Calculate the program payments to a typical corn farmer under the current Farm Bill at various farm prices.

Name: ID#: Problem Set #3 (100 Points) AGEC 429 Due Date: Umrsday, April 9, 2020 There are two parts to this problem set. In Part I, you are asked to calculate the program payments to a typical corn farmer under the current Farm Bill at various farm prices. In Part 11, you are asked to write a 500 word (minimum) paper responding to ve explanations requested by the Secretary of Agriculture on your calculations in Part I. First, do the problems and then write the paper according to the instructions given on the page following the problems. 1. Problems (50 points) Assume you work as a com policy analyst in the Economic Research Service of the U.S. Department of Agriculture. Your Branch Chief comes to you with an assignment from the Secretary of Agriculture's office. They want you to calculate the benet of the corn program under the provisions of the 2018 Farm Bill (which are identical to the 2014 Farm Bill in these problems) for a typical corn farmer who chooses the Price Loss Coverage Program for various scenarios. Using the information for a \"typical\" corn farmer provided below which assumes \"normal weather\Scenario 2: Drought in the Cornbelt Now assume there is a drought in the Combelt that drastically reduces the actual com yield for the "typical" corn farmer from 225bu/acre to only 75 bu/acre. Your Branch Chief says that the Secretary now wants you to calculate how the drought will change government payments to this corn farmer if everything was the same as in the first problem above EXCEPT for the lower actual com yield. Put your new calculations in the table below. Payments Price Loss Market Total Market price LDP/MLG Coverage Revenue Revenue $5.24/bu $3.33/bu $1.94/bu $1.27/bu $0.00/bu Your Work:Scenario 3: Drought in the Cornbelt with Lower Loan Rate After you submit your new payment calculations given the drought in the previous scenario, your Branch Chief says that the Secretary wants to know if this "typical" com farmer would be benefited in this drought situation if he set the loan rate lower at $ 1.50 and how government payments would change. Make your new calculations assuming everything is the same as in the previous scenario (with the drought) EXCEPT that the loan rate is now $1.50/bushel. Put your new calculations in the table below. Payments Price Loss Market Total Market price LDP/MLG Coverage Revenue Revenue $5.24/bu $3.33/bu $1.94/bu $1.27/bu $0.00/bu Your work:Scenario 4: Drought in the Cornbelt with Updated Base Acreage and Updated Program Yield After giving the Secretary your new calculations with the lower loan rate in the previous scenario, the Secretary announces that all corn farmers must "update" their base corn acreage and that an updated farm program yield will be used to calculate payments to farmers. Assuming that everything is the same as in scenario #2 (with the drought- reduced yield of 75 bushels/acre and the original loan rate of $1.95/bushel), using an updated BASE acreage for this "typical" com farmer of 800 acres and a new PROGRAM corn yield of 250 bushels/acre, calculate the payments to and total revenue of this "typical" corn farmer. Put your new calculations in the table below. Payments Price Loss Market Total Market price LDP/MLG Coverage Revenue Revenue $5.24/bu $3.33/bu $1.94/bu $1.27/bu $0.00/bu Your work:Scenario 5: Drought in the Cornbelt and the ARC Program Now the Secretary wants you to gure out if this \"typical\" farmer might actually have fared better if he/she had participated in the ARC program rather than the commodity programs (PLC and LDPIMLG) g1 ven the drolght conditions in the country. First, calculate the payments that the farmer would have received and her/his total revenue under the ARC program at each of the same 5 market price levels. Continue to assume that drought has reduced the actual corn yield to 75 bushels/acre and the same base acreage and program yield as in scenario #2. Put your new calculations in the table below. Here is some additional information you will need for your ARC calculations: Olympic average price $5.00 Olympic average yield 225 bufacre Benchmark Guaranteed Actual ARC Revenue Revenue Revenue Payment Total Market Total Farm er acre er acre oer acre er acre Pa ent Revenue Revenue