Is parity pricing enough? A critical analysis of parity pricing and the case for additional strategies

Producers in the U.S., particularly small-scale farmers and specialty crop growers, are unable to maintain their livelihoods with farming alone due to low farm gate prices arising from unequal market power and policy support. Advocates have recommended revitalizing parity pricing, which historically set price floors based on 1910–1914 farm purchasing power. This paper evaluates whether parity existed in 1910–1914, showing farm and non-farm incomes were not significantly different. It then compares parity prices to farm-gate, transfer terminal, and retail prices for twelve specialty crops, finding farm gate prices are significantly lower than parity and do not necessarily translate to lower consumer prices or consistently align with production costs. The paper also shows the temporal correspondence between the end of parity pricing and declines in farm income. It concludes that parity pricing alone will not resolve systemic inequities in U.S. specialty crop production and pricing, and discusses broader policy interventions.

Mecca Howe, Laxmi Prasanna R. Palde, Kassandra R. Leuthart, Nicholas J. Monroe, Oliver M. Allen, Kamila Czebotar, Kathleen M. Lich, Angela M. Babb, Daniel C. Knudsen