The people's voice. [volume] (Helena, Mont.) 1939-1969, 1943-03-12
LATEST FACTS
ABOUT PARITY

soon debate again the proposal of Sen
ator Thomas of Oklahoma, Rep. Pace
(Ga.) and Chairman Fulmer of the
house agricultural committee o
change the parity formula by includ-
ing both the cost of hired labor and
a theoretical value of the labor per-
formed by farmers and unpaid family
labor. Because of the agitation by
some farm organizations for raising
all farm prices by this method, here
is the latest information on farm
prices. For all of 1912 prices aver
aged 1890 of parity, but rose rapidly
in the last half of the year to 1872
during December
OF major commodities being mar
keted in thath month, IS were at par
ity or above, and IL were below: Bur-
ley tobacco lis; oranges 147; wool
40; lambs 1877; beef cattle 1876; tur-
keys 1873; rice 1923; cottenseed 1928;
veal calves 1875; hogs 11S; chickens
ZIG; fluid milk Ill; butterfat 100;
peanuts for oil 1O9; soybeans 107;
grapefruit LOG; cotton 1902; potatoes
100 dry edible beans SO; eggs 81;
apples SO; flaxseed 90; peanuts for
nuts SO; wheat 81; corn 81; sweet
potatoes 81; oats II; barley IS; hay
So; and rye so.
Parity expresses a buying power of
the farm dollar equal to what pre-
vailed during 1904. Thus, prices
received by farmers during December
average 1872 of the prices received
in the 1904 period, while prices
paid, including interest and taxes,
were only 1859 of the pre-World War
l base. The first percentage divided
by the second gives the 1850 of pre-
war parity mentioned above.
In figuring parity, only prices re-
ceived from cash marketings and
prices paid for cash purchases are
used. Earnings made by farmers
away from their own farms, and even
cash benefits from federal programs,
are therefore not included in the cal
culations. Similarly, no value is as
signed to the family living produced
by the farm or furnished by the farm
home. Thus it can be seen that in
figuring buying power it is altogether
out of place to include value for
labor performed for which there is not
an actual cash payment.
In 1888, interest, taxes and hired
labor costs were not included in the
parity formula because each were be-
low the average level of other prices
paid then by farmers. Their inclu-
sion would have lowered parity. Late
in the 1930's interest and tax rates
rose, but farm labor remained dirt
cheap. Since farm prices were still
far below parity, there was justifiable
pressure against lowering parity, so
farm wages were left out in 1888
when interest and taxes were placed
IN the formula. Only in the last two
years have farm wage rates been high |
enough to have raised the parity in
lex. Before 1941, including them
would have meant that farmers would |
nave received many million dollars
ess than they did receive through |
loans based on parity.
The change suggested by the farm
bloc" would increase the parity price
Of every farm commodity about 1870, |
farmers about So billions in
L943, but costing consumers more
han 81 billions. Such across the |
BOARD" price raises would interfere
lot only with preventing initiation bur |
llso would interfere with, getting |
armers to shift to more needed crops
md would upset feed ratios and pre-
rent increases in livestock. AS4
1t is also true that if the parity |
ormula is opened for revision, num-
)er of other changes may be made to |
)ring it up to date which would lower
t more than the inclusion of all Ia
,or would increase it. Adding only |
he cost of hired labor would increase
he price level about so, since only
bout $50 of all labor on farms is
wage labor.
Parity price does not represent cost
ng formula, nor even parity of in
ONE. Parity prices are far higher
han the cost of production of large
armers, and even above the average
ost of production of some commodi-
les. Thus, increasing all prices
lat amount would not help much in
rops which have a high labor cost,
nd not be needed in commodities
aving less than average labor COSTS
Farmers should remember that 1912
ct farm income was the highest on
ecord and that it went largely to
ne million larger farmers. Cash in
ONE went up faster than farm wages
r other costs. Wages still represent
My one-eighth of all cash expenses,
Though for larger farmers the pro-
ortion is higher. But two-thirds of
Il the income goes to the top million
lrms, which also hire most of the
Lbor. At least half of our farmers
reduce so little that prices would
ave to increase three or four times
efore they would have a decent liv-
lg. Greater volume of production
nd not prices is the real answer for
ve-sixths of our farmers. That is
lie Farmers Union program, fair
rices, and a guarantee that farmers
ill get them, but give them the
cans to produce more of what the