The New Deal years were characterized by a belief that greater regulation would solve many of the country's problems. In 1933, for example, Congress passed the Agricultural Adjustment Act (AAA) to provide economic relief to farmers. The AAA had at its core a plan to raise crop prices by paying farmers a subsidy to compensate for voluntary cutbacks in production. Funds for the payments would be generated by a tax levied on industries that processed crops. By the time the act had become law, however, the growing season was well underway, and the AAA encouraged farmers to plow under their abundant crops. Secretary of Agriculture Henry A. Wallace called this activity a "shocking commentary on our civilization." Nevertheless, through the AAA and the Commodity Credit Corporation, a program which extended loans for crops kept in storage and off the market, output dropped.
Between 1932 and 1935, farm income increased by more than 50 percent, but only partly because of federal programs. During the same years that farmers were being encouraged to take land out of production -- displacing tenants and sharecroppers -- a severe drought hit the Great Plains states, significantly reducing farm production. Violent wind and dust storms ravaged the southern Great Plains in what became known as the "Dust Bowl," throughout the 1930s, but particularly from 1935 to 1938. Crops were destroyed, cars and machinery were ruined, people and animals were harmed. Approximately 800,000 people, often called "Okies," left Arkansas, Texas, Missouri and Oklahoma during the 1930s and 1940s. Most headed farther west to the land of myth and promise, California. The migrants were not only farmers, but also professionals, retailers and others whose livelihoods were connected to the health of the farm communities. California was not the place of their dreams, at least initially. Most migrants ended up competing for seasonal jobs picking crops at extremely low wages.
The government provided aid in the form of the Soil Conservation Service, established in 1935. Farm practices that had damaged the soil had intensified the severity of the storms, and the Service taught farmers measures to reduce erosion. In addition, almost 30,000 kilometers of trees were planted to break the force of winds.
Although the AAA had been mostly successful, it was abandoned in 1936, when the tax on food processors was ruled unconstitutional. Six weeks later Congress passed a more effective farm-relief act, which authorized the government to make payments to farmers who reduced plantings of soil-depleting crops -- thereby achieving crop reduction through soil conservation practices.
By 1940 nearly 6 million farmers were receiving federal subsidies under this program. The new act likewise provided loans on surplus crops, insurance for wheat and a system of planned storage to ensure a stable food supply. Soon, prices of agricultural commodities rose, and economic stability for the farmer began to seem possible.
Source: U.S. Department of State