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Because agriculture is so important to a nation’s well-being, governments have always been concerned with it. For example, the United States and Canada have long produced surpluses that complicate their economies. Surpluses tend to lower prices to farmers and seriously endanger the agriculture industry. Governments have instituted systems of price supports to maintain a fair price when surpluses cause prices to drop. The system in the United States is a good example. A government program supports the prices paid to farmers for grains, and other agricultural products.
Support prices are based on parity, which is the ratio between the prices farmers receive for their crops and the prices they must pay for things they need. The government selected the period from 1910 to 1914 as a time when farm prices were in a fair ratio with farming costs. This is the base period now used to determine parity prices.
The idea is to assure farmers that what they get for a bush
A. they throw the country into great disorder
B. they entail more expenditure on the part of the government
C. they usually involve direct governmental support price
D. the government has to set up special pricing systems