Current farm policy is institutionalized penalization of consumers. It increases food prices for middle- and low-income families and costs the taxpayer billions of dollars a year.
Which of the following statements, if true, would provide support for the author’s claims above?
I. Farm subsidies amount to roughly $20 billion a year in federal payouts and $12 billion more in higher food prices.
II. According to a study by the Department of Agriculture, each $1 of benefits provided to farmers for ethanol production costs consumers and taxpayers $4.
III. The average full-time farmers have an average net worth of over $300,000.
(A) I only
(B) II only
(C) III only
(D) I and II only
(E) I, II, and III
I think D is the ans..however I don’t feel strong as to how statement 1 supports the claim but I’m making an educated guess based on numbers and use of the word “billions” in st1.
Open for discussion…
B
How do we know what the correct answer is?
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I think its D because:
I. Farm subsidies amount to roughly $20 billion a year in federal payouts and $12 billion more in higher food prices.
This cleary points out that farm subsidies leads to higher food prices.
$20 in federal payouts to farmers means other taxpayers pay more. Therefore costs taxpayers money?
II. According to a study by the Department of Agriculture, each $1 of benefits provided to farmers for ethanol production costs consumers and taxpayers $4.
This directly points out that if you give farmers benefits it costs consumers( food prices maybe go up) & taxpayers pay more.
III. The average full-time farmers have an average net worth of over $300,000.
This has nothing to do with the question since it just lets us know the farmers income.
Thanks Pranay
D
D
d
d
D
D is the answer…. which talks about the Higher prices and taxpayers costs
D
b
D
its B,
D is wrong because statement 1 use the figures which can be anything in percentage for ex. 20billion in federal payouts which can be very high if the total payout is say 100 billion but on the other hand it can be very small if the total bailout package is of say 1000 billion
B
I THINK D IS THE BEST OPTION.
As regards the view of Kapil above, i would say there there is no mention of any proportion or percentages regarding the subsidies & even if there was any mention, the taxpayers would nevertheless bear the costs to the extent of ‘billions of dollars per year’
I agree with Kapil and others.
IMO B…
Let us review in another angle……
I — logic is acceptable
II — It is connected to production of ” Ethanol” & we don’t have any supporting data on how it effects on middle- and low-income families and costs the taxpayer billions of dollars a year. — IRREVALENT
III – IRREVALENT.
HENCE I GO WITH “A”
B is the logically correct answer.
I. Farm subsidies amount to roughly $20 billion a year in federal payouts and $12 billion more in higher food prices.
The figures ” $20 Billion a year as a federal payouts and $12 billion higher in food prices” sound good. But does it logically connect the issue. what is the basis of comparison that this amounts are hugh or less. $12 billion higher in food may be very less, I am not sure according to the given data. so this is a dangling statement and good to leave it.
also the ratio $20 billion to $12 billion is not an issue.
II. According to a study by the Department of Agriculture, each $1 of benefits provided to farmers for ethanol production costs consumers and taxpayers $4.
this is a logical statement… if $20 billion is payout for farmer then $80 billion costs to consumers and taxpayers.
The given logic about B sounds accurate. However GMAT team can help in this.
I go with option “A” as statement “I” encompasses all subsidies to make a comparison, However other 02 options are limited in their implication to the whole context.
QUOTING PRANAY’S REASONING FOR OPTION D
“I. According to a study by the Department of Agriculture, each $1 of benefits provided to farmers for ethanol production costs consumers and taxpayers $4.
This directly points out that if you give farmers benefits it costs consumers( food prices maybe go up) & taxpayers pay more.”
Hi Pranay,
the argument doesn’t mention anything related to effect of ethanol production on subsidies/increase in taxes. I think we should neglect our own deduction.
Please throw some light.
IMO (B)
i) ambiguous, equivocal statement. Firstly, you can’t make any comparison with those figures. Secondly, we are told that the food prices increased due to current food policy but we dont know how much have they increased just by looking at the current figures. And dont know how logical is this… but subsidies are meant to lower the prices. Like oil subsidies in India.. if govt doesn’t provide these subsidies, the customer will end up paying 10-20 rupees more per litre of petrol… so i dont know how 20 bn $ subsidy will lead to an increase in food prices.
ii) Clear, simple and succinct.Supports the claim.
iii) Out of scope.
I will go with option B … we are not sure whether the subsidy given will affect the tzxpayers and consumers … it may affect or it may not .. so its better to leave the dangling statement … althought the subsidy amount will be paid by the taxpayers,we are not sure whether it is a huge amount to them or not … but B clearly points out the difference of 3$ is paid by taxpayers and consumers and hence the author’s conclusion
IMO D:
Current farm polices has two impacts
a)it increases food prices for middle- and low-income families
b)costs the taxpayer billions of dollars a year.
As (I) mentions “Farm subsidies amount to roughly $20 billion a year in federal payouts”—> this amount would be derived from the taxpayers(b)
and “$12 billion more in higher food prices.”–>as mentioned in (a).
(II)–>I dont think anyone disagrees on this.
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B