AGRICULTURAL MARKETING AGREEMENT ACT 50 Stat. 246 (1937)

In 1933 the first agricultural adjustment act (AAA) developed programs for marketing various commodities. Congress strengthened that act two years later and, in 1937, reenacted many of the AAA provisions and amended others. The Agricultural Marketing Agreement Act stressed regulation of marketing, not of production. Responding to Supreme Court decisions that cast doubt on the marketing agreement provisions of the AAA, Congress now emphasized the separability of those sections. The act authorized the secretary of agriculture to set marketing quotas and price schedules and to sign voluntary agreements with producers. If fifty percent of the handlers and two-thirds of the producers of a commodity approved, the secretary could issue marketing orders. All such agreements were exempted from federal antitrust laws. The AAA's earlier effort to achieve parity prices (a level providing income with buying power equivalent to that for 1909–1914) by balancing production with consumption was now replaced by maintenance of "orderly marketing conditions for agricultural commodities in interstate commerce." In addition, the 1937 act contained a broader definition of interstate and foreign commerce, declaring it to include any part of the "current" that is usual in the handling of a commodity. (See stream of commerce doctrine.) The Supreme Court sustained the act in United States v. Rock Royal Co-operative (1939), finding that even a local transaction was "inextricably mingled with and directly affect[ed]" marketing in interstate commerce. The Court took similar action in wrightwood dairy v. united states (1942), even though that case involved purely intrastate commerce.

David Gordon
(1986)