NEW DEAL FARM PROGRAM 



and benefit payments to farmers and the other with marketing agree- 

 ments and licenses. Benefit payments were limited to the producers of the 

 seven basic commodities who voluntarily agreed to adjust their produc- 

 tion. These seven commodities were selected because the United States 

 produced "an exportable surplus in nearly all of them, and also because 

 changes in their price strongly influenced all commodities," and because 

 of the belief that they could be regulated more easily in production and 

 distribution since all of them had to go through some manufacturing 

 process before they were ready for human consumption. Farmers who 

 did not sign benefit contracts were at liberty to produce any commodity 

 in any volume that they chose, but they had to meet their problems with- 

 out direct government aid. 



The other group of powers gave the Secretary the authority to enter 

 into marketing agreements with processors. These agreements, inserted 

 chiefly through the efforts of George Peek, could be entered into for all 

 farm products, not merely the seven specified in the case of the benefit 

 payments, and these agreements were to be exempt from the antitrust laws 

 of the country. The agreement, with this exemption, could regulate trade 

 practices, production quotas, prices, supply areas, and the many relation- 

 ships among various branches of trade. To make effective the terms of 

 marketing agreements, the act authorized the Secretary of Agriculture to 

 grant licenses to processors and distributors and others handling agricul- 

 tural products or any competing commodities and to revoke such licenses 

 in the event of violation of the terms of the licenses. This is the part that 

 George Peek contributed to the act. Funds were to be obtained to make 

 benefit payments by levying a tax on the first processing of the product, 

 the amount of which was to be equivalent to "the difference between the 

 current farm price for the particular commodity and the fair exchange 

 value of the commodity." ' 



Another important phase of the New Deal program was the establish- 

 ment of the Farm Credit Administration, which knit together into one 

 unit nearly all of the federal farm credit agencies. Various funds were to 

 be made available to farmers, the money to be provided by the issuance 



46. The Public Papers and Addresses of Franklin D. Roosevelt, II, 176-79. For 

 data on "Tax Collections and Refunds" for 1933-35, see U. S. Dept. Agri., Agricul- 

 tural Adjustment Administration, Agricultural Adjustment, 1933 to 1935 (Wash- 

 ington, 1936), pp. 291-94; Davis, Wheat and the AAA, pp. 36-37. 



