History and Background - Section 1
The Commodity Credit Corporation Charter Act of 1933
The commodity program began in the early 1930’s as an outgrowth of federal agriculture policies designed to shore up farm prices and help American farmers suffering from the economic upheaval of the Great Depression. Many individual farmers lost their farms, while the total amount of farmland increased. Farmers planted more acreage to try and make up for poor prices – thus further depressing prices by increasing surpluses in a time of falling demand. At the same time, millions of people in the cities lost their jobs and were without means of support for themselves and their families. The danger of malnutrition among children became a national concern.
The paradox of food being plowed under and livestock being destroyed while people went hungry caused the Federal government to act. The Commodity Credit Corporation was established in 1933, primarily to get loans to farmers and help them store non-perishable commodities until prices rose. Farmers were eventually allowed to forfeit their crops to the federal government to repay loans, which in turn forced the government to hold commodities and sell or distribute them to domestic and international food programs and to promote export markets in order to prevent waste and spoilage.