The Agricultural Marketing Agreement Act of 1937 – An Overview

The Agricultural Marketing Agreement Act of 1937 was a significant piece of legislation passed during the Great Depression. The act aimed to promote fair marketing practices and stabilize prices in the agricultural industry by allowing producers to form associations and enter into agreements that would regulate the production and marketing of agricultural commodities.

The act was introduced by Senator Elmer Thomas of Oklahoma and signed into law by President Franklin D. Roosevelt. It was a response to the economic crisis that had engulfed the agricultural sector in the United States during the 1930s. Farmers were facing plummeting prices for their crops due to overproduction and a lack of effective marketing systems.

The Agricultural Marketing Agreement Act sought to remedy this situation by providing the framework for agricultural producers to come together and negotiate with processors and distributors. The act allowed for the formation of marketing associations, which could then enter into agreements with processors and distributors to set prices, production levels, and marketing practices.

The agreements were voluntary, and producers could choose whether or not to participate. However, those who did participate gained a significant advantage in the marketplace. The agreements helped to stabilize prices by ensuring that there was a reliable supply of high-quality agricultural products. They also helped to reduce waste by regulating production levels, which prevented surpluses from flooding the market.

The act was amended in 1946 to include the provision for the establishment of marketing orders. Marketing orders were essentially regulations established by the USDA to govern the marketing of specific crops. The orders set standards for quality, grade, size, and maturity, as well as provisions for inspection and certification. Marketing orders helped to ensure that consumers received high-quality products, while also providing stability and predictability for producers.

The Agricultural Marketing Agreement Act of 1937 was a significant step toward fair and efficient marketing practices in the agricultural sector. It remains an essential piece of legislation today, as it provides the foundation for many of the marketing programs and regulations that govern the industry. Its legacy is reflected in the current marketing order system, which continues to promote fair practices and provide stability for producers and consumers alike.