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UNITED STATES DEPARTMENT OF AGRICULTURE

AGRICULTURAL ADJUSTMENT ADMINISTRATION

AGRICULTURAL
ADJUSTMENT

A REPORT OF ADMINISTRATION OF THE
AGRICULTURAL ADJUSTMENT ACT

MAY 1933 TO FEBRUARY 1934

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1933/34

AGRIC:
REFERENCE

SERVICE

UNITED STATES DEPARTMENT OF AGRICULTURE

AGRICULTURAL ADJUSTMENT ADMINISTRATION

Hon. HENRY A. WALLACE,

Secretary of Agriculture. DEAR MR. SECRETARY: Herewith is transmitted “Agricultural Adjustment”, a report of the first nine months of the effort to adapt American agriculture to changed conditions, in compliance with the mandate of Congress contained in the Agricultural Adjustment Act.

Respectfully,

bedavis.

Administrator, Agricultural Adjustment Act. FEBRUARY 15, 1934.

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FOREWORD.

CHAPTER 1. OBJECTIVES AND MECHANISMS.

I. WHY THE ACT WAS PASSED.

Agriculture's part in depression.-Drastic decline in farm

purchasing power to 50 percent of pre-war.- Loss of export

markets.-Surplus undermining price.—The vicious cycle of

farm price collapse and city unemployment.--How surpluses

cause bread lines.

II. PURPOSES SET FORTH IN THE ACT..

Balancing production with demand.—Parity of farm in-

come.- Protection of consumers.

III. POWERS UNDER THE ACT.

Production control and marketing agreements.

IV. FINANCING THE ADJUSTMENT PROGŘAM.

Processing taxes.

V. FUNCTIONS OF THE PROCESSING TAX.

Protecting the cooperating farmer. A direct contribution to

farm income.

VI. TRANSFER OF POWERS FROM N.R.A.

CHAPTER 2. ORGANIZATION..

The Agricultural Adjustment Administration. Its person-

nel and organization.--Using experience and facilities of the

Department.—Reorganization into more compact form.-

Number of employees.-Assistance of Extension Service.-

Administrative personnel.

CHAPTER 3. COTTON..

I. HISTORICAL AND ECONOMIC REVIEW.

Balance upset by World War.—Expansion of 16,000,000 acres

from 1921 to 1926.-Growth of world production.—Decline in
world consumption of American cotton.-Big drop in domestic
demand.—World carryover trebled.-Farm income falls two

thirds.

II. THE 1933 EMERGENCY PROGRAM.

Necessity for drastic aid.—Acreage chief factor in control

measures. — Dominant position of United States in world cotton
trade.- Decision to reduce production.-The 1933 cotton
plan.-Cash benefits and options.-Incentive to cooperate.-
The sign-up campaign.-Results: 4,400,000-bale and 10,400,-

000-acre reduction.

III. PROCESSING TAXES.

Rise in cotton prices.-Growth in cotton consumption.-Per

capita cost 93 cents.-Farmers' income up over $200,000,000.

IV. HANDLING OF COTTON FOR OPTION CONTRACTS.

V. LOANS ON COTTON AND COTTON OPTIONS..

VI. RESULTS OF 1933 PROGRAM.

Plow-up as higher price factor.- Broad aspects of benefits.

VII. PLANS FOR 1934 AND 1935.

VIII. MARKETING AGREEMENTS AND CODES.

CHAPTER 4. WHEAT.

Voluntary domestic allotment plan applied to wheat.-Five

years of preliminary effort.—The Topeka speech.—Principles

of plan formed heart of Adjustment Act.

I. FROM GRASS TO GRAIN..

Surplus the heart of the wheat problem.—Prices lowest on

record.—Rising world production due to war.-Creditor posi-
tion of United States shortens export demand.- Wheat carry-

over nearly 400,000,000 bushels.
II. MAPPING TÅE ADJUSTMENT PROGRAM.

Conference on wheat plans.— Three-year program decided on.

III. WORLD WHEAT AGREEMENT

IV. EXECUTING THE ADJUSTMENT PROGRAM

Sign-up of 50,000,000 acres, 80 percent of total.-Seven

million acres taken out of wheat.-Benefits of $102,000,000.-

Revising prior estimates.

V. PROCESSING TAX

VI. NORTH PACIFIC MARKETING AGREEMENT.

VII. MARKETING AGREEMENTS AND CODES.

VIII. CURRENT WORLD SITUATION.

CHAPTER 5. TOBACCO...

Six types, many problems.-Sixty percent decline in farm

price.--Big increase in manufacturers' profits.

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