Vincennes University

AGBS 434

Chapter 7

1)The most important long-run consequence of U.S. farm policies is the survival of family farms.

2. Target price (counter-cyclical) payments are directly tied to current production

3. Farm policy has been a failure because the number of farmers has fallen from roughly 7 million when the programs began to 2.1 million today.

4. Multifunctionality is a goal of U.S. farm programs

5. Direct payments support farmers’ income, but not the market price

6. The conservation reserve program (CRP) decreases land values because it takes away the farmer’s right to produce on it.

7. Only half of the farmers, or those who consider themselves to be farmers, get government payments.

8. Voluntary production control payments are based on producer loyalty for participation.

9. Farm prices and income would be more stable under free market conditions

10. Marketing loan payments (LDPs) are directly tied to current production.

11. The benefits of acreage allotments and marketing quotas are capitalized into land values or into the value of the transferable quota.

12. When returns fall, resources quickly move out of agriculture

13. Marketing loans support income.

14. Farming would be more efficient under free market conditions.

15. In the non recourse loan, the loan rate is the interest rate on the loan.

16. The most vulnerable farms are those having gross incomes of $100,000 to $250,000

17. The benefits of a transferable marketing quota are capitalized into the value of land

18. The non recourse loan is a guaranteed floor price

19. Payments under the marketing loan program are decoupled.

20. Eliminating the peanut program destroyed asset values

21. Farm policy tends to be bipartisan.