The animals were working tirelessly on the farm. Any animal who skipped out on the "voluntary" Sunday afternoon work had his food rations reduced to half. The animals also worked on the windmill.
The farm began experiencing shortages on certain things that the animals could not produce. To solve this problem, Napoleon decided to break a rule and begin trading with neighboring farms. They gave what they wished to trade to Mr. Whymper, who was Animal Farm's connection to the outside world.
The pigs begin sleeping in the farmhouse, in beds, violating two previous resolutions. The other animals were assured that no such rules existed and that the pigs were only there because they needed a quiet space to work, being the brains of the farm.
By autumn the food supply is low and the animals are tired, but the windmill is half built, so the animals are happy. One night there is a harsh storm and the animals wake up to find the windmill in ruins.
The animals are distraught about all their hard work going to waste. Napoleon approaches what once was the windmill and declares that Snowball is the culprit, effectively turning the farm on him. He tells the animals that anyone who finds Snowball will be rewarded with apples and "Animal Hero, Second Class".
After this declaration, the animals immediately begin to plot how to capture Snowball. Napoleon tells the animals that although they have been betrayed by Snowball, they should not let this get in the way of their plans and that they need to begin rebuilding.