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1 Would the US economy be better off without government intervention in agriculture Who would benefit Who would lose 2 Are large price movements inevitable in agricultural markets What other mechanisms might be used to limit such movements 3 Farmers can eliminate the uncertainties of fluctuating crop prices by selling their crops in futures marketsagreeing to a fixed price for crops to be delivered in the future Who gains or loses from this practice The US economy would be not better off without government intervention in agriculture However it would not be worse off either The US economy as a whole would not be impacted with or without government intervention in agriculture According to the chapter it seems that farm prices depend on the economy and not the other way around Farm prices are dependent either on Congress setting a price floor through subsidies like set asides and government stockpiles or to market conditions when there is no government condition Because of technological advances in agriculture there are currently less US farmers producing more agricultural products When government intervention is reduced as it was in the late 1980s and early 1990s US agricultural prices behaved closer to the market mechanism However the market mechanism is prone to corrections and outside influences Because there are less people in the US directly dependent on the health of the agricultural sector of the US economy less people would be directly affected with ups and downs of a lassaiz-faire agricultural market The agricultural market took a downturn at around 1997 when the economies of Asian nations were in trouble When these nations were in trouble they were less willing and able to purchase US agricultural products They reduced the demand for these products while the supply was high therefore the prices of these products were lower Hence farmers incomes were lower and they were facing trouble Luckily for the US farmers this happened during an election year and
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