Monday 2 June 2014

Blog 11 Parity in agriculture - questions and answers

Blog 11 May 24, 2014  
Some questions and answers about PARITY in order to start the conversations

1)      Will PARITY cause food price inflation? No. Comment: There is little relation between farm price and the food price.  Food prices have risen while farm prices plummeted. Consumers got the best food price bargains when farmers had PARITY (that is a fact and that is history).
2)      Aren't farmers better off than they were before? No. Comment: Farmers are worse off than ever before. Farm debt has reached an all time high.  Farm bankruptcy is now the worst it has ever been in history.
3)      Is it possible to have PARITY program based on abundance? Yes. Comment: With PARITY farmers are assigned allotments and acreage goals. These are set and based on domestic needs. Export needs and food reserves for emergencies and disasters each farm family unit applies for their allotment each year.
4)      Can exports or alternative uses for grains solve our problems? No. Comment: Exports have reached an all time high and farm prices have reached an all time low. Exports make grain merchants rich, not farmers.  
5)      Will PARITY mean more bureaucracy watching farmer’s every move? No. Comment: It is the subsidy programs that are bureaucratic and costly.  Former PARITY programs were run by elected farm committees, they were free of bureaucracy cost, the taxpayers very little, and did achieve PARITY for farmers. Farmers need a voice for what affects their lives.
6)      Will PARITY help big farmers at the expense of small farmers? No. Comment: Small farmers lose out when prices are low. This argument has been used only to divide farmers.
7)      Will PARITY price our Canadian grain out of the world market? No. Comment: It is stupid to price grain exports at less than full value and less than cost of production. World prices are set in North America therefore the international market would be forced to adjust and tie in to PARITY pricing. This way other countries and other farmers would benefit from the inevitable positive ripple effects of PARITY.
8)      Will PARITY inflate land prices? No. Comment: Land prices tripled while farm prices dropped.  When farmers had PARITY land did not skyrocket.  Since so many farmers have gone bankrupt, and there is more available land than buyers, land values have gone down. PARITY would restore land values.
9)      What about government involvement; won’t farmers have to accept a lot of restrictions on how they operate? No. Comment: By signing up a farmer is guaranteed: 1) minimum price, 2) his/her share of the market, 3) restrictions will involve allotment, base price, permitted acreage and appraised yield. 
10)   Isn't inefficiency and poor management the reason for so many farmers to leave agriculture? No. Comment: Poor farm prices cost us lost farmers.  Good prices stabilize the farm population.
11)   How is PARITY figured? By a statistical means of hitching farm prices to farm costs.  If farm costs rise the PARITY figure will rise accordingly. If input costs go down, so will the PARITY figure. That is fair ie a base period is selected when the prices and costs were in a balanced relationship (1910-1914) was used in the 1942-52 price formulations.  Each month Agriculture Canada statistically determine the prices received index for the prices paid index (it would include all farm costs including interest and taxes).  The PARITY ratio the overall average of farm prices is determined by dividing prices received figure by the prices paid figure over a 5 year average figure. The formula is written – we just need to use it.
12)   What would be the effect of cheap food import invasion of our domestic PARITY prices? Comments: PARITY legislation would protect our domestic prices, food  imports would be subject to tariffs at the border which would parallel Canada’s PARITY price.

In conclusion

Food self-sufficiency must be the goal for our survival. Importing approximately 90% of our food when we could provide most of our requirement shows bad management of our resources.  PARITY is a way to correct this situation which if we do nothing, will effect a disastrous future for our generations to come. 

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