How it all Began
World War I severely disrupted agriculture in Europe. That was an advantage to farmers in the United States, who increased production dramatically and were therefore able to export surplus food to European countries. But by the 1920s, European agriculture had recovered and American farmers found it more difficult to find export markets for their products. Farmers continued to produce more food than could be consumed, and prices began to fall.
The decline in demand for agricultural products meant that many farmers had difficulty paying the mortgages on their farms. By the 1930s, many American farmers were in serious financialdifficulty.
In South Dakota, the county grain elevators listed corn as minus three cents a bushel — if a farmer wanted to sell them a bushel of corn, he had to bring in three cents. Fields of cotton lay unpicked, because it couldn`t be sold even for the price of picking. Orchards of olive trees hung full of rotting fruit. Oranges were being sold at less than the cost of production. Grain was being burned instead of coal because it was cheaper.
When Franklin D. Roosevelt was inaugurated president in 1933, he called Congress into special session to introduce a record number of legislative proposals under what he dubbed the New Deal. One of the first to be introduced and enacted was the Agricultural Adjustment Act. The intent of the AAA was to restore the purchasing power of American farmers to pre-World War I levels. The money to pay the farmers for cutting back production by about 30 percent was raised by a tax on companies that bought farm products and processed them into food and clothing.
The decline in demand for agricultural products meant that many farmers had difficulty paying the mortgages on their farms. By the 1930s, many American farmers were in serious financialdifficulty.
In South Dakota, the county grain elevators listed corn as minus three cents a bushel — if a farmer wanted to sell them a bushel of corn, he had to bring in three cents. Fields of cotton lay unpicked, because it couldn`t be sold even for the price of picking. Orchards of olive trees hung full of rotting fruit. Oranges were being sold at less than the cost of production. Grain was being burned instead of coal because it was cheaper.
When Franklin D. Roosevelt was inaugurated president in 1933, he called Congress into special session to introduce a record number of legislative proposals under what he dubbed the New Deal. One of the first to be introduced and enacted was the Agricultural Adjustment Act. The intent of the AAA was to restore the purchasing power of American farmers to pre-World War I levels. The money to pay the farmers for cutting back production by about 30 percent was raised by a tax on companies that bought farm products and processed them into food and clothing.