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Agricultural Adjustment Administration (view source)
Revision as of 21:08, February 28, 2011
, 21:08, February 28, 2011→Unconstitutional and 2nd AAA: added Wickard
In the two years of the first AAA’s existence it distributed some $700 million to farmers to restrict production and keep farm prices high.
In the two years of the first AAA’s existence it distributed some $700 million to farmers to restrict production and keep farm prices high.
The first AAA was declared unconstitutional by the Supreme Court in the case United States v. Butler ''et al''. (297 U.S. 1, January 6, 1936) because it gave too much power to the Executive branch. In 1937 Congress then rewrote the law, creating a '''second AAA''' that achieved part of the original Act's goals with the Soil Conservation and Domestic Allotment Act of 1936 until the enactment of a second AAA (P.L. 75-430) on February 16, 1938. This second AAA was funded from general taxation, and therefore acceptable to the Supreme Court. It represented a bipartisan approach, as did the addition of an "ever normal granary" program in 1938. By 1940 Republicans and Democrats were in general agreement on farm policy. During World War II, all restrictions were ended and farmers were encouraged to plant as much as possible. However there was a price cap--100% parity--which angered farmers who saw a bonanza if their prices had been allowed to skyrocket.
The first AAA was declared unconstitutional by the Supreme Court in the case United States v. Butler ''et al''. (297 U.S. 1, January 6, 1936) because it gave too much power to the Executive branch. In 1937 Congress then rewrote the law, creating a '''second AAA''' that achieved part of the original Act's goals with the Soil Conservation and Domestic Allotment Act of 1936 until the enactment of a second AAA (P.L. 75-430) on February 16, 1938. This second AAA was funded from general taxation, and therefore acceptable to the Supreme Court. It represented a bipartisan approach, as did the addition of an "ever normal granary" program in 1938. By 1940 Republicans and Democrats were in general agreement on farm policy. During World War II, all restrictions were ended and farmers were encouraged to plant as much as possible. However there was a price cap--100% parity--which angered farmers who saw a bonanza if their prices had been allowed to skyrocket.
Under the 1938 iteration of the AAA, the government in 1940 ordered an Ohio farmer, Roscoe Filburn, to destroy his crop and pay a large fine to the federal government, as Filburn's wheat output had exceeded his government "allotment." Filburn appealed to the [[Supreme Court]] in the case known as ''[[Wickard v. Filburn]]'', but under threat of Roosevelt's "court packing" scheme, the court buckled, ruling in 1942 that growing crops on one's own land, to feed one's own chickens, was "interstate commerce"—though it was neither "commerce" nor "interstate." Nevertheless, this ruling established that the Interstate Commerce Clause of the Constitution empowered the government to dictate how much an American citizen could produce on his own property, for his own use. Richard Epstein, Laurence A. Tisch Professor of Law at New York University, comments:
{{cquote|Wickard does not pass the laugh test if the issue is whether it bears any fidelity to the original constitutional design. It was put into place for the rather ignoble purpose to make sure that the federally sponsored cartel arrangements for agriculture could be properly administered.<ref>Richard Epstein, "[http://ricochet.com/main-feed/ObamaCare-is-Now-on-the-Ropes ObamaCare Is Now On The Ropes]," Rocochet.com, December 13, 2010</ref>}}
==Impact==
==Impact==
The acreage cutbacks of the first AAA led many farmers to be more efficient in their use of the remaining acres. Except for cotton, where output fell 17%, the total output did not change much. The move to efficiency was a gain, but there was inefficiency as farmers became protective of their allotments and mismanaged their resources to getter larger payments. For example, cotton farmers in the east held on to cotton too long, to protect their allotments and subsidies.<ref> Theodore W. Schultz, ''Agriculture in an Unstable Economy'' (1945) p. 174. </ref>
The acreage cutbacks of the first AAA led many farmers to be more efficient in their use of the remaining acres. Except for cotton, where output fell 17%, the total output did not change much. The move to efficiency was a gain, but there was inefficiency as farmers became protective of their allotments and mismanaged their resources to getter larger payments. For example, cotton farmers in the east held on to cotton too long, to protect their allotments and subsidies.<ref> Theodore W. Schultz, ''Agriculture in an Unstable Economy'' (1945) p. 174. </ref>