The agricultural scenario in country Almia has changed considerably over the las

Question

The agricultural scenario in country Almia has changed considerably over the last forty years. While the population employed in agriculture declined from 60 percent to just over 20 percent during this time, the total production of food crops more than doubled. Large farms became larger, while many small farmers who were unable to improve efficiency were driven out of the market. There was a substantial decline in the prices of most food crops during this period.

With mechanization and improved productivity, market analysts had in fact predicted a sharper fall in the prices of food crops. However, although prices did decline, they did not fall as much as anticipated. Which of the following, if true, would explain this outcome?

A. A pesticide-resistant fungal parasite that attacks only cotton plants has reduced cotton production in the last five years.

B. The government of Almia has successfully controlled the overall increase in price level.

C. The farm land used for the cultivation of food crops has increased by 10 percent in the last forty years.

D. Food crop exports increased at a faster rate than the increase in food crop production.

E. Fertilizer subsidies provided to farmers increased significantly in the last forty years.

Explanation / Answer

The primary reason the price did not decline as considerably as expected is beacuse the Government might have controlled the price of the food corp keeping in mind the interest of the small farmers, who are getting faded away. This might lead to unemployment of those poor farmers eventually or they will find hard to meet their ends.

Also the use of latest techniques to produce food corp might have an impact. After all the use of latest techniques also bear some costs and the producers also have to incur some bit of cost of production regarding the installation and cost of maintenance of those latest machines. These cost of installing and maintenence of machines is included in the price of the food corp for sale to customers in order to cover up their cost of production.

Cost of land is also the factor. Nowadays the cost of land is increasing day by day so the farmers or the producers who does not have the land of their own have to pay higher rent of the land used by them in producing food corp. So with the increasing in the price of the land the price of the food corp will also increase considerably as the producers will try cover their cost of production.

These are the primary reasons why the price of the food corp did not decline as considerably as it was anticipated.

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