Argument Topic
The following appeared in a letter to the editor of a Batavia newspaper.
“The department of agriculture in Batavia reports that the number of dairy farms throughout the country is now 25 percent greater than it was 10 years ago. During this same time period, however, the price of milk at the local Excello Food Market has increased from $1.50 to over $3.00 per gallon. To prevent farmers from continuing to receive excessive profits on an apparently increased supply of milk, the Batavia government should begin to regulate retail milk prices. Such regulation is necessary to ensure fair prices for consumers.”
Write a response in which you discuss what questions would need to be answered in order to decide whether the recommendation is likely to have the predicted result. Be sure to explain how the answers to these questions would help to evaluate the recommendation.
Basing on the assumption that farmers are receiving excessive profits on increased supply of milk, the author recommends Batavia government to regulate retail milk prices. Admittedly, it is the responsibility of the government to ensure the stability of the market, however, several questions must be addressed before we could determine whether the regulation will be necessary and effective for lowering milk price.
A critical assumption of the argument is that the farmers are receiving unreasonable profits, which is unwarranted before several factors have been considered. A foremost question is that whether the number of dairy farms could accurately reflect the supply of milk, for there is no necessary relationship between them. It is possible that the average milk supply of each single farm has dropped and therefore the total supply would not increase. It is also possible that a great proportion of milk produced has been processed to other dairy products or has been exported. The milk supply on market will decrease in these cases.
Granted that the supply of milk did increase during the past decade, we may well ask that whether the prices of milk are increasing all over the country. The author provides only one sample—the Excello market to illustrate the variation of milk price, but many factors may render the situation at the market unrepresentative of the national trends. Perhaps the supply of milk in the region where the market locates was relatively lower than national average, or the milk production is much more costly here due to some geographic factors. Any one of these possibilities would make the higher milk price in Excello totally a normal phenomenon.
Even if the prices of milk were also doubled throughout the country, just as happened in Excello, the author overlooks a myriad of economic factors that would result in the increase. Consider, for example, the cost of milk production and transportation might have increased as well during the same period, or perhaps the supply of milk could not meet the demand in spite of an increased supply. The author also needs to inform us how much did the price of milk actually increase after adjustment for inflation. Without accounting for these factors, the author could not convince us that farmers have received excessive profits and that the regulation is indeed necessary.
Finally, even if the author can successfully address all the questions foregoing, it is unjustifiable to conclude that the regulation of retail milk prices could ensure an adequate supply of milk and therefore, a fair price. It is likely that the regulation would reduce the profits of farmers; they might be less interested in producing milk, or will produce less milk as a response. If so, adopting the author’s recommendation will actually lead to inadequate supply of milk rather than the optimistic result expected by the author.
Undoubtedly, the author’s intention of keeping the market stable and ensuring fair price of milk is justified. But to convince us that the regulation is necessary to ensure a reasonable milk price and adequate supply, the author must substantiate the assumption that the profits received by farmers are undeserved and that the regulation is sufficient for ensuring lower price. Hastily carrying out such regulation would actually pose negative effects on the supply of milk.