Supply and demand logic indicates that the consumers will be willing to buy goods at a larger quantity with lower prices than they would at a higher price. However, the assumption is usually violated when…
Download file to see previous pages...
As a result, the farmers will not be able to make a profit and will end up running in a danger of going out of business. The government, therefore, intervenes and attempts to raise the prices or try to affect the farmer revenue. A good example of this intervention is through subsidy or negative taxation. In these cases, the farmers receive extra payments from the government. An example is in the coffee industry. Alternative solutions include government involvement to buy the products in the open market causing an increase in demand until the commodity prices get to the desired level. Alternatively, the supply of the commodities are curtailed by quotas where only certain farmers are allowed to grow a certain crop, and there are limits on how many products can be produced i.e. sugar, coffee, tobacco. Price controls can be imposed to limit the maximum and minimum prices that can be charged for a certain product. However, it has serious consequences causing a decrease in production as it will not be profitable to produce as many products as they are demanded because of the low prices causing a shortage of the commodity.
Farmers generally face price fluctuation of coffee product prices. This is so because coffee products that are produced by one farmer are equivalent to a similar product of the same grade that is produced by another farmer. Farmers are, therefore, considered to be price takers as they can sell all their products at any market price but have no individual bargaining power for their products to raise their prices. Therefore, it is essential to ensure that there is stability in the global market prices of the agricultural products (Mohan 2007). Supply management programs, and agricultural policies in the past have helped in maintaining production around the demand to ensure that farmers do not produce an oversupply that can lead to prices collapse of their products. A number of strategies
...Download file to see next pagesRead More
History of Present Illness The patient, a lady aged 20 years, who according to her report had been well until 24 hours ago when she suffered an acute case of productive cough. She kept fit and has had good health prior to the cough, given her regular work outs at the gym.
Economics is the study of manufacture, distribution and the consumption of goods in a market structure. Economics is a social science that revolves around people’s life starting when they are born till when one dies. Economics has various agents’ that conduct the business in the market, some of these agents includes customers, suppliers, producers and the governments.
Factors like prices and market share have produced an overall imbalance between the supply and the demand of coffee and its trade as a commodity has been deeply affected threatening to produce more poverty on Least Developed Countries (LDCs) and developing countries alike.
The interviewed families came from USA, Middle East and the Caribbean. The heritage assessment tool helps in identifying and analyzing the underlying acts that impede or improve the health of a society. Health is determined by various factors
The researcher states that through a well-built expectation, the likelihood of sustaining relatively stable prices is high, owing to the fact that the information helps both the public and the private sector to plan on the productivity, while the population plans on the spending of their incomes and savings, based on the expected future conditions.
However, if there are enormous price fluctuations then government intervention is essential. This paper analyses how effective the intervention government through minimum/maximum prices and government subsidies can be to reduce the fluctuations in the price of
Although the U.K. is a major producer of Oil in Europe, it is currently a net importer of the commodity as noted by the U.S. Energy Information Administration (2013). A huge percentage of the oil that is imported into the U.K. comes from the Middle East, and more especially
To guarantee an excellent production of coffee, each stage has to be taken care keenly and with observations. The initial phase is the right selection seeds for planting. When it happens that the farmer selects bad seeds, it may
6 Pages(1500 words)Essay
GOT A TRICKY QUESTION? RECEIVE AN ANSWER FROM STUDENTS LIKE YOU!
Let us find you another Essay on topic What actions might be taken by governments to reduce or limit price fluctuations of your commodity (Coffee) for FREE!