Adjusting Livestock Production
In an effort to reduce hog numbers, payments were also distributed to farmers who would destroy their piglets and pregnant sows. About 6 million piglets were slaughtered under the Agricultural Adjustment Act (AAA).
A cattle-purchasing program was similarly implemented under the Drought Relief Service in areas where the Dust Bowl had hit the hardest. The federal government purchased approximately 7 million cattle, most which had been in imminent danger of starvation.
At first, surplus livestock was typically shot and buried. However, a tremendous public outcry arose over the waste at a time when many people were starving. In October 1933, the Federal Surplus Relief Corporation was established to placate Americans and put the livestock to better use. From then on, most salvageable meat was purchased by the government and distributed through various relief programs. Because many slaughterhouses were not equipped to process the massive numbers of small pigs sent through their doors, however, they often took the easier route of processing young pigs for grease and fertilizer. Meanwhile, enough cattle hides entered the market that newspapers reported a price crisis among tanners.
The Economic Results
Many Great Plains farmers welcomed the subsidies. In some areas, as many as 90% of the local farmers came to rely on the AAA. By the end of 1935, the AAA had shelled out about $1.1 billion, about half of which went to farmers in the Great Plains. According to the USDA, farm income increased by 50% between 1932 and 1935, 25% of the increase coming from federal payments.
Commodity prices did indeed rise between 1932 and 1935. In fact, the prices for corn, wheat, and cotton doubled. However, prices remained well below 1929 levels and the parity goal set by the New Deal. Of course, higher prices only benefited farmers who had crops to harvest in spite of the drought.
The AAA payments were rarely enough to help small-scale farmers subsist. Families with small acreages generally failed, abandoned their farms, and left agricultural to the major players. An estimated 2.5 million people had evacuated the Great Plains by 1940. A large number of these former farmers moved to California to seek jobs picking seasonal produce for low wages.
The situation was particularly bad for tenant farmers. While tenant farmers were not as conspicuous in the Great Plains as in the South, they did exist, and they, too, suffered. Under the initial provisions of the AAA, the landowner was to share the money with any tenant farmers he had working for him. Unfortunately, this part of the contract was poorly enforced, and some landlords resorted to fraud to keep the money for themselves. More honest landlords often used their rightful share of the subsidy to purchase modern machinery to reduce their labor needs, setting their tenant farmers adrift. In Oklahoma alone, the number of tenant farmers was nearly cut in half between 1935 and 1945.
The end result was a decided trend toward the consolidation of agriculture. Farm numbers declined in droughty areas, while farm sizes increased. In southwestern Kansas, for instance, the average farm had more than doubled in acreage by 1950.
A New Act
In the 1936 case United States v. Butler, the Supreme Court declared the Agricultural Adjustment Act to be unconstitutional:
The act invades the reserved rights of the states. It is a statutory plan to regulate and control agricultural production, a matter beyond the powers delegated to the federal government.…
From the accepted doctrine that the United States is a government of delegated powers, it follows that those not expressly granted, or reasonably to be implied from such as are conferred, are reserved to the states, or to the people. To forestall any suggestion to the contrary, the Tenth Amendment was adopted. The same proposition, otherwise stated, is that powers not granted are prohibited. None to regulate agricultural production is given, and therefore legislation by Congress for that purpose is forbidden.…
The Congress cannot invade state jurisdiction to compel individual action; no more can it purchase such action.
However, the AAA was replaced by a new farm relief act. This act did not overtly pay farmers to reduce agricultural production, but instead set up a soil conservation program. Landowners were now paid to implement cover-cropping and similar practices. The money came out of the federal treasury, instead of the tax on food processing. The new program was popular while the drought continued, but most farmers resumed their former cropping practices as soon as the rainfall returned.
But the original AAA had left a lasting legacy. By 1940, 6 million farmers were receiving subsidies. Farm commodities have been subsidized ever since.