Which policy aims to prevent oversupply of agricultural products?

• A. Lowering taxes on consumers
• B. Set-aside schemes or quotas
• C. Removing price controls
• D. Encouraging overproduction

Answer: (B)

Preventing oversupply in agriculture is about managing how much is actually produced. When production runs ahead of demand, prices fall and farmer incomes become unstable, plus crops can go to waste. Set-aside schemes pay farmers to leave land idle, reducing the total amount that can be produced. Quotas set a ceiling on how much of a particular product can be produced, again limiting supply. Together these are direct tools to keep supply in line with demand and maintain more stable prices.

Lowering taxes on consumers would tend to boost demand, which doesn’t address excess supply. Removing price controls could let prices fall if supply is high, but that doesn’t inherently prevent an oversupply situation and can worsen price instability. Encouraging overproduction adds to supply, making oversupply more likely.