ADJUSTING PRICE SUPPORTS: COMPARISON OF ALTERNATIVE METHODS

Price supports have been at the heart of agricultural policy for many years. In this year's debate over a farm bill the level of price supports and the method of adjusting price supports were central issues. What standard should be used for setting equitable supports? ''Parity" was the standard of the past. "Cost of Production" is the favorite this year. What will be the next standard? In this paper five methods of adjusting price supports are discussed. After a brief description of each, they are compared using several economic and pragmatic criteria