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The Agricultural Adjustment Act,1938 (“Act”) is a federal legislation in the U.S. This Act came into existence as an alternative for the farm subsidy policies. The Act facilitated in making price support compulsory for corn, cotton and wheat. The Act helps in maintaining self sufficient supply during low production periods. The Act also helps the farmers by reducing the production of staple crops and encouraging more diversified farming. Th Act a facilitates in making loans to farmers to purchase and store crops in order to maintain farm prices.7 USCS § 1282 states the following purposes of the Act:
1.To conserve national resources, by preventing the wasteful use of soil fertility, and of preserving, maintaining, and rebuilding the farm and ranch land resources in the national public interest;
2.To accomplish the above purposes through the encouragement of soil-building and soil-conserving crops and practices; 3.To assist in the marketing of agricultural commodities for domestic consumption and for export; and<4.>To regulate interstate and foreign commerce in cotton, wheat, corn, and rice to the extent which is necessary to provide an orderly, adequate, and balanced flow of such commodities in interstate and foreign commerce
5. To assist consumers to obtain an adequate and steady supply of such commodities at fair prices.