What is Agricultural Parity?
A fair price structure, known as parity, ensures a balance in both the abundant supply of raw materials and the personal and corporate income needed to purchase them.
Parity means balance.
A more technical definition would be:
Agricultural Parity is the accounting for the labor effort involved in the production and distribution wealth to our inhabitants without the need for long-term capital debt provided the price at the first point of sale of the raw materials used to create our wealth is in the proper balance and ratio to all of the labor and capital costs in the rest of the economy.
In farming, parity asks whether the money a farmer gets for crops can still buy about the same amount of goods and services as before.
Think of it like this:
A farmer sells corn, wheat, soybeans, or another crop. The farmer then uses that money to buy seed, fuel, machinery, repairs, food, clothing, and other needs.
If the goods the farmer must buy rise in costs, but crop prices do not rise at the same rate, the farmer can buy less even if the farm produces more.
Parity is a way to compare those two sides: what farmer receives for what he sells and what he must pay for what he buys without either party being shortchanged.
Agricultural Parity means wealth, not money.
It simply means giving value to money in the form of goods and commodities—units of wealth—not in giving value to these essential things in terms of money. For example, an Ag Parity mindset would see $5 as worth a gallon of milk, not that a gallon of milk is worth $5.
If two people engage in a series of 10 transactions and one has a 10% advantage over the other each time, the favored party will have all the money or property and the other will be bankrupt after the 10th transaction.
This simple illustration, multiplied many million fold, explains what has transpired under the disparity price system which has been practiced so long in the United States.
It explains why one-third of our population live in a state bordering on poverty and why the great middle class is on the point of being wiped out.
Why does Ag Parity matter?
Why does the U.S. economy respond so positively to "parity" raw material prices? Simply stated, it's because the "Trade Turn" for every raw material dollar of income is maximized. The Annual Economic Cycle of production, processing, distribution, and consumption of the nation's goods and services operates at full efficiency on an earned-income basis.
In fact, due to the trade turn in the U.S. economy on domestically produced raw materials, every $1 billion created by farm production generates $13 billion in national income.
Conclusion
When Ag Parity policy has been steadfastly applied, it has led to:
- widespread prosperity among the U.S. population;
- broad based economic expansion, job growth, and monetary stability;
- consumption of the nation's annual production of raw materials, manufactured goods, and services without debt accumulation, and
- balanced international trade.
These policies will help the whole economy, from the firms that produce primary-supply products to their ultimate consumers. With a fair price structure ensuring both an abundant supply of raw materials and the personal and corporate income needed to purchase them, the economy will provide growth and prosperity for all.