Final answer:
The U.S. government paid farmers to decrease production as part of the Agricultural Adjustment Act in an effort to raise low commodity prices by reducing surplus supplies. The act provided subsidies to farmers for leaving land fallow and reducing livestock numbers, with the plan ultimately funded by a tax on food processing plants.
Step-by-step explanation:
As part of the Agricultural Adjustment Act (AAA), the U.S. government initiated a program to decrease production of agricultural products. The intent behind this policy was to tackle the persistent issue of low commodity prices that had been afflicting farmers since World War I. The AAA was designed to reduce the surplus supply of agricultural commodities, thereby increasing their prices and in turn, supporting affected farmers. To achieve this, the government provided subsidies to farmers for not planting on certain acres and recommended the slaughtering of various livestock to prevent the overproduction that was keeping prices low.
This program was especially beneficial for farmers across the United States, including those in regions such as the Great Plains and the South, where agricultural challenges varied from drought to bumper crops and low prices. Offered through direct relief payments, the AAA specifically helped southern farmers reduce their production of crops like wheat, cotton, corn, hogs, tobacco, rice, and milk. Farmers received monetary payments, such as thirty cents per bushel for corn they did not grow, and five dollars per head for hogs not raised. These funds came from a tax on processing plants that ultimately translated into marginally higher consumer prices.
The Agricultural Adjustment Act was passed into law on May 12, 1933, and marked a significant shift in federal agricultural policy. Its groundbreaking approach of paying farmers not to produce certain commodities was a radical attempt to address the cyclical problems of overproduction and to stabilize commodity prices.