An Assessment of Parity as a Tool for Formulating and Evaluating Agricultural Policy

The essence of U.S. farm policy has been to provide a certain level of economic security to the farm sector through various government programs. Until 1973, these programs were linked to parity, a measure of the purchasing power of farm commodities today in relation to their purchasing power during the base period of 1910 to 1914. Although most programs are now linked to costs of production, policymakers and others still regard parity as a barometer of the economic health of the agricultural sector.