At the turn of the 20th century, farming and sharecropping played a major role in the American economy.  In fact, from 1909-1914, agriculture experienced a golden age, which witnessed great economic growth.  As the Great Depression swept across the United States, agriculture greatly declined and surplus production caused crop prices to heavily drop.  Under the leadership of Franklin D. Roosevelt, the government aimed to revitalize American agriculture.

On this day, May 12th, in 1933, the Agricultural Adjustment Act was signed.  The act, which was a part of Franklin Roosevelt’s New Deal, aimed to reduce agricultural production in order to raise the value of crops.  Farmers were offered acreage reduction contracts, which would grant them subsidiaries in exchange for eliminating surplus production.  The government was able to grant subsidies to farmers with an exclusive tax on companies that processed farm goods.  The Agricultural Adjustment Act helped to stimulate the agriculture industry, but it is noted that large farmers benefited more heavily than small farmers and sharecroppers.

In 1936, the Agricultural Adjustment Act was ruled unconstitutional in a Supreme Court case.  The power to regulate agriculture was subsequently removed from federal jurisdiction and given to the states.  The Agricultural Adjustment Act of 1938 was created to improve upon the issues created in the original act.