Intro to Ag Policy
What is the title of the piece of legislation that details how the federal government is supporting agriculture and is passed about every 5 years?
Farm Bill
Most ag commodities are sold in what type of market?
Perfectly competitive
Inelastic
(know how this encourages the government to intervene in ag markets)
Who are the people who might work for an interest group that discuss possible policies with members of Congress and their staff?
Lobbyist
What term is used if a market (for a variety of possible reasons) does not produce prices that will support farmers?
Market failure
price takers
(know why this promotes more government intervention in ag markets)
What is the name of the type of analytics that combines economics and statistics to predict the effect of policy changes in a market?
Econometrics
What is the term for when individuals or groups provide funds for congressional re-elections for more access to a member of Congress?
Pay to play
What is the term for an event that occurs in a market that is economically devastating and is not predictable?
Black Swan event
Also know how it usually impacts ag policy
Where does the demand for most agricultural commodities come from?
Because ag producers are price takers, they will produce (in the short run) up to the point where their marginal cost equals
price
Who can write a piece of legislation and who can file a bill?
Anyone
Elected official
What key part of US agriculture has driven up the supply of commodities due to being able to produce more with less?
If a government subsidy drives the price above equilibrium, what will happen in the market?
Excess production or surplus
What is the term for ag policy lowering the prices for food?
Cheap food policy
What are the three points of the Iron Triangle Model?
Congress, Administration (President), Lobbyists
What is the term for a government price support in a market when the price decreases below an acceptable level?
Subsidy
What are the three economic outcomes that we discussed that can be predicted by using econometrics?
Direction of price movements
Substitution effects
Possible farm level and national income effects of the tax
What are 5 ways the government can support ag prices?
What is the term given to an additional bill that is added to a larger bill with the hopes that it will be passed as part of the larger bill?
Rider