Under The Agricultural Policies Of Country R, Farmers Can Sell Any GMAT Critical Reasoning

Question: Under the agricultural policies of Country R, farmers can sell any grain not sold on the open market to a grain board at guaranteed prices. It seems inevitable that, in order to curb the resultant escalating overproduction, the grain board will in just a few years have to impose quotas on grain production, limiting farmers to a certain flat percentage of the grain acreage they cultivated previously.

Suppose an individual farmer in Country R wishes to minimize the impact on profits of the grain quota whose eventual imposition is being predicted. If the farmer could do any of the following and wants to select the most effective course of action, which should the farmer do now?

1. Select in advance currently less profitable grain fields and retire them if the quota takes effect.
2. Seek long-term contracts to sell grain at a fixed price.
3. Replace obsolete tractors with more efficient new ones.
4. Put marginal land under cultivation and grow grain on it.
5. Agree with other farmers on voluntary cutbacks in grain production.

“Under the agricultural policies of Country R, farmers can sell any” - is a GMAT question about critical thinking. A candidate may choose to either find evidence that would undermine the argument or present an argument that is illogical in order to respond to the question. The GMAT critical reasoning gauges a candidate's aptitude for logic and analysis. Candidates must identify the argument's advantages and disadvantages as well as its logical flaws for this topic. Out of the 36 GMAT verbal questions, 10–13 critical reasoning questions are found.

Answer: (D)
Explanation: Farmers are allowed to sell any grain that is not sold on the open market to a grain board for guaranteed prices under the agricultural policies of Country R. It appears inevitable that the grain board will soon be forced to impose production quotas, limiting farmers to a specific flat percentage of the grain acres they previously farmed, in order to control the resulting escalating overproduction.

Let's examine each option in turn to determine which would best assist the farmer in reducing the effect of the grain quota, whose eventual imposition is being predicted, on profits.

Option – A : Incorrect
If no other option worked, choosing less profitable land now would make sense. The subject land is presently less profitable but not unprofitable, so there would still be some immediate loss of profits. Therefore this option is to be ruled out.

Option – B : Incorrect
The farmer's profitability from growing grains would presumably be guaranteed by long-term fixed-price contracts. But if the total cost of agricultural inputs for grain cultivation were to rise with no contracts providing protection against such a case, that won’t happen. The fact that such long-term contracts may significantly reduce the farmer's ability to profit from future increases in market demand for grain. However, it may be the most significant factor. Therefore this option is to be ruled out.

Option – C : Incorrect
We are not given any data about this. We cannot estimate how the costs of replacing old machinery and major investments in new machinery might affect the revenue from growing grains. Therefore this option is to be ruled out.

Option – D : Correct
The farmer would benefit from increasing his or her grain-production acre even if some of the new land is not ideal for growing grains. This is because any quotas issued in a few years will be based on the farmer's current grain-production acreage. Therefore this option is the correct answer.

Option – E : Incorrect
Agreeing on voluntary reductions with other farmers may help prevent or at least postpone the grain board's introduction of quotas. Even if it is enough to prevent mandatory quotas, it might still have a similar impact. Additionally, there is a chance that some farmers might break any agreement if they see an advantage in doing so. Therefore this option is to be ruled out.

From the explanations given above, it is clear that the fourth option is the right answer as it fits the necessary requirements posted in the question.

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