Farm Justice and Parity Pricing

Authors: Kassandra Leuthart*, Indiana University, Angela Babb, Indiana University , Daniel Knudsen, Indiana University
Topics: Applied Geography
Keywords: parity price, farm-gate price, farmers’ markets, farm justice
Session Type: Paper
Day: 4/7/2019
Start / End Time: 8:00 AM / 9:40 AM
Room: Taylor, Marriott, Mezzanine Level
Presentation File: No File Uploaded


Parity price was introduced in the Agricultural Adjustment Act of 1933, as a concept that “intended to convey to a unit of commodity, such as a bushel of wheat, the same purchasing power that it had in the 1910-14 base period” (Teigen, 1987). By selling goods at parity price, farmers would be able to live within middle-class standards and ensure fair payments for their products. Though parity price has long been absent in policy making, it continues to be calculated by the USDA. This paper explores the extent to which farm-gate prices and parity prices differ by commodity as well as alternative markets for farm products that may yield higher-than-farm-gate prices. As large corporate-owned farms begin to overshadow their smaller competitors, current farm-gate prices have plummeted. This leaves farmers in economic situations that mirror those occurring before the Agricultural Adjustment Act of 1933. In past decades, many farmers have called for a return to parity price. In this research I collect and contrast monetary data found at two market sources for farmers (farm-gate/wholesale markets and farmers’ markets), as well as compare the prices achieved by farmers in both of these markets to the parity price. I find that farmers can often sell their produce above parity price at farmers’ markets. My results demonstrate that incentives exist for small business farmers to break away from both commodity crops and traditional wholesalers and instead turn to their communities.

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