TeachMeFinance.com - explain Agricultural Adjustment Act of 1938
Agricultural Adjustment Act of 1938 The term 'Agricultural Adjustment Act of 1938' as it applies to the area of agriculture can be defined as 'P.L. 75-430 (February 16, 1938) was enacted as an alternative and replacement for the farm subsidy policies found unworkable in the AAA legislation of 1933. The 1938 Act was the first to make price support mandatory for corn, cotton, and wheat to help maintain a sufficient supply in low production periods along with marketing quotas to keep supply in line with market demand. It established permissive supports for butter, dates, figs, hops, turpentine, rosin, pecans, prunes, raisins, barley, rye, grain sorghum, wool, winter cover-crop seeds, mohair, peanuts, and tobacco for the 1938-40 period. Also, Title V of the Act established the Federal Crop Insurance Corporation. The 1938 Act is considered part of permanent legislation for commodity programs and farm income support (along with the Commodity Credit Corporation Charter Act and the Agricultural Act of 1949). Provisions of this law are often superseded by more current legislation (such as the FAIR Act of 1996). However, if the current legislation expires and new legislation is not enacted, the law reverts back to the permanent provisions of the 1938 Act'.
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