Tech-boosted farmers face a bleak harvest: government-capped prices squeeze profits, discouraging efficient practices and leaving livelihoods bare. Foreign investors stay frosty, while a stable market wilts from price controls. Technological advancement isn't enough; economic reforms hold the key.
The most likely outcome of a government imposing price ceilings on farm products after receiving technology for increased productivity is:
d) the farmers receiving the technology will still be unable to make a living.
Here's why:
Price ceilings: limit the maximum price at which farmers can sell their products. With increased productivity, farmers would naturally want to sell at a higher price to recoup their investment in the technology and earn a better income. A price ceiling hinders this ability and potentially disincentivizes them from using the technology effectively.
Discouraged farmers: If farmers cannot earn a decent income due to the price ceiling, they might resort to alternative less productive methods or even abandon agriculture altogether. This defeats the purpose of providing the technology initially.
Foreign investors: a price ceiling creates an unpredictable and potentially unstable market environment for agricultural products. This instability is likely to discourage foreign investors who seek reliable return on investments.
Market-oriented economy: price ceilings interfere with the natural market forces of supply and demand. This creates distortions and hampers the development of a stable market-oriented economic climate.
Technological disconnect: the statement itself acknowledges the technological difference between the country and others. Imposing price controls without addressing the broader economic context is unlikely to solve the disconnect.
Therefore, option d is the most likely consequence of the scenario described.