Small crop, big profit, still supported

In the picture

1. 1Small high-value plot: a lot of income from little land
2. 2Large low-value plot: much land for a modest income
3. 3Public subsidy: government money paid to farmers
4. 4Distant cheaper producer: lower costs that push prices down

Examples

• A small vineyard earns more per hectare than a wheat field, yet may receive aid to match imported wine prices.
• Sugar beet farms in some regions earn well but rely on payments against cheaper cane sugar from abroad.

Quiz: Small crop, big profit, still supported (Age 16)

1. 1

   A small farm grows a crop that earns a very high income per hectare. Why might it still need public subsidies?

   • Because a crop with high income per hectare always costs more to grow than any other crop
   • Because small farms are legally forbidden from selling without government money
   • Because high income per hectare does not guarantee it can match the low prices of cheaper producers abroad
2. 2

   What is the main reason a farm might need a subsidy to keep selling its crop at a competitive price?

   • Local customers refuse to buy crops grown on small plots
   • Farms abroad grow the same crop at lower costs, which pushes prices down
   • The farm’s plot is too large to manage efficiently
3. 3

   What is the downside of using subsidies to keep farms alive against cheaper foreign producers?

   • They cost taxpayers money
   • They make the crop less profitable per hectare
   • They force foreign producers to raise their costs

The answers, each with its explanation, are in the app. This quiz is free there while the lesson is in the free week.