The United States is in the midst of an existential farm crisis. From the wholesale disappearance of the family farm, overproduction, and industrial scale farming to depleted farm land, corporate control of farms, and the unsustainability of the subsidy culture, America\u2019s \u201camber waves of grain\u201d are threatening to become the deadened brown husks of an entire way of life.<\/p>\n\n\n\n
But farming is not the only crisis to come from the failure to practice sustainability and harvest healthy food. An environmental, economic, and human health crisis is approaching the United States unlike the country has ever seen. One of the fattest, sickest nations on earth, our country spends more than any other nation on healthcare. The majority of this spending is aimed at chronic health issues yet the country is becoming fatter and sicker with each passing year. The United States cannot sustain such expenditures.<\/p>\n\n\n\n
In addition, aggressive farming has reduced natural habitat, depleted the soil, and set the United States in motion to face a crisis in which the soil itself is no longer able to render crops at all.<\/p>
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<\/a><\/div><\/div>\n\n\n\nFarming is, by nature, an up and down game, with many variables going into the production of food that can drive both prices and production. Throughout American and, indeed, world history, agriculture has been susceptible to the climate, weather, human action, war, and economic policy. Even bumper crops producing high volumes of extra product can be detrimental by lowering the prices received for them. But, for all history, one thing has remained constant: the fact that human society totally depends on the ability of farmers to produce food. It is quite a simple realization but a powerful one. The death of the farmer is the death of humanity as a whole.<\/p>
In the United States, since the early 1900s, the entire country has experience various farm crises \u2013 some as a result of weather and climate disasters but mostly as a result of governmental policy, i.e. the inability of the U.S. government to ensure that farmers actually have an incentive to produce food.<\/p>
Although a food revolution is admittedly taking place at the grassroots level (an attempt to produce good, clean, non-GMO, natural food at a local and small level), in terms of who provides the average meal to the average American, Big Ag has an undeniable monopoly. Farmers who attempt to survive under the yoke of Big Ag find themselves creating massive profits for the corporate vampires while surviving off government (taxpayer) subsidies. Low \u201cmarket prices\u201d bring in little revenue while high costs have many farmers living in the red, even if they are not concerned with the quality of the food or whether or not it is truly natural. Despite low market prices being fetched by the farmer, consumers are still seeing their food costs rise every year.<\/p>
Clearly, the practice of subsidies is a poor one that is neither sustainable nor desirable. Keeping farmers essentially \u201con the dole\u201d and at subsistence levels cannot continue to be the policy of a First World nation in the 21st Century. But simply eliminating subsidies and allowing agriculture and food to become just another product on the market is even worse, particularly now that the market is controlled by Big Ag and Wall Street.<\/p>\n\n\n\n
Between 1935 and 2014, a period where the U.S. population more than doubled, the amount of farms in existence\u00a0decreased three times over<\/a>. In 1935, there were 6.8 million farms and 127 million Americans (1 farm for every 19 Americans). In 2014, there were fewer than 2.2 million farms for 313 million Americans (just 1 farm for every 142 Americans). In 1935, farming was 21% of the American labor force. In 2014, it was 0.7%.[1]<\/a><\/p> In 1935, the average farm was 154.8 acres but, in 2014, it was 418. The reason for this is simple: as major agricultural companies took over American agriculture, corporate farming became the norm, requiring larger numbers of acres for massive operations. While, in terms of percentage, the biggest farms are smallest in number (as stands to reason), they make up for the majority of the market in terms of sales with 70% of farms not producing a livable income.[2]<\/a><\/p> Wall Street has also compounded the problem by the practice of unregulated \u201ccommodity speculation\u201d or, essentially, betting on the price of food. In short, \u201ccommodity speculation\u201d as it relates to food is the practice of betting on the price of specific foods in the future and locking in the wager early on. Speculation thus\u00a0tends to raise the price of food<\/a>\u00a0every year with the odd moments of lowering prices at times when it seems the worst time possible for farmers for prices to drop.[3]<\/a>\u00a0The latter possibility is incredibly rare, however, and speculation has\u00a0tended to raise<\/a>\u00a0the cost of food every year.[4]<\/a>\u00a0It enriches no one but bankers. Farmers and consumers pay all the cost of production, distribution, and consumption while massive corporations and banks reap the profits.<\/p>\n\n\n\n The answer to all of this is Parity.<\/p>\n\n\n\n Parity<\/strong><\/p> Parity as an agricultural policy has been ignored for so long that most modern-day farmers have no idea what it even is, much less that it was perhaps the most successful policy of its type in modern American history. Indeed, only older farmers or those educated on agricultural policy seem to be even slightly aware of it. This is not by mistake.<\/p> Currently, not only does Big Ag makes millions of dollars in profit and maintain a virtual monopoly on the American food supply, but Wall Street is able to fleece farmers and consumers as well. Big Ag (in concert with Wall Street) has seen millions of family farmers disappear and become replaced with major farming operations that use GMO and hybrid patented technologies and who are beholden to major international agricultural corporations.<\/p> As it stands, food prices are determined by the \u201cmarket,\u201d only they aren\u2019t really determined by the market so much as they are determined by the commodities futures markets. Here, the prices are manipulated up or down by speculators.<\/p> While profits have gone sky high for Wall Street commodities speculators, prices paid to farmers have actually been driven down. So here one can easily see the scam that is the current American agricultural economy \u2013 Big Ag sits off to the side while \u201cfranchise\u201d farmers do most of the work. These farmers oftentimes get paid well below what it costs to actually produce the food. The American taxpayer (the consumer) thus pays subsidies to the farmer via tax money so the farmer can survive. As a result of all this, Wall Street speculators sit back and get fatter while the farmer and the consumer pay more for less return. It\u2019s nice work if you can get it.\u00a0<\/p>\n\n\n\n As the National Family Farm Coalition explains:<\/p>\n\n\n\n Imagine you\u2019re a business owner. You work hard making something people need. You have to sell most of your goods through a middleman, but there are often only one or two buyers. There\u2019s no way to negotiate with just one buyer, so you have to take whatever price is offered. In recent years, the best offer has been about $37,000 for goods that cost you $100,000 to make. Economists in your field tell you if you want to make more money, you must produce more product, but you know that producing more will likely drive prices down even further for you and other business owners.<\/p>\n\n\n\n That\u2019s today\u2019s reality for farmers, ranchers, and fishermen. Is it any wonder they\u2019re struggling \u2014 living on zero income for four years and ever- mounting debt? The agribusiness companies setting their prices tell us that paying farmers their cost of operation means consumers will have to pay more. But one look at the current supply chain shows us that most of the money consumers pay goes straight into the pockets of those very corporations.[5]<\/a><\/p>\n<\/blockquote>\n\n\n\n\n\n\n\n Garrett Graddy-Lovelace goes a bit further in her article, \u201cFair Prices & Farm Justice For Racial Equity & Food System Resilience,\u201d when she writes,<\/p>\n\n\n\n In a neoliberal flurry, the 1996 Farm Bill ended price floors for farmers, meaning there was no longer a minimum price \u2013 or minimum wage \u2013 that farmers could get paid for their products and work. Immediately, median yearly farm income earned by farm households crashed to below zero, where it has stayed for 23 years. The 2018 median farm income earned by farm households \u2013 a key indicator of true agricultural viability \u2013 remained 1,735 dollars below zero (USDA ERS 2020<\/a>). In 2019, for the first time since the fateful \u201896 Farm Bill, this figure rose above zero to 296 dollars \u2013 because of the Market Facilitation Program trade aid checks the USDA wrote to the largest soy producers. In 2020, COVID-19, ad hoc disaster assistance programs and Paycheck Protection Programs pulled median yearly farm-related household income up to 934 dollars. The USDA admits: \u201cThe increase in median farm income in 2019 and 2020 is largely because of increases in government payments to farm operations.\u201d<\/p>\n\n\n\n Meanwhile, the practice of overproduction continues to grow. Throughout 2019, crop surpluses piled higher, festering in climate-induced floods and storms and in tariff battles. Meanwhile, dairy farmer bankruptcies abound, with one third going out of business in the last decade (Dairy Together 2020). These issues have grown starker in recent months amidst the pandemic-caused rapid collapse of the restaurant sector and its wholesale supply chains.<\/p>\n\n\n\n The concentrated nature of US agri-food industry and supply chains leads to bottlenecks, backlogs, and huge food loss when disruptions \u2013 such as the COVID-19 pandemic \u2013 occur. Rather than revamp the systems for decentralized, adaptive, direct, diverse, and localized\/regionalized supply chains, the federal government continues to write big checks to prop the status quo. In 2018 and 2019, billions of dollars in \u2018trade aid\u2019 federal direct payments made their way to the richest producers of the feed grain glut. Concurrently, additional billions in disaster payments flowed to the largest landholders. Then in 2020, USDA pandemic-relief payments sent out another 40 billion dollars \u2013 but again, largely to the largest commodity crop (over)producers. Federal disaster payments in 2020 continue to move disproportionately to the wealthiest and largest farm owners, leaving most small and medium-size operations unsupported and empty-handed.<\/p>\n\n\n\n The largest US farmer organizations (the American Farm Bureau Federation and the major commodity groups) remain stuck on the treadmill of high input agriculture with all of its destructive environmental externalities \u2013 from the hypoxia-eutrophication dead zones of nitrogen fertilizer run-off to the toxic fecal cesspools of Concentrated Animal Feeding Operations, from the pollinator to the songbird die-offs, from the unprecedented levels of topsoil erosion, to the fact that a third of anthropogenic greenhouse gas emissions come from industrial agriculture. These farmer organizations remain committed to exports as the solution to surplus in general, and agrofuels and industrial meat as the solution to grain and soy surplus in particular. From the dominant agricultural economic paradigm, a program of price supports and production quotas seems quaint, if not downright risky; in this view, such a policy shift could cause US farmers to lose market share, and raise prices for US consumers, exacerbating food insecurity.<\/p>\n\n\n\n A tragedy unfolds here. A true agricultural viability crisis grows, even as it grows harder to see. Foreclosures are multiplying, but government responses merely exacerbate disparity and land concentration, obscuring the vicious cycles of overproduction, exploitation (people, animals, and land), as well as political-economic consolidation. This further excludes and locks out the wave of diverse, young people who want to enter agriculture \u2013 to grow nourishing foods for their community, to steward land and water, to make a living farming. Who can afford to jump into this relentless treadmill of overproduction? Who can shoulder these risks and disparities? A recent\u00a0report<\/a>\u00a0by the National Young Farmers Coalition chronicles how the high cost of farmland has prohibited young, beginner, and farmers of color from accessing land to start farming.[6]<\/a><\/p>\n<\/blockquote>\n\n\n\n\n\n\n\n What Is Parity?<\/strong><\/p>\n\n\n\n Parity is essentially a minimum wage for farmers. It guarantees that farmers at least make more than it costs to produce various crops. Despite the fact that the parity system is no longer being implemented, the USDA continues to collect data regarding the costs of production and calculates what would be the fair cost of production for specific crops. The calculation process is rather simple; it basically takes into consideration the costs of production (seed, land, tractor, fuel, etc.) and divides by the number of bushels that can be produced for these costs. That, essentially, is the parity cost.<\/p> Parity pricing is only a few short calculations away. Factoring in the above information along with commodity prices and purchasing power tied to a historical base period, a living wage, inflation, etc. parity pricing is achieved. In other words, a minimum or living wage for farmers is arrived at through these calculations.<\/p>\n\n\n\n The National Agricultural Library (NAL) defines parity as follows: \u201cA level for agricultural commodity prices maintained by governmental support and intended to give farmers the same purchasing power they had during a selected base period.\u201d Purchasing power in terms of agriculture is represented by a ratio between \u201cprices received by farmers\u201d divided by an index of \u201cprices paid by farmers.\u201d The base period of 1910-1914 is used because that is the period agreed upon when most sections of agriculture were doing relatively well.[7]<\/a><\/p>\n\n\n\n As Brad Wilson of Disparity to Parity adds in his article, \u201cWhat Is Parity, When, and Why?\u201d<\/p>\n\n\n\n Parity was defined and implemented as a fixed standard of equality and economic justice. In contrast, NAL\u2019s definition of parity lends itself to economic relativism, a floating standard, and some work by USDA has moved in that direction. The original 1910-1914 base period was chosen, not arbitrarily, but carefully, as a time when farmers had achieved an adequate general equality compared to their costs of production and compared to the rest of the economy.[8]<\/a><\/p>\n<\/blockquote>\n\n\n\n\n\n\n\n Wilson also writes,<\/p>\n\n\n\n Besides being a comparison or equality between different time periods, parity has also generally meant equality between farm and city, and between farmers and other businesses, including the input and output industries that sell to and buy from farmers. This can be seen in the similar returns on equity or assets of farmers and corporations during the parity years, as contrasted with other years.[3]<\/sup><\/a>\u00a0Since parity is defined for a long list of farm products, it is also a comparison between these crop and livestock products at any point in time, and within product categories over time.[9]<\/a><\/p>\n<\/blockquote>\n\n\n\n\n\n\n\n Wilson describes the calculations used to determine parity pricing as follows:<\/p>\n\n\n\n Parity, as \u201cprices received\u201d divided by \u201cprices paid,\u201d is a ratio or percentage, where 100% sets the standard for an adequate, \u201cnormal\u201d level of economic farm justice. So \u201c100% of Parity\u201d is the definition for achieving \u201cparity.\u201d 100% of parity over all is computed for all of agriculture (as operationally defined in how USDA calculates it). In a similar way, a wide range of individual farm prices are computed as parity prices or as a percent of parity, as a percent of the specific \u201cparity price\u201d in dollars and cents, for that crop or livestock product for a given year. Here are some examples for the year 1946. The parity price for wheat was $1.71, the per bushel and average market price was $1.74, or 102% of parity. The parity price of hogs in 1946 was $14.00 per hundredweight, while the market price was $17.30 or 124% of parity. The parity price of fresh snap beans was $2.27 per bushel, while the average market price was $2.40 or 106% of parity. The parity price for processing pears was $77.70 per ton, while the market price was $91.70 or 118% of parity. The overall parity ratio that year was 121%.[10]<\/a><\/p>\n<\/blockquote>\n\n\n\n\n\n\n\n Short History Of Farm Policy<\/strong><\/p>\n\n\n\n Because farming is both volatile and unpredictable (due to environmental, economic, and governmental factors), the United States government has long been forced to intervene in the industry and help set up structures to incentivize or at least protect the farmer. In the past, that structure has come through Farm Bill legislation. As the NFFC writes,<\/p>\n\n\n\n Early farm bills were passed following the Great Depression as part of the New Deal. In the 60 years before that, the prices farmers were paid for their goods had been consistently low. This meant that goods were cheap for buyers \u2014 so grain merchants bought grain cheaply and processed it into products they could sell at a large profit. Meanwhile, farmers were going out of business in droves. To keep farmers on the land and reliably producing food, the first farm bills aimed to stabilize their incomes, by raising the prices that corporations paid for farm goods by 50 percent or more.<\/p>\n\n\n\n Early farm bills raised prices by managing the supply of commodities, allowing a set amount of grain on the market. The system, called supply management, created mechanisms for dealing with a large harvest so that it wouldn\u2019t make farm prices plummet. While it meant that farmers couldn\u2019t plant more and more to make more money, it offered financial incentives for good conservation practices. It also set a floor price, like a minimum wage, guaranteeing that farmers could make a living. The floor price was based on farmers\u2019 costs of production, so there was parity between income and expenses. (The period when this system was in effect is often called \u201cthe parity years.\u201d)[11]<\/a><\/p>\n<\/blockquote>\n\n\n\n\n\n\n\n The Gradual Elimination Of Parity<\/strong><\/p>\n\n\n\n Beginning in the 1950s, Congress steadily reduced the farm floor price and continued to do so in each successive farm bill. In 1996, the entire supply management system was ended for commodity crops such as wheat, corn, and soybeans. In 2014, it was removed for dairy. As a result, Federal policy is not to manage supply but instead to encourage each producer to plant and produce as much as possible. But, as already mentioned, that simply causes the prices to drop. So, the only way out for individual farmers is to produce even more but, again, that just makes the problem worse for everyone and themselves.[12]<\/a><\/p>\n\n\n\n Then there is the issue of Consolidation. The NFFC writes,<\/p>\n\n\n\n Consolidation makes things even worse. Remember the one buyer our business owner had back at the beginning? There used to be many companies that farmers could sell their goods to, whether grain traders, meat markets, or dairy cooperatives. Having multiple buyers allowed farmers to negotiate their price. The last few decades have seen rampant consolidation, so that now many towns or regions have only one or two buyers, if any. In that case, the buyer can set the price, and the farmer has two options: take it or leave it.<\/p>\n\n\n\n As a result, the prices farmers receive for most commodity crops and livestock have been below the cost of production almost every year since 1981. Milk prices have been below the cost of production since 1993. Since 2008, the average prices farmers received for commodities on the open market have hovered around 37 percent of their cost of production.[13]<\/a><\/p>\n<\/blockquote>\n\n\n\n\n\n\n\n \u201cRigged Parity\u201d<\/strong><\/p>\n\n\n\n As already mentioned, Parity is attached to a period of time in which the farmer was doing quite well and, in addition to that time period, it is an objective calculation of cost of production and prices fetched for the product itself. Also already mentioned, however, is the systematic dismantling of floor pricing in the years after the \u201cparity years.\u201d<\/p>\n\n\n\n Beginning in the late 1950s and early 1960s, the USDA began changing (or \u201crigging\u201d) the game, supplementing the parity standard with weaker and more unequal time periods other than 1910-1914 such as the years 1957-1959 (where farmers averaged only 83% of parity) and 2011 (where farmers averaged only 41% percent of parity). Thus, the USDA was able to claim that farmers were receiving 100% of parity when the reality was anything but. With these decisions, the USDA put the corporate buyers of farm products at a major advantage over farmers.[14]<\/a><\/p>\n\n\n\n The Difference Between Parity And Subsidies<\/strong><\/p>\n\n\n\n After the Federal government began dismantling floor prices and farmers\u2019 revenues began tanking, it was obvious that farmers needed assistance if they were going to be able to continue to produce crops and attempt to make up for their lost income. Instead of returning to a system of floor prices and supply management, however, a system of subsidies and crop insurance was created. As NFFC states,<\/p>\n\n\n\n Today\u2019s farm safety net consists of subsidies and crop insurance, which compensate the farmer for losses due to low prices, weather, or other factors. But if a floor price is like a minimum wage, subsidies and insurance are more like food stamps: a critical lifeline, but not enough to replace basic economic justice.<\/p>\n\n\n\n To compare the two systems: In the parity years of 1942-1952, the price floor was set close to the cost of production, and farmers made a living wage. In the decades since, with subsidies and a lowered or eliminated price floor, net farm income (including all subsidies) has been much lower, sometimes just half of what it was in the parity years. In 2016, Iowa\u2019s net farm income was only 33 percent of the 1949-1952 average.<\/p>\n\n\n\n But here\u2019s the kicker: while a floor price set the fair market value that an agribusiness buyer had to pay the farmer, subsidies come from taxpayers and crop insurance premiums are paid by farmers. Agribusiness companies, on the other hand, get to buy farm goods at the lowest possible price they can find. Subsidies subsidize agribusiness, allowing meatpacking companies to buy below-cost grain to feed into factory farms and food manufacturers to buy cheap raw material to turn into processed food, while farmers barely scrape by.[1<\/a>5<\/a>]<\/a><\/p>\n<\/blockquote>\n\n\n\n\n\n\n\n But the solution is not as simple as removing subsidies. This would leave a large portion of farmers with no income at all. Subsidies are not the policy that will provide a living wage for the farmer or enable a fair and sustainable method of farming but they are better than nothing. Simply removing subsidies would immediately turn into a catastrophe.<\/p>\n\n\n\n The Need For Parity<\/strong><\/p>\n\n\n\n Part of the reason Parity is needed for farmers is the fact that the \u201cfree market\u201d and market in general has historically failed farmers and agriculture as a whole. There are many reasons for this. As Brad Wilson writes,<\/p>\n\n\n\n These markets are characterized by price inelasticity.\u00a0\u00a0They \u201clack price responsiveness\u201d \u201con both the supply and demand side for aggregate agriculture.\u201d These terms mean that supply and demand don\u2019t balance out, with farmer supply going down and\/or consumer demand going up. (See also Harwood Schaffer\u2019s writing on this topic here at Disparity to Parity.)<\/p>\n\n\n\n These reasons are related to the unique characteristics of production agriculture. Unlike concentrated industries like farm implement and automobile manufacturers, farmers have very tiny market shares, and they cannot manage their inventories to have any impact on the prices they receive. Farmers also make planting decisions far ahead of when they sell their crops. For example, they can get better deals on input purchases bought well ahead of time, such as in the fall, for spring planting. Harvest comes the following fall, and, for storable crops, much of it might not be sold until the following spring, a year and a half after the purchase of specific inputs for specific crops. So farmers can\u2019t viably change their behavior much in response to market conditions.<\/p>\n\n\n\n Additionally, new land isn\u2019t created and dismantled like the creation and dismantling of factories. It\u2019s a given, and a farmer\u2019s assets and asset costs (i.e. taxes & insurance) are relatively stable. Here again, farmers\u2019 acreages (tied closely to supply levels) are not changed much in relation to changing market prices, and market prices don\u2019t much self-correct.<\/p>\n\n\n\n Similar factors occur on the demand side. Consumers\u2019 stomachs and appetites are only so big, and so people don\u2019t much change what they eat in response to farm price changes. Industry is similar. There is little effective response when farm market prices change. Self-correction of farm market prices does not effectively occur.<\/p>\n\n\n\n Free market failure was a problem for 60 years prior to the farm bill and the Great Depression. Though the Depression was a key to the creation of the parity farm programs, the programs were not created in forms that applied only to the conditions of the Depression. Instead, the programs addressed the chronic need for market management that continues today.<\/p>\n\n\n\n The primary result of the lack of price responsiveness is that farm market prices are chronically cheap, below full costs and well below parity standards. This means that, without adequate parity programs farmers, farming communities, farming states and the United States all lose money on sales across their boundaries and borders most of the time. Prices higher than parity, where price ceilings and reserve supplies are needed, are rare.[16]<\/a><\/p>\n<\/blockquote>\n\n\n\n\n\n\n\n Free Markets<\/strong><\/p>\n\n\n\n While none of this should be construed as a desire to implement some irrational communistic system of rationing and top-down government control over every aspect of the food supply, unrestrained capitalism is strangling the family farmer and placing Americans at the behest of international corporations who themselves will control every aspect of the food supply. As George Naylor writes in his article, \u201cParity: An Economic Foundation For An Agroecological System,\u201d<\/p>\n\n\n\n We farmers need to recognize that the promises of most farm economists and journalists have been based on an ideology, not the science of economics. This ideology glorifies \u201cfree markets\u201d and promises freedom and liberty, as manifested in the notorious 1996 farm bill referred to as \u201cFreedom to Farm.\u201d What this really means is unrestrained freedom and billion-dollar profits for multinational corporations. By insisting on basing policy on this ideology, farm economists and journalists intentionally obscure the logical economic analysis of the inevitable disastrous outcomes of free markets: low incomes for family farmers, the hollowing out of rural communities, pollution of water and air, moving livestock production out of the hands of family farmers, the monopolization of food and farm input industries, and bleak futures for kids who would love to grow up to be farmers.<\/p>\n\n\n\n Any farmer you ask will have stories recounting investments gone wrong and dreams destroyed by disastrous unforeseen market crashes. My neighbor used to point to his beautiful silo and say, \u201cThere\u2019s my monument to stupidity.\u201d Over the last 45 years, I can\u2019t count how many times I have cleaned out my corn and soybean bins in August getting ready for the next harvest, only to sell these bushels at the lowest price of the year, and knowing prices would be even worse at harvest. Another year of rolling the dice, my livelihood depends on the judgment of speculators and global grain processors at the casino called the Chicago Board of Trade. Is this any way to run an agricultural system?<\/p>\n\n\n\n Everything is the farmer\u2019s fault. As an example, here is some advice farmers have gotten from an Iowa State University Extension farm management economist, quoted in a Farm News article: \u201cFor any given year, there is no magic day, week, month, or even price known until it has occurred. Most years, those spring highs happen somewhere between mid-May and mid-July. Unfortunately, most producers miss these futures price rallies because they fail to establish reasonable time or futures price targets and lack discipline in marketing their crops.\u201d (Farm News, Fort Dodge, Iowa, June 12, 2020, page 4A). In this article, the economist doesn\u2019t suggest any \u201creasonable\u201d time or futures price targets, but does mention that we can expect a record US corn crop of 16 billion bushels. If you, as a farmer, think that 30 cents above today\u2019s corn price is reasonable (which is still way below cost of production), but by mid-July the market goes up only 25 cents instead, you can blame yourself for lacking \u201cdiscipline\u201d (and you can also blame yourself for cleaning out those bins in August \u2013 for an even lower price). Hope there\u2019s a crop disaster somewhere else in the world! Wait! The Nightly News shows government sanctioned burning of the Amazon rainforest to increase Brazil\u2019s production of corn and soybeans. Ugh!<\/p>\n\n\n\n Some non-farmers ask why farmers raise the same crops year after year, often corn and soybeans, instead of something else. The answer is, \u201cWhat crop could that possibly be?\u201d Perishable crops are not an option for most farmers. Storable crops are the only practical choice, and they cover over 240 million acres in the US; fruits and vegetables only cover about 12 million acres. Any agricultural crop that doesn\u2019t have a special premium for its direct human consumption or milling quality ends up as animal feed or as biofuel feedstock. Feed grains and oilseeds are valued simply by their content of protein, carbohydrates and oil \u2013 the champions of which are corn and soybeans. That\u2019s why, despite disastrous prices, farmers are expected to increase production in 2020 with 97 million acres of corn and 93.5 acres of soybeans (Farm News, Ibid.)<\/p>\n\n\n\n Media reports often sound the alarm to the environmental damage of today\u2019s agriculture \u2013 soil erosion, water pollution, air pollution, loss of biodiversity \u2013 the list goes on. They say farmers, enticed by \u201csubsidies\u201d and crop insurance to raise as many bushels on as many acres as possible, make irresponsible choices. But let\u2019s be clear: farmers don\u2019t really have another choice. Like any enterprise in a free market economy, the only \u201cchoices\u201d are to make more and make it cheaper \u2013 raising more crops for less and less money, with the environment paying the price.<\/p>\n\n\n\n Our \u201cfree market system\u201d inevitably leads to overproduction on a global scale. After all, every farmer around the world in this globalized system is in a contest to increase production in order to increase income. Consequently, supply overshoots demand, resulting in low commodity prices that can\u2019t keep up with inflation, and ever-shrinking farm income. Lower farm income results in some farmers throwing in the towel or being foreclosed on. That means the remaining farmers who bravely hang in there will be farming more land and trying to increase yield. There you have it: ever larger farms using more corporate-sourced technology to increase yields, which leads to more overproduction. Is this freedom?[17]<\/a><\/p>\n<\/blockquote>\n\n\n\n\n\n\n\n Prices At Retail<\/strong><\/p>\n\n\n\n One question that is never asked by mainstream media outlets, however, is this: \u201cIf prices for agricultural products are so low, why aren\u2019t prices low in the supermarket?\u201d After all, wouldn\u2019t the buyers benefit from drastically low prices?<\/p>\n\n\n\n The truth is that the price of raw agricultural materials when they leave the farm doesn\u2019t really have much bearing on the retail price. This is because the \u201cconsumer\u201d who benefits from the low prices aren\u2019t consumers as many people would understand them to be, i.e. customers in the supermarket. Instead, the \u201cconsumers\u201d are large food processing corporations and marketing firms. These entities reap windfall profits when prices are low for farmers. The prices at retail, however, are not generally affected, at least not much.<\/p>\n\n\n\n As Naylor writes,<\/p>\n\n\n\n Besides, nearly 50 percent of corn and over 95 percent of soybean meal is fed to livestock (cattle, hogs, poultry, and dairy cows), almost exclusively owned or contracted for by giant meat processors and their vertically integrated Concentrated Animal Feeding Operations (often referred to as CAFOs, or factory farms). \u201cFarm animals,\u201d as we know them, are generally owned by corporations and are crowded together in giant feedlots or CAFOs. This is yet another reason farmers have few choices in what they produce. With livestock raised this way, family farmers are shut out and it is no longer (financially or contractually) an option for them to use soil-conserving and regenerating perennial hay and pasture, along with small grains for feed and bedding. When livestock were an integral element of the farm, the farmer could wisely choose to use different parts of the farm in different ways and make crop rotations the norm \u2013 rotations that saved soil, sequestered carbon, and could produce nitrogen (in the form of animal waste) for the next corn crop. These rotations also diminished the plagues of weeds and pests that result from the endless repetition of corn and soybeans \u2013 sometimes referred to as monocropping.[18]<\/a><\/p>\n<\/blockquote>\n\n\n\n\n\n\n\n Ever-Normal Granary and Supply Chain Management<\/strong><\/p>\n\n\n\n Parity is not a policy strictly designed to respond to Great Depression style crises, but as consistent agricultural policy. Nevertheless, during the time of the Great Depression, a food security reserve program was established called the Ever-Normal Granary (ENG). With this program, farmers could receive a nine-month non-recourse loan at 90 percent of the parity price for each storable commodity. If the farmer was unable to sell the product and repay the loan with interest, the government would place the product in the ENG, and the farmer would keep the loan. As a result of this policy, no farmer would accept less than the loan rate and the market would thus stay above that level.<\/p>\n\n\n\n It is important to note the importance of non-recourse loans for farm loans. Recourse loans would require farmers sell off other assets (land, equipment, etc.) if they could not pay back the loan. Non-recourse loans only require they sell the product. In other words, neither the farmer nor the government loses in a worst case scenario \u2013 the farmer is ensured a buyer and the government receives the product as collateral which it can either sell or store as a reserve for emergencies. This helped give farmers economic stability.<\/p>\n\n\n\n The ENG was essential because simply restricting production in order to raise prices is a dangerous game that could lead to food shortages. Restriction also doesn\u2019t go very far toward helping the farmer in terms of stability. Farmers would still have to guess how high or low prices might be and speculators would continue to gamble with the farmers\u2019 income.<\/p>\n\n\n\n The price floor was also protected from cheap imports by Section 22, whereby the Secretary of Agriculture could limit imports if the price support mechanism was imperiled.[19]<\/a>\u00a0Likewise, Tariffs are an incredible method of ensuring that foreign imports do not threaten the price floor.<\/p>\n\n\n\n Parity Programs<\/strong><\/p>\n\n\n\n More times than not, parity programs are needed to protect farmers against extremely low prices. However, Parity also establishes maximum standards for occasional and rare instances where prices are much higher than parity. The program thus exists to prevent skyrocketing prices as well. In other words, to prevent pricing extremes.<\/p>\n\n\n\n Thus, there are four general aspects to parity programs. 1.) Minimum Price Floors 2.) Supply Reduction through Supply Management through purchasing and storing of goods to balance supply and demand 3.) Maximum Price Ceilings 4.) Supply Expansion through release of stored reserve supplies to address price spikes due to shortages or actual shortages. Brad Wilson writes,<\/p>\n\n\n\n Market order programs for fruits and vegetables make up a second kind of parity farm program. These programs achieved parity farm prices for a long list of fruit and vegetable products during the parity years (1942-1952). These programs \u201capproached the problem of producers\u2019 prices indirectly, in that they didn\u2019t have direct price floors, but did manage the \u2018quantity, quality, and rate of shipment to market,\u201d and achieved prices of 100% of parity or more for a lot of fruits and vegetables..\u201d Even today, according to USDA, parity standards are used in 45 fruit and vegetable market order programs, but not for the purpose of achieving actual \u201cparity\u201d (or \u201cliving wage\u201d) price levels.\u00a0 That is, they look at parity or percentages of parity (quite low for about everything in recent years), but don\u2019t have a goal of achieving anything close to parity (as seen in the results). Like the direct price floor programs (where price floors were lowered from 1953-1995), price standards were also lowered in the fruit and vegetable programs.<\/p>\n\n\n\n The original parity programs also included eight livestock products, starting with wool, in 1938. Of these hogs, chickens, turkeys, and eggs were ended by 1951, and butterfat in 1971. Milk, wool and mohair were continued into the 1990s, with milk price floor programs ending in 2014.<\/p>\n\n\n\n Trade components are also often considered to be important parts of making parity programs work. Most important are provisions to prevent dumping into the United States, importing farm products below costs or below parity levels which would hinder parity programs. Dumping was addressed through tariffs and trade agreements, such as an international wheat agreement. Trade rules have been especially important in the sugar program, where a number of countries have been allowed to export sugar to the United States, but based upon minimum price levels established by farm programs.[20]<\/a><\/p>\n<\/blockquote>\n\n\n\n\n\n\n\n But Won\u2019t Parity Increase Food Costs?<\/strong><\/p>\n\n\n\n The answer to this question is somewhat more complicated. Some estimates suggest that food prices would rise up to about 15%. Others suggest the prices would end up being somewhere between current costs and organic costs. This is quite concerning considering inflation and the fact that food costs are already rising.<\/p> However, what these analysts forget to mention is that, as mentioned above, consumers are currently paying for their food twice; once at the market and again in food subsidies. They are paying twice because of the refusal of the \u201cmarket\u201d to ensure a living wage for farmers and because Wall Street is driving food prices up for the consumer but driving down prices well below parity for farmers.<\/p> That being said, parity pricing essentially eliminates the ability of Wall Street to manipulate and drive up the cost of food. During the period of 1942 and 1952, the commodity futures market in the United States essentially shut down due to parity pricing.<\/p> For instance, if there is a floor beyond which food prices cannot fall and a ceiling beyond which they cannot rise, the ability to gamble on the rise and fall of those prices is greatly diminished. In addition, a crackdown on commodity futures speculation would serve to eliminate any rise in prices. Thus, consumers would be paying about the same as they are now at the marketplace but farmers would be making a living wage. The living wage for farmers would then reduce the necessity of corporate farming and the reliance on Big Ag for agricultural products and bare subsistence level existence. It would also contribute to fewer GMOs and cleaner, local food.<\/p> There does, however, remain the question of a possible temporary price shock during the transition from subsidies to parity in the short period of time in which living wages are paid but while the last vestiges of commodity futures speculation continues. This price shock could be easily mitigated by a crackdown on those markets, banning and eliminating their ability to manipulate the prices of food. It would also be possible to temporarily continue a subsidy program redirected toward food companies that would be phased out as parity pricing comes into effect and as food speculation disappears.<\/p> The Economic Need For Parity<\/strong><\/p>\n\n\n\n Parity pricing and agricultural policy in general effects more than farmers and even more than consumers as a whole. Income which flows into the various areas of the real economy \u2013 wages, salaries, corporate and small business income, rental properties, and virtually everything else \u2013 are generally balanced in stable ratios to each other. This, of course, makes sense and as technology changes and progress takes place these ratios change.<\/p> One simple example is that, to make a pencil, one needs wood, metal, and lead. The pencil requires the lumber industry which requires saws, trucks, and lumber yards which require metal saw blades and other machinery. All the workers require wages and each business exists for profit. All are connected.<\/p> Agriculture, however, is the base of the economy since it meets a basic need of humans to survive. People need to eat. Farmers produce food. Farmers need tools, tractors, trucks, labor, etc. The income that comes in to farms finds itself then being redistributed throughout the rest of the economy via both farm-related and nonfarm-related jobs.<\/p> But how can the rest of the economy operate when the base of that economy does not have enough money to survive and thus does not have enough money to pass on to the rest of the economy? Quite simply, it can\u2019t. This is because the ratio of payment and income still exist whether farmers get paid a living wage or not. If farmers are earning a living wage, however, that money will find itself working its way throughout the rest of the real economy.<\/p> As Kyle McCarthy wrote<\/a>, \u201cWhen your food dollar goes to family farms it gets redistributed to labor, equipment and various other expenses and investments. When your dollar goes to Wall Street, it ends up in a Swiss bank account or up someone\u2019s nose.\u201d<\/p> Parity would not only benefit farmers and create more small farms, it would also increase the number of non-farm jobs and serve to revitalize many rural economies and small towns.<\/p> The Necessary Implementation of Parity In The 21st Century<\/strong><\/p>\n\n\n\n Back in the 1980s, when many might remember the Farm Aid concerts becoming a yearly occurrence, the American farming crisis was beginning to make itself known at a public level. The Savings and Loan disaster was also another blunt reminder of the fact that corporations and banks were\u00a0killing off<\/a>\u00a0the small family farmer and replacing him with corporate farms.<\/p> In 2017, small farmers, beyond niche markets (organic, co-ops, etc.) are virtually non-existent while corporate behemoths control the majority of America\u2019s food supply. As major international corporations continue to dominate American agriculture, eliminate the diversity of nature, introduce environmentally destructive and toxic genetically modified crops as well as douse every plant possible with as much herbicide and pesticide as possible, the situation seems daunting and hopeless. We are now at the threshold of a national famine if farming practices are not changed.<\/p> But the situation is not hopeless and our current dilemma can be reversed by implementing parity pricing, a ban on GMO food, and a concerted effort to break up the major monopolies and corporate giants that are currently controlling the American food supply. The answers to our agricultural problem already exist and have been proven effective in the past. It\u2019s time to bring back parity.<\/p>\n\n\n\n [1]<\/a>\u00a0Keller, Andrew; Kassel, Kathleen. \u201cThe number of U.S. farms continues slow decline.\u201d Economic Research Service, USDA. 3\/12\/2025. https:\/\/www.ers.usda.gov\/data-products\/chart-gallery\/chart-detail?chartId=58268<\/p>\n\n\n\n [2]<\/a>\u00a0Keller, Andrew; Kassel, Kathleen. \u201cThe number of U.S. farms continues slow decline.\u201d Economic Research Service, USDA. 3\/12\/2025. https:\/\/www.ers.usda.gov\/data-products\/chart-gallery\/chart-detail?chartId=58268<\/p>\n\n\n\n [3]<\/a>\u00a0Vidal, John. \u201cFood Speculation: \u2018People die from hunger while banks make a killing on food.\u201d The Guardian. January 22, 2011. https:\/\/www.theguardian.com\/global-development\/2011\/jan\/23\/food-speculation-banks-hunger-poverty<\/p>\n\n\n\n [4]<\/a>\u00a0\u201cFood Speculation.\u201d GlobalJusticeUK. https:\/\/www.globaljustice.org.uk\/food-speculation\/<\/p>\n\n\n\n [5]<\/a>\u00a0\u201cFair Prices For Farmers.\u201d National Family Farm Council.\u00a0\u00a0https:\/\/nffc.net\/what-we-do\/fair-prices-for-farmers\/<\/p>\n\n\n\n [6]<\/a>\u00a0Graddy-Lovelace, Garrett. \u201cFair Prices & Farm Justice For Racial Equity & Food System Resilience.\u201d Disparity to Parity. https:\/\/disparitytoparity.org\/from-disparity-to-parity\/<\/p>\n\n\n\n [7]<\/a>\u00a0Wilson, Brad. \u201cWhat Is Parity, When, and Why?\u201d Disparity To Parity. https:\/\/disparitytoparity.org\/what-is-parity-when-and-why\/<\/p>\n\n\n\n [8]<\/a>\u00a0Wilson, Brad. \u201cWhat Is Parity, When, and Why?\u201d Disparity To Parity. https:\/\/disparitytoparity.org\/what-is-parity-when-and-why\/<\/p>\n\n\n\n [9]<\/a>\u00a0Wilson, Brad. \u201cWhat Is Parity, When, and Why?\u201d Disparity To Parity. https:\/\/disparitytoparity.org\/what-is-parity-when-and-why\/<\/p>\n\n\n\n [10]<\/a>\u00a0\u201cFair Prices For Farmers.\u201d National Family Farm Council.\u00a0\u00a0https:\/\/nffc.net\/what-we-do\/fair-prices-for-farmers\/<\/p>\n\n\n\n [11]<\/a>\u00a0\u201cFair Prices For Farmers.\u201d National Family Farm Council.\u00a0\u00a0https:\/\/nffc.net\/what-we-do\/fair-prices-for-farmers\/<\/p>\n\n\n\n [12]<\/a>\u00a0\u201cFair Prices For Farmers.\u201d National Family Farm Council.\u00a0\u00a0https:\/\/nffc.net\/what-we-do\/fair-prices-for-farmers\/<\/p>\n\n\n\n [13]<\/a>\u00a0\u201cFair Prices For Farmers.\u201d National Family Farm Council.\u00a0\u00a0https:\/\/nffc.net\/what-we-do\/fair-prices-for-farmers\/<\/p>\n\n\n\n [14]<\/a>\u00a0Wilson, Brad. \u201cWhat Is Parity, When, and Why?\u201d Disparity To Parity. https:\/\/disparitytoparity.org\/what-is-parity-when-and-why\/<\/p>\n\n\n\n [15]<\/a>\u00a0Fair Prices For Farmers.\u201d National Family Farm Council.\u00a0\u00a0https:\/\/nffc.net\/what-we-do\/fair-prices-for-farmers\/<\/p>\n\n\n\n [16]<\/a>\u00a0Wilson, Brad. \u201cWhat Is Parity, When, and Why?\u201d Disparity To Parity. https:\/\/disparitytoparity.org\/what-is-parity-when-and-why\/<\/p>\n\n\n\n [17]<\/a>\u00a0Naylor, George. \u201cParity: An Economic Foundation For An Agroecological System.\u201d https:\/\/disparitytoparity.org\/parity-an-economic-foundation-for-an-agroecological-system\/<\/p>\n\n\n\n [18]<\/a>\u00a0Naylor, George. \u201cParity: An Economic Foundation For An Agroecological System.\u201d https:\/\/disparitytoparity.org\/parity-an-economic-foundation-for-an-agroecological-system\/<\/p>\n\n\n\n\n
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