Prior to 2001,if the market price of cotton was below the government's loan rate,
A)The cotton farmer received a loan deficiency payment and relinquished the crop to the CCC.
B)The cotton farmer defaulted on the loan but kept the crop;the CCC kept the money.
C)The cotton farmer,in effect,bought the crop from the CCC.
D)The cotton farmer gave the crop to the CCC and was forced to exit the industry.

Question

Quizplus · Accepted Answer

If the market price of cotton was below the government's loan rate, the cotton farmer received a loan deficiency payment from the Commodity Credit Corporation (CCC) and relinquished the crop to the CCC. This was done to support the price of cotton and to prevent overproduction of cotton, which could lead to a surplus and a drop in prices.

Prior to 2001,if the Market Price of Cotton Was Below