Agricultural Adjustment Administration (AAA)

Definition

The AAA was a federal agency created in 1933 as part of the New Deal to reduce agricultural production by paying farmers subsidies not to plant on part of their land and to kill off excess livestock. Its goal was to reduce crop surplus and therefore effectively raise the value of crops.

Analogy

Think of the AAA like a school lunch program that has too many apples. To make sure each apple is valued and doesn't go to waste, the school decides to buy fewer apples or even pays apple suppliers not to deliver so many. This way, there's no surplus, and every apple counts.

Related terms

Subsidy: A sum of money granted by the government or a public body to assist an industry or business so that the price of a commodity or service may remain low or competitive.

New Deal: A series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States between 1933 and 1939.

Surplus: An amount of something left over when requirements have been met; an excess of production or supply over demand.