The AAA of 1938 



^ PROGRAM for .i_i;rK iiluiri. 

 .J -l' (o put tlie farmer on an 

 r^^ / even lootint; with orc.inizcJ 

 and protattii industry, and ortr.ini/cd 

 labor with their artiticially liitrh prifc and 

 wayt struitiircs. 



This fiindainentally is the purpose of 

 the Agricultural Adjustment Act of 19vs 

 which passed the House I'cbruary 10 

 (2(i\ to M'>) and went through the 

 Senate I'eliruary I I by a vote of ^(^ to ^1 

 The aa is now m effect. 



The purpose clause of the Ail says: 



"// /t hirth\ Jt^l.iri'J In be iht ptil- 

 it) (ij ('.oii[>rt\< In innliiiiie :he Soil 

 ('nintit.i!/ni/ .iiiJ Domestic Allnl- 

 »unl All. .!> .iii/eilJeJ. jar ll>f ['iirpnte 

 of ini/\einiiii ii.7l;nit.ii re\nii'i:e^. f>ie- 

 itnliiiii I hi' It. alt Jul me of soil jerlil- 

 il). ui/U of pie\eilhlg. iilMilLviliil'^. 

 a>ij rehnilUiHi^ ihe j.inii mhI iMich 

 liinJ resotireei in the iiMiniidl piililu 

 hilertsi : in .iitni>ipli\h these purposes 

 through the eil(oin\t<^eiileiit of \n/l- 

 h////J/i/fi jiij ioil-cniiseit i)ig crnp\ ami 

 praethes.: to assist in the martetini^ 

 oj ai^riitilliiral iniiniinJitie\ for Jo 

 niestic (oiisuiiiplinn and for expnrt: 

 and 10 ret^nlale interstate and foreii^n 

 cnriinierce in cotton, ifhe.it. emu, in- 

 h.iiin. and nci- In the extent necestary 

 to pmi/de an nrderl), adetjuate. and 

 balanced floii nf utch cnmniodilies in 

 interstate and j o r e l t; n cnnnnerct 

 through storage of leserte supplies, 

 loans, marketing (juntas, atusting 

 fanners to obtain. in\o\.ir as piac 

 ticable. p.ir/l) prices for such com- 

 modifies and parity oj income, and 

 assisting cnnuimers In obtain ,ui '.de 

 tjtiate and tte.tdy uippi) nf i.'/i A ,oii/ 

 modifies a! fair prices." 



Three Point Program 



Stripped of its confusing details the 

 long-awaited pro>;ram provides: (1) a 

 moditied soil conservation program: (2) 

 commodity loans which automatically go 

 into effect when pri(es fall; and (3) sur- 

 plus crop storage on the farm when sur- 

 pluses threaten to smash fair price levels. 



There will be no contract to sign in 

 this program. 



You either comply, which means you 

 operate your farm according to generallv 

 accepted principles of soil conservation 

 and good farm practice and receive the 

 full benefits of the program, or vou don't 

 comply antl receive lesser benefits. Com- 

 pliance, and compliance alone, is the 

 basis for loans at the full specified rates 

 and for so called parity payments. 



As stated bv President I-arl C .Smith 



who was in Washington when the meas- 

 ure passed the House, "the bill gives 

 ilerinite assurance to farmers of the corn 

 belt. that, determined by the extent of 

 their cooperation, the price of corn can 

 and will be stabilized at reasonable levels. 

 'To accomplish this, the bill definitely 

 sets forth that each county in the com- 

 mercial corn area is to receive an alloca- 

 tion of corn acreage in such proportion 

 as the average acrcMge planted to corn in 

 the previous ten years bears to the total 

 acreage planted to corn in the commercial 

 area. 



Hach Farm Gets Base 



'Eath farm is to receive an allocation 

 ol corn icrci^c in such proportion as the 

 tillable acres on the farm bear to the total 

 tillable acres in the county. Tliis is to 

 be modified only by tyf)C of soil, topog- 

 raphy and crop rotation practice. 



Cooperating farmers are assured of a 

 loan on corn which varies with the total 

 annual production. I'or example, if the 

 total bushelage of corn produced in 1938 

 does not exceed the normal requirement 

 for domestic use and export, which at 

 present is approximately 2.100.000.000 

 bu., and the price of corn on Nov. 15 

 is below 75 per cent of parity, a loan of 

 7 5 per cent of parity automatically would 

 be in effect. 



On Ihe other hand, if the total crop 

 exceeds r.crmal by not more than 10 per 

 cent, a li<a:i if 70 per cent of the parity 

 price would become effective. As the 

 supply rises, the amount of the loan is 

 correspondingly reduced. Should the an- 

 nual production of corn, including carry- 

 over, exceed 2,7 50,000,000 bu., the Sec- 

 retary of Agriculture would immediately 

 call for a referendum of corn growers in 

 the commercial area, and unless opposed 

 by one-third of the producers, marketing 

 quotas would become operative 



"The bill (AAA of 1938) which the Pres- 

 ^ ident signed is not perfect. Legislation 

 never is ... . nevertheless. I wrould say it 

 is the most constructive farm legislation 

 which Congress has ever adopted. It has 

 in it more of long time benefit to both 

 farmers and consumers than any previous 

 farm legislation. Amendments will be 

 needed especially with respect to cotton 

 and wheal, but on the whole, I am very 

 happy that Congress alter nearly a year 

 should have given the farmers of the Na- 

 tion this new charter to order their efforts 

 in the interest of themselves and the 

 general welfare." 



Secretary of Agriculture 

 Henry A. Wallace in Radio 

 Address Feb. 17. 



■ The effect of this provision would be 

 to require e.ich corn producer (whether a 

 cooperator or non cooperator) to hold on 

 his farm his just percentage of the ex- 

 cess supply only. Loans would be in 

 effect to non-cooperators on the b.nsis of 

 60 per cent of the amount available to 

 cooperators. 



"In addition to the definite schedule 

 of loans, a provision in the bill makes 

 definite allocation of the total appropria- 

 tion for administration of the program. 

 to the five basic commodities mentioned 

 in the bill, namely, corn, wheat, cotton, 

 tobacco and rice. 1"he amount allotted 

 to corn is approximately equivalent to 

 nine cents a bushel on the normal pro 

 duction of the norm.il .icrcage of corn 

 in the corn belt. 



"If the new bill were in operation to- 

 day, and the annual production and carry- 

 over of corn were approximately normal. 

 a loan schedule of 63 cents a bushel 

 would be in effect. In addition, a co- 

 operating farmer would get a payment of 

 approximately nine cents a bushel on the 

 normal production of his allotted acreage. 



Corn Price Minimum 72c 



"It is believed that this law will permit 

 a program whereby cooperating farmers 

 under the conditions mentioned, would 

 be assured of a minimum of 72 cents a 

 bushel for corn. Soil building practices 

 are to be rewarded as heretofore. 



"Tlie provision covering wheat will 

 operate similarly to that governing corn 

 except that the loan schedule is more 

 general in character, varying from 52 to 

 75 per cent of parity as determined by 

 the Secretary of Agriculure when ap- 

 proved by the President. 



"While several provisions of the Act 

 are unsatisfactory and will undoubtedly 

 require amendment, taken as a whole I 

 believe the measure will insure a sub- 

 stantial improvement over the present 

 soil conservation program, will constitute 

 the basis for a sound, permanent nation- 

 al program, and is worthy of the active 

 support and cooperation of farmers.'" 



The bill favors the small farmer as 

 against the big farmer. Soil conservation 

 payments are to be increased on small 

 farms from 10 to 40 per cent, and be- 

 ginning with the calendar year 1939 no 

 soil conservation payment for any year to 

 any person shall exceed $10,000. 



The allotment of available funds 

 among the five basic commodities is left 

 to the Secretary of Agriculture with in 

 structions to take into consideration the 

 (Continued on p.iRe 6) 



I. A. A. RECORD 



