AAA Part 2: How One Farmer Defined US Commerce
In a previous piece, I covered the history of the Agricultural Adjustment Act of 1933 as a component of the New Deal. This Act was a first step in federal government safety nets, and while it had downsides, it also set the table for broader discussions on how the government and producers could work together to create parity for the ag economy. This program utilized buying acres out of production and purchasing surpluses as the means to tip the scales back into the favor of the producers. It targeted crops that needed additional processing, which was aimed at raising up the entire industry instead of just helping farmers. While it had some success, it failed to address the range of problems faced across the nation in regards to weather and pricing.
This program based direct payments on funds created from levying higher fees to the processors of food products. That Act ended in 1936 when the United States vs Butler ruling deemed that it was illegal to charge processors higher fees to directly pay producers. This ruling also maintained that the federal government had no jurisdiction to enforce agriculture policy at the state level. While it was a setback, it wasn’t the end of the AAA.
The Agricultural Adjustment Act of 1938 remedied some of the issues that came from the initial act. Most of the programs returned, with the caveat that funding would fall on the federal government instead of the processors tax. This act served as a landmark because it was the first to make price support mandatory for corn, wheat, and cotton. This price support insured that a consistent supply during low production times while creating market quotas to balance supply and demand. The new act also added multiple crops to the programs so that more producers were covered.
The most recognizable part of this act was the creation of the Federal Crop Insurance Corporation. While this program is a primary focus of today’s farm legislation, it started as a relatively small part of the AAA and blossomed later on in 1980 legislation that expanded the program and revolutionized it to the form we see today. The 1938 legislation reform came at a crucial time for agriculture. Technology was rapidly advancing, with the South adapting to new techniques and methods that lead to diversifying the scope of agriculture in the region. Many acres that had previously been devoted to cotton, which was dealing with low prices due to large surpluses, were now operating more efficiently or even changing to livestock production.
While the program underwent reform, it was still due for its day in court. Wickard v. Filburn was a case that not only shaped the AAA, but defined commerce as a whole in the United States for decades to come. Roscoe Filburn was an Ohio farmer who raised wheat to feed to his cattle. At this time, the US government had set limits on wheat production as a way to balance supply and demand while keeping a fair price. Filburn raised more wheat than what was permitted, and as a result was fined by the government. Roscoe filed suit, defending his actions by saying that because he was raising it for feed, it would not hit the open market and was therefore exempt from being regulated as commerce. The Supreme Court ruled against him in this case, saying that even though the grain itself was not marketed, it affected market conditions because it held value. Supply and demand were factored into personal usage and this decision was derisive because it expanded a very broad definition of commerce.
This decision was based on the thought that the grain had a value because it replaced grain that could be purchased for feed. The court ruled that while one farmer’s actions didn’t have a significant impact, if many farmers did this it would affect the well-being of other farmer, interstate trade, and ultimately international trade. This controversial decision also had a political aspect to a judicial decision. By the time this decision hit the Supreme Court, 8 out of 9 judges had been appointed by President Franklin D. Roosevelt. The AAA was a project initiated under FDR’s New Deal, so he was very motivated to see it upheld in court.
So, what does all this mean? It’s fascinating that a simple decision by an Ohio farmer to grow extra wheat for his cattle shaped the United States commerce policy in all sectors. They did this via the Commerce Clause in the Constitution which allows for federal interreference to insure interstate trade. Was this and overreach? Honestly, it probably was. This decision came as the US was clawing itself out of the Great Depression and the AAA was helping to reinvigorate the agriculture economy. If the program was found to be unconstitutional a 2nd time, it might have killed the program overall. This case was also heard during war time, so the news was overshadowed in the national news by the Pearl Harbor attack and questions about the US involvement in WW2. It is interesting to think about what federal programs would look like if the courts had shot it down again. Would this failure have killed ag policy in the short term? It is something we will never know but an interesting thought experiment nonetheless.
Outside of agriculture, this landmark decision has shaped public involvement in private business in the decades since. It has allowed the government to find gray areas that allow for interference in matters when they want to. This power was expanded, and potentially abused, in multiple court decisions until 1995 when the United States v. Lopez finally invalidated some of the federal statute and placed bumpers on the unbridled power. This raises another interesting question; in a free country like the United States, where does the governments rights to interfere for the public good outweigh the cost to a private entity or citizen? Is it a simple majority? Does it revolve around physical harm? Emotional or economic harm? Does it operate in a simple majority fashion? Is there a magic percentage? I have a lot of questions but not many answers because the issue is so incredibly broad. I am not the only one asking it, as court cases have been heard everyday for decades that consistently seek to define private rights while balancing the public good. While the decision in court might not be ours, we are free to hold varied opinions on the outcome and have open discussions about how we are building this society. Never underestimate the value of a single person, and while Roscoe Filburn didn’t win, he did have an impact on history. Maybe you can too.
As always, thank you so much for taking the time to read this and if you are interested in the first part of the article please check out this link. https://how-we-grow.org/2026/01/09/agriculture-adjustment-act-the-birth-of-crop-insurance/
