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On my honor, as an Aggie, I have neither given nor received unauthorized aid on this academic work.Signature: ___________________________________ Seat #: __________________Printed Name: ________________________________Agricultural Economics 429Fall 2018 Exam #31. ________2. ________3. ________4. ________5. ________Total ________1a. (4 pts.)Why would ethanol industry supporters endorse the Senate version of the 2018 Farm Bill over the House version on the issue of conservation?1b. (4 pts.) Compare the “Delaney Clause” and the Food Quality Protection Act of 1996. How are they similar and how are they different? 2a. (12 pts.)Define HACCP and explain why it is implemented. Discuss the trade-offs associated with food safety from an individual’s perspective. Finally, explain how HACCP is related to the Food Safety Modernization Act? 2b. (8 pts.)Explain in detail who bears the cost of COOL (imposed on beef) and why.3a. (6 points) What are the decisions a producer must make in reallocating their generic base? Explain why these decisions are so important to farmers. 3b. (4 points) The House version of the 2018 farm bill would eliminate farm safety net payments to base acres that haven’t been planted since 2009. At the same time, it allows the updating of farm program payment yields for farmers who had suffered drought and couldn’t update these yields in the 2014 Farm Bill. Explain why these changes couldn’t be done without the other. 3c. (6 pts.)In 2011, Texas had a loss ratio of 2.5.? Define what this number means.? How is this loss ratio of 2.5 a good thing for Texas farmers? Does this number imply that Texas farmers made money in 2011??Write the letter in the blank that corresponds to the correct answer._______ 4a. (3 pts.) The Senate version of the 2018 Farm Bill:Passed the Senate by 2 votesMakes Industrial Hemp eligible for crop insuranceEliminates the Conservation Stewardship ProgramAll of the aboveNone of the above_______ 4b. (3 pts.) From a farmer’s perspective, what is the potential downside to passing a one-year extension of the 2014 Farm Bill instead of passing the 2018 Farm Bill??Cotton would have to wait for another year to be a covered commodityWriting the 2019 bill under a new baselineNot getting to reselect between ACRE and PLCAll of the aboveNone of the Above_______ 4c. (3 pts.) The Delaney Clause:Sets a zero-tolerance level of cancer riskIs the current policy for cancer risk toleranceSets a “de minimus” level of cancer risk toleranceBoth A and BBoth A and C_______ 4d. (3 pts.) Which is true regarding market-imposed regulations and SNAP?Market-imposed regulations and SNAP are NOT relatedMarket-imposed regulations tend to increase all consumers choices SNAP participants are most economically affected by regulationsBoth A and BBoth B and C_______ 4e. (3 pts.) Commercial farmers would sayPayment limits are an economic issueThey have made business decisions based on current lawSafety net payments don’t affect land valuesAll of the AboveNone of the Above_______ 4f. (3 pts.) What is the primary legislation governing food safety?Federal Food and Beverage Act of 1936 (FBA)Federal Food, Drug, and Cosmetic Act of 1938 (FDCA)Federal Food Quality Protection Act of 1996 (FQPA)Federal Food Quality and Safety Act of 1921 (FQSA)None of the above_______ 4g. (3 pts.) Direct attributionLeads to capitalizationIs an economic issueEliminated the need for actively engaged provisionsAll of the AboveNone of the Above_______ 4h. (3 pts.) Non-Governmental regulations (such as no gestation crates and cage free eggs)A.Has different financial outcomes than governmental regulation B. Raise the marginal cost for producers C. Increase quantity suppliedD. Is a food safety issueE. None of the above_______ 4i. (3 pts.) Class differential pricing for milk:A. Raises the price of fluid milkB. Indirectly lowers the price of cheeseC. Increases marginal cost of producersD. Both A and BE. Both B and C_______ 4j. (3 pts.) Class II milk refers to milk that goes into?A. Milk PowderB. ButterC. Ice CreamD. CheeseE. All of the above_______ 4k. (3 pts.) Which of the following would be labeled under COOL (assuming it was still in place for beef and pork)?A bag of Peas and CarrotsHamHamburgerBaconChicken Nuggets_______ 4l. (3 pts.) Which of the following is true about U.S. conservation programs?EQIP funding has been stagnantCattlemen are targeted for the majority of EQIP fundingCSP was put in place to increase conservation on nonworking landsAll are trueAll are false_______ 4m. (3 pts.) Whether you think payment limits should be tightened primarily depends on:Your point of point of viewThe definition of a “large” farmThe “Scottie Pippen” ruleBoth A and CBoth B and C_______ 4n. (3 pts.) Subsidizing crop insurance Puts the tax payers’ skin in the gameEnsures that the loss ratio will be one in the long-runHelps reduce the need for ad hoc disaster paymentsBoth A and CBoth B and CPlace a T (for True) or F (for False) in the space provided based on your assessment of each statement below. (1 point each)5a. _______ SNAP income eligibility is 120% of the poverty level.5b._______In 2018, seed cotton became a covered commodity outside of the farm bill.5c._______Food programs currently make up the bulk of Farm Bill spending.5d._______About 1 in 4 American Adults are considered obese.5e._______The Food Safety Modernization Act was the first major comprehensive reform of food safety since the 1948 Food, Drug, and Cosmetic Act.5f. _______Long term land retirement programs have historically received the most conservation program spending but the EQIP program is the most popular.5g. _______ Regulation, no matter the form, acts to constrain quantity supplied.5h. _______ Differential pricing for milk is applied to the most elastic good.5i. _______ Most farmers select revenue coverage crop insurance.5j. _______ APH stands for actual production history.5k. _______ Farmers don’t have a deductible because crop insurance is subsidized.5l. _______ The SRA establishing the terms under which FCIC provides reinsurance and subsidies on Eligible Crop Insurance Contracts Sold by the Insurance.5m. _______ Seed cotton is the weighted average of cotton lint and cotton seed. 5n. _______ The new seed cotton program involves reallocating generic base to seed cotton base or a proportional reallocation of other planted commodities. ................
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