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The law offered farmers subsidies in exchange for limiting their production of certain crops. It also sets up basic concepts of production control and price supports which would be used for more than 60 years.
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U.S. president Franklin D. Roosevelt passed The Agricultural Adjustment Act (AAA) in 1933 as part of the New Deal.
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This Act added target prices, and loan rates that provided a price floor.
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Farmers received deficiency payments to make up the difference between the price farmers received and the target level set by the law.
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The original FOR was a loan program
designed to hold production out of
commodity markets during times of low
prices while still leaving the production
under producer control. The program
began in 1977 and was terminated in
1996 with the passage of the Federal
Agriculture Improvement and Reform
(FAIR) Act. -
The policy objectives of the
FOR were to assure that stocks of grain would
be available in times of low
production, and reduce grain price variability.
