase.
Last edited by NGE Staff on 12/14/2020
The Agricultural Adjustment Act (AAA) was a federal law passed in 1933 as part of U.S. president
After the U.S. Supreme Court struck down the AAA in January 1936, a slightly modified version of the law was passed in 1938. The program was largely successful at raising crop prices, though it had the unintended consequence of inordinately favoring large landowners over sharecroppers.
Declining Crop Prices
Great Depression hit Georgia especially hard, but trouble began for the state's economy even before the stock market crash of 1929. Many states enjoyed a manufacturing and production boom throughout the 1920s, spurred by an increase in consumer goods and new access to credit. But one of Georgia’s major industries, textiles, was hamstrung in at least three ways.
First, the boll weevil, introduced to the state in 1915, greatly reduced state cotton yields. Georgia's cotton acreage declined from 5.2 million acres in 1914 to 2.6 million in 1923. Second, overproduction in other parts of the country and foreign competition increased the supply of cotton and decreased the price. Between 1918 and 1928, the national price of cotton decreased from 28.8 cents/pound to 17.98 cents/pound. The price of cotton bottomed out in 1931, at 5.66 cents/pound. Finally, new fashions, such as the flapper dress, which used less fabric as well as new man-made materials, including rayon, decreased demand for cotton. These factors combined to push many small family farmers off their land. Many either moved into cities or became sharecroppers.
In addition to the state's economic challenges, Georgia's soil was in poor health. The state’s decades-long dependence on cash-crop agriculture encouraged famers to plant every available acre with cotton, which eventually depleted the soil and led to erosion. By the beginning of the Great Depression, Georgia's cotton, farmers, and land were all in a poor state.
Results of the AAA
First, the boll weevil, introduced to the state in 1915, greatly reduced state cotton yields. Georgia's cotton acreage declined from 5.2 million acres in 1914 to 2.6 million in 1923. Second, overproduction in other parts of the country and foreign competition increased the supply of cotton and decreased the price. Between 1918 and 1928, the national price of cotton decreased from 28.8 cents/pound to 17.98 cents/pound. The price of cotton bottomed out in 1931, at 5.66 cents/pound. Finally, new fashions, such as the flapper dress, which used less fabric as well as new man-made materials, including rayon, decreased demand for cotton. These factors combined to push many small family farmers off their land. Many either moved into cities or became sharecroppers.
In addition to the state's economic challenges, Georgia's soil was in poor health. The state’s decades-long dependence on cash-crop agriculture encouraged famers to plant every available acre with cotton, which eventually depleted the soil and led to erosion. By the beginning of the Great Depression, Georgia's cotton, farmers, and land were all in a poor state.
Results of the AAA
Roosevelt, familiar with Georgia's economy through his frequent visits to Warm Springs, proposed the AAA within his first 100 days of office. The act passed both houses of Congress in 1933 with the unanimous support of Georgia senators and representatives. In essence, the law asked farmers to plant only a limited number of crops. If the farmers agreed, then they would receive a federal subsidy. The subsidies were paid for by a tax on the companies that processed the crops. By limiting the supply of target crops—specifically, corn, cotton, milk, peanuts, rice, tobacco, and wheat—the government hoped to increase crop prices and keep farmers financially afloat.
Please go to New Georgia Encyclopedia to read more.
Please go to New Georgia Encyclopedia to read more.
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