Weaken : "Farmers in developing countries"

[niketdoshi123]

Farmers in developing countries claim that the United States government, through farm subsidies, is responsible for the artificially low global price of wheat. Because the U.S. government buys whatever wheat American farmers are unable to sell on the open market, American farmers have no incentive to modulate the size of their crops according to the needs of the global market. As a result, American farmers routinely produce more wheat than the global market can absorb and the global price of wheat is kept low. Without these subsidies, the farmers in developing economies claim, American farmers would produce only the amount of wheat that they could sell on the open market and the global price of wheat would rise.

Which of the following, if true, most weakens the claims of the farmers in developing countries regarding the price of wheat?

a)Wheat that is not processed for consumption is often used for certain industrial applications.

b)Non-governmental buyers of wheat and wheat products are able to predict how much wheat they will need several years in advance.

c)The United States government offers similar subsidies to soybean farmers, though the global price of soybeans is significantly higher than that of wheat.

d)Other countries, such as Canada and Russia, are likely to produce more wheat if the United States were to reduce its output.

e)The price of sorghum, a crop for which the United States government offers no subsidies, is lower than that of wheat.

[shankar.kumar]

IMO D.

[jnelson0612]

niket, what is your question here?

[niketdoshi123]

Premise 1: The U.s government buys the whatever wheat the American farmers are unable to sell in the open market.

Premise 2: American farmers produce more wheat than the market can absorb and global price is kept low.

Conclusion: Without these subsidies, the American farmers would reduce the production of wheat as per the market's need and thus the global price would rise.

d)Other countries, such as Canada and Russia, are likely to produce more wheat if the United States were to reduce its output.

Even if Canada and Russia produce more wheat , how can you conclude that this will keep the global price of wheat low. As there is no information whether Canada and Russia get farm subsidies from their respective governments.

[jnelson0612]

Premise 1: The U.s government buys the whatever wheat the American farmers are unable to sell in the open market.

Premise 2: American farmers produce more wheat than the market can absorb and global price is kept low.

Conclusion: Without these subsidies, the American farmers would reduce the production of wheat as per the market's need and thus the global price would rise.

d)Other countries, such as Canada and Russia, are likely to produce more wheat if the United States were to reduce its output.

Even if Canada and Russia produce more wheat , how can you conclude that this will keep the global price of wheat low. As there is no information whether Canada and Russia get farm subsidies from their respective governments.

Okay! Look at premise #2. The foreign farmers are saying that global prices are kept low because American farmers produce more wheat than the market can absorb.

SO, if American farmers stop producing excess wheat, will that raise wheat prices, which is what the foreign farmers want? Not if Canada and Russian farmers step in and start producing much more wheat! Then there will still be more wheat than the global wheat market can absorb and prices will be kept low. It doesn't matter where the wheat comes from; if there is too much wheat, that extra wheat will depress prices.

As for the farm subsidies, that just provides background as to why American farmers produce a lot of wheat. It doesn't matter to this argument as to whether Canadian and Russian farmers would get subsidies or not. Their reasons for producing more wheat don't matter; what matters is what is stated in the answer: if American farmers stop producing excess wheat, Canadian and Russian farmers will pick up the slack and start producing the excess wheat. Thus, the wheat prices will not change.

[rohan.nanda]

Hi Jamie,

I just came across this question in the test and I selected A. D makes sense no doubt, but if you look at A, one could conclude that the wheat supply would remain the same even if the subsidies stopped because after Wheat farmers have sold the amount of wheat that is in demand in the open market, the excess left can be used in industrial applications. Which means that they will not change the production rate of wheat, which also weakens the argument.

If I'm looking at it from a wrong point of view, please correct me. Thanks !

[tim]

i think what you may be overlooking here is that it does not matter whether wheat is eaten or used for industrial applications. the demand from industry would likely be the same regardless of US output, so the ultimate destination of the wheat is irrelevant in determining global supply and demand..

[dhlee922]

it seems that the farmers are making 2 claims, first, American farmers would produce only the amount of wheat that they could sell on the open market

and the 2nd claim is the global price of wheat would rise.

because the question part says "Which of the following, if true, most weakens the claims of the farmers in developing countries regarding the price of wheat?"

i initially was stuck between C and D and eventually chose C since that was more related to price. i understand why D is correct, but could you immediately cross off C and E because the price of two non-wheat commodities are irrelevant to wheat prices?

also, since there seem to be 2 claims and the fact that the question mentioned price, that is part of the reason i chose C. So how do you know that the answer should address the first claim about producing the amount of wheat and not the 2nd claim about price, especially when the question mentions price?

lastly, a separate forum mentioned that choice E would strengthen the farmer's claim, but did not elaborate. if that is true that it strengthens, could someone explain how it strengthens?

thank you

[jlucero]

I don't think you can throw away C/E because they offer information about another market. C slightly strengthens the argument and E slightly weakens it. You can eliminate them both because even though they have subsidies, we don't know if the rest of their situations are similar to the wheat market. The key thing is that wheat prices are low because of the subsidies AND there is a surplus of wheat. Without knowing about there being a surplus of soybeans or sorghums, we can't see if those analogies are useful.

[beatthe800]

How come "D" is an answer?
D says: Other countries, such as Canada and Russia, are likely to produce more wheat if the United States were to reduce its output.

We do not know how much the current production stats of Canada and Russia. It might be possible, United States is currently producing 80 pc of global market and combined Canada and Russia is 2 pc. Even if Canada and Russia would doubled the wheat production (4 pc) wouldn't suffice the criteria and need.